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Speaker 1: Welcome to How the Money. I'm Joel and I am Matt,

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Speaker 1: and today we're answering your listener questions.

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Speaker 2: You know what, buddy, it is a Monday. Had a

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Speaker 2: money episode, which means we are answering listener questions. We've

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Speaker 2: got some awesome ones to get to today, including one

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Speaker 2: from a listener. She's wondering whether or not's FSA accounts.

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Speaker 2: First of all, what our FSA accounts? We'll talk about that,

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Speaker 2: but we want to a lot of people are wondering

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Speaker 2: right now. We're gonna talk about whether or not they're

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Speaker 2: worth a hassle. Basically, we're gonna talk about what you

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Speaker 2: can do if you don't qualify for a roth Ira

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Speaker 2: and another listener, she's trying to figure out how to

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Speaker 2: mentally make the shift from being a saver to maybe

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Speaker 2: a little bit more of a spender. Oh, first rings,

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Speaker 2: We've got those plus others during this episode today. Man,

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Speaker 2: but first man, So my in loss. They've been looking

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Speaker 2: at houses recently. They're considering making a move, which in

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Speaker 2: turn means I think I've been looking at houses. Let's

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Speaker 2: be honest. Everyone likes to just stop on Zillow peruse

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Speaker 2: see what's see what's out there.

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Speaker 1: Once you become a person of a certain age, that's

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Speaker 1: like your your past time, that's your Instead of scrolling TikTok,

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Speaker 1: we scrolled Zillow.

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Speaker 2: Even given the current mortgage rate environment. Well, I guess

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Speaker 2: with us being investors, I feel like there's a part

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Speaker 2: of that that there's a sirens call to be like

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Speaker 2: is there a deal or is there.

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Speaker 1: I would like to keep my fingers on the pulse

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Speaker 1: right so I know what's going on and so I

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Speaker 1: can see one because what we do here need to

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Speaker 1: be familiar, well the advice we get from a community standpoint.

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Speaker 1: I want to know what's out there for me personally.

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Speaker 1: I think that's why I look at it. I totally

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Speaker 1: know what's going on around me for sure, keep my

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Speaker 1: head on a swivel when it comes to the real

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Speaker 1: estate moment.

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Speaker 2: But what I wanted to ask is I saw a

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Speaker 2: listing where there was a pool that was virtually staged.

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Speaker 2: So you've heard of furniture. Of course, you've seen listings

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Speaker 2: where there's furniture that's virtually staged. What are your thoughts

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Speaker 2: when you virtually staged a pool? And in tiny letters

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Speaker 2: in tiny type below it said pool is virtually staged thoughts.

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Speaker 2: All right, so I've got a couple thoughts on homestaging. One,

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Speaker 2: all the stats show host staging in general.

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Speaker 1: Yeah, okay, then when you stage at home, it sells

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Speaker 1: for a lot more money. And I do think you

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Speaker 1: are probably cheap, not frugal if you take pictures with

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Speaker 1: if you've already moved out and you take pictures of

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Speaker 1: the rooms being empty, it seems like it's a high

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Speaker 1: price to pay to get that home stage. But the

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Speaker 1: numbers don't lie, and they reveal that it's probably gonna

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Speaker 1: be worth it. You're going to have you're going to

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Speaker 1: sell your home more quickly, You're gonna more interested buyers

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Speaker 1: if you have a stage.

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Speaker 2: Well, it makes sense because people have a hard time

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Speaker 2: visualizing what it would look, right, like, what are you

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Speaker 2: supposed to do with this space? I don't know. But

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Speaker 2: then when you see it all staged professionally exactly, Oh,

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Speaker 2: I could totally see myself hanging.

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Speaker 1: Out there, even if you end up using that room differently,

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Speaker 1: provides you at least like a frame of reference. So

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Speaker 1: when it comes to virtual staging, I think it's a

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Speaker 1: far cheaper option, and at least in the pictures it

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Speaker 1: gives people something to grab onto, so that is.

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Speaker 2: I mean, it accomplishes the same thing. Obviously if you're

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Speaker 2: going in person, it's not going to be staged, right right,

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Speaker 2: because it's all done virtually.

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Speaker 1: But the pool part of the pool that takes it

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Speaker 1: to a whole.

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Speaker 2: Are you really like why not? It's dishonest, that's why.

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Speaker 1: Oh I thought you don't mean that they're just putting

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Speaker 1: in chairs and stuff. They're putting in a fake pool.

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Speaker 2: Yes, oh okay, but no, no, no, they're not staging the

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Speaker 2: deck so that like with a patio furniture, they're literally

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Speaker 2: putting in a fake pool. Okay, that's weird. Yeah, no,

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Speaker 2: that's lying. I think, yes.

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Speaker 1: Exactly, I thought you meant they were like literally just

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Speaker 1: putting deck chairs.

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Speaker 2: Around the No, like there's a fake pool where it's

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Speaker 2: just like, this is what it could look like if

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Speaker 2: you decided to put a pool in, which seems completely

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Speaker 2: dishonestally messed up. I am not okay, good, I'm glad

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Speaker 2: you glad you agree, because nobody, like with furniture, no

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Speaker 2: one's thinking where's the furniture, Like, where's that cozy king

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Speaker 2: sized bed that I thought I purchased? No one is

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Speaker 2: actually thinking that as opposed to a pool that's a permanent.

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Speaker 1: Fixture, and that's part of the reason you go to

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Speaker 1: visit the house in the first place. Yeah, exactly, that's

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Speaker 1: thirty completely.

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Speaker 2: Yeah yeah, why not virtually stage Here's what an entirely

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Speaker 2: new addition to the home would look like, were you

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Speaker 2: to add onto the house, right, that's just yeah, not

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Speaker 2: cool or an adu if you built it, Yeah, all

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Speaker 2: that kind of stuff. Let's go ahead, stage it at

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Speaker 2: the beach. This is what it would look like if

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Speaker 2: your home was at the beach instead of in that

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Speaker 2: crappy neighborhood.

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Speaker 1: If our home was like a two thousand square feet

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Speaker 1: bigger this is what it would look like.

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Speaker 2: Yeah, no, that's exactly. It's really awkward, not cool. I

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Speaker 2: don't think that's going to catch on. It was a

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Speaker 2: singular instance.

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Speaker 1: Again, if you've moved all of your your pool lounge

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Speaker 1: stuff to your new house, to your new pool, virtual stage,

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Speaker 1: virtual staging.

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Speaker 2: Makes for it. Yeah yeah, because nobody expect that's still

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Speaker 2: going to be there when you move it. That's right,

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Speaker 2: that's I think that's kind of how you determine whether

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Speaker 2: or not you're being fru or cheap. Or dishonest or

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Speaker 2: crook or whatever. All right, that's weird.

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Speaker 1: Never even heard of this happening before, but glad to

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Speaker 1: know that it exists. I'll be on the lookout, all right, Matt.

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Speaker 2: Let's move on.

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Speaker 1: Let's mention the beer we're having on this episode. This

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Speaker 1: one's a blood orange double Wit by ponder Rosa Brewing.

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Speaker 1: Big thanks to our friend Bob from New Mexico for

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Speaker 1: tossing this beer our way.

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Speaker 2: Looking forward to enjoying this one, and we'll share our

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Speaker 2: thoughts on what we think of it at the end

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Speaker 2: of the episode, for sure.

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Speaker 1: But let's get on to listener questions. If you have

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Speaker 1: a money question, you can send yours our way how

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Speaker 1: to money dot com. Slash ask is the place where

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Speaker 1: you can go for simple instructions to record a voice

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Speaker 1: memo and email it to us. That's basically all it takes.

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Speaker 1: But the first listener question of today, Matt, this one

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Speaker 1: comes from someone who's after our own heart. Not only

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Speaker 1: do they drink beer, but they want to invest in it.

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Speaker 3: Hey guys, this is br from Mississippi. I bought some

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Speaker 3: beer stock a few months back. Am I wrath Ara,

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Speaker 3: And it's curious when I sell it what my tax

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Speaker 3: implications will be if I'm keeping the money on that

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Speaker 3: account and buying some more stock with it.

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Speaker 2: Thanks all right, b R. First of all, I love

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Speaker 2: that you bought beer stock. I mean, of course, I'm

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Speaker 2: gonna make it clear we are not fans of single

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Speaker 2: stock investing for the vast majority of folks, because the

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Speaker 2: truth is, most folks don't have the time. Even if

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Speaker 2: you did have the time, do you have the expertise,

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Speaker 2: do you have the knowledge in order to take that

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Speaker 2: route and to do it successfully where you're investing in

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Speaker 2: an underlying company, not buying because it's something that you

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Speaker 2: heard of or that you think might be fun. But

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Speaker 2: at least you bought stock of companies who make beer.

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Speaker 2: We're bringing joy to the masses. That's something that we

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Speaker 2: can get behind. Even though personally, I feel like Joel,

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Speaker 2: you and I have invested in breweries and beer companies

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Speaker 2: just via our consumption, Via our own consumption, it the

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Speaker 2: I don't know, I feel like there's that's the right

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Speaker 2: way to invest. A small, tiny dent that we've made

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Speaker 2: in the craft beer scene, I don't know, it does

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Speaker 2: not even register on the Richter scale. One of these

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Speaker 2: craft breweries and the impact that we've had on the industry.

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Speaker 1: One of these days will open up our own brewery

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Speaker 1: and then we'll it'll be like beer Mecca for how

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Speaker 1: to money. Listeners come hang out with us and they

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Speaker 1: have to make a trip to the southeast.

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Speaker 2: Did you see someone comment on something a few weeks

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Speaker 2: ago about there's a local brewery here in Atlanta and

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Speaker 2: they were selling and they're like, hey, boys, maybe I'll

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Speaker 2: look into this. Yeah, I did see that.

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Speaker 1: One of these something that can say it's on, it's

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Speaker 1: on my two consider this for sure, But no, I

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Speaker 1: agree with you and our friend Brian Ferraldi. Actually this

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Speaker 1: is something he talks about a lot, is investing in

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Speaker 1: individual stocks. And I tell you what, he wrote a

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Speaker 1: whole book. But we should have him on at some

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Speaker 1: point in the show to talk about this. But single

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Speaker 1: stock investing requires a whole lot of your time, attention,

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Speaker 1: and a lot of discipline. It requires so many different things.

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Speaker 1: That's why for most people were not big fans of it.

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Speaker 4: Right.

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Speaker 1: One of the reasons people tend to buy single stocks

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Speaker 1: is company familiarity, like buying it because you like their

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Speaker 1: beer or something, right, or I like watching Netflix, so

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Speaker 1: maybe I'll buy some Netflix stock.

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Speaker 2: This is the tasty beer. I want to invest in

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Speaker 2: this company, yeah, or which is obviously something that you

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Speaker 2: would definitely say after enjoying a very nice beer, to

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Speaker 2: be like, oh, well, help these guys out.

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Speaker 1: Or people invest in Apple because they like the iPhone

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Speaker 1: or the MacBook or whatever. And so even though those

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Speaker 1: companies make compelling products, you got to weigh so many

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Speaker 1: more factors before you opt to buy each of the

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Speaker 1: stocks on their own. So, for example, you got to

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Speaker 1: ask questions like, what's the competitive landscape like in those industries?

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Speaker 1: What's the current pe ratio price to earnings ratio that

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Speaker 1: the stock is trading at? How will I know when

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Speaker 1: to sell? Like at what point does the stock go

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Speaker 1: up enough? And now maybe it's not it's that company's

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Speaker 1: not in as favorable of a position, and so it's

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Speaker 1: time to get out. There are just so many unknowns

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Speaker 1: in the single stock investing sphere. And it's not that

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Speaker 1: it can't be done well. It's just that there are

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Speaker 1: hundreds of potential pitfalls, and most folks don't have the

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Speaker 1: time to accumulate that knowledge. Like we said, to do

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Speaker 1: single stock investing well, So I get why people are intrigued.

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Speaker 1: Why they're like, oh, this sounds kind of fun because

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Speaker 1: again going back to like sixth grade, when we did

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Speaker 1: that the stock investing thing, Matt, like we did in

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Speaker 1: middle school, like so many people did.

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Speaker 2: It's the exact stock investing game.

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Speaker 1: Yeah, the wrong way to learn about the market. But

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Speaker 1: for so many people it's intriguing, but it's not great

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Speaker 1: for building wealth.

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Speaker 2: And well, one of the considerations is what would you

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Speaker 2: otherwise do with that money? That's something that we offer.

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Speaker 2: That's a question we often raise because if the alternative

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Speaker 2: is to just drink it away, to literally spend it

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Speaker 2: all on the actual beer as opposed to the company,

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Speaker 2: then I would say, from a financial standpoint, you are

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Speaker 2: most likely going to come out further ahead by investing

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Speaker 2: in the actual company, right. I wish I had the

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Speaker 2: numbers on hand, But like, had you instead of purchasing

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Speaker 2: the first Macintosh three or whatever, had you instead taken

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Speaker 2: that money and invested within the Apple company in and

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Speaker 2: of itself. I don't know the specifics, but I'm pretty

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Speaker 2: sure you'd be a million a millionaire multiple times out

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Speaker 2: here for sure. No, that's true if you I'm the

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Speaker 2: iPod or not even the first Tesla that came out

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Speaker 2: if you had suck but instead purchase Tesla stock. So

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Speaker 2: it comes down to whether or not you're going to

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Speaker 2: consume those dollars. And if that's the alternative and you're like, well,

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Speaker 2: the only way I'm actually going to invest is by

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Speaker 2: doing this, I would say, well, chances are you probably

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Speaker 2: probably are going to come out ahead. Even though it's

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Speaker 2: not the most optimal way, I do like it better

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Speaker 2: than not investing at all. But that being said, vr

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Speaker 2: you said that you're going to sell that specific stock

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Speaker 2: or those stocks, maybe buy something different. What we would

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Speaker 2: encourage you to do then is to just get out

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Speaker 2: of the single stock investing game, get out of that sphere. Instead,

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Speaker 2: use the funds from that sale to go in on

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Speaker 2: just low cost total stock market index funds or a

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Speaker 2: target date fund. And the great thing about taking this

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Speaker 2: far simpler approach is that you're likely going to score

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Speaker 2: even higher returns over the years. And of course you're

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Speaker 2: also going to be able to declutter your brain at

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Speaker 2: the same time, right where you're not going to have

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Speaker 2: to think about the specific movements and what is going

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Speaker 2: on with the specific company, as opposed to just saying

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Speaker 2: you know what I'm going to invest basically in the

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Speaker 2: entire United States as a whole. Will we progress, Will

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Speaker 2: we continue to create goods and services that the not

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Speaker 2: only US citizens but people globally that they're willing to

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Speaker 2: invest in, And so kind of going back to what

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Speaker 2: I was saying before, even though it may be, investing

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Speaker 2: in anything is better than investing and nothing if truly

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Speaker 2: the easy button to hit is in index fund where

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Speaker 2: A you're not having to think about it, but B

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Speaker 2: you are going to be more optimally invested across many,

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Speaker 2: many different industries. You are going to be diversified. YEA.

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Speaker 1: Hopefully there aren't two options on the table, either consume

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Speaker 1: more beer or invest in beer stock. Hopefully there are

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Speaker 1: other directions you'd be willing to funnel those dollars. And

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Speaker 1: if that's the case, I agree, Matt. Like we talk

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Speaker 1: about here all the time, the simple route, the simple, diversified,

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Speaker 1: low cost route, is the best way to go. A

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Speaker 1: total stock market fund or a target day fund are

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Speaker 1: great places to stick money inside of that, roth Ira,

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Speaker 1: And let's get to the heart of BR's question here too,

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Speaker 1: because he's asking about the tax consequences of buying and

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Speaker 1: selling stock within his WROTH. And so it sounds like

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Speaker 1: you and I am Matt, we both agree that selling

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Speaker 1: this beer stock makes the most sense. But what are

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Speaker 1: the tax consequences for actually pulling the trigger on that? Well,

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Speaker 1: fortunately he made this investment inside of a tax advantage accountant,

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Speaker 1: one of our favorites, which is the ROTH IRA. And so,

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Speaker 1: not that you want to be trading regularly, but if

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Speaker 1: you are day trading like a crazy person, well, doing

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Speaker 1: it inside of a WROTH is going to prevent some

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Speaker 1: of the adverse tax impacts you're likely to encounter. Let's

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Speaker 1: say you were doing that instead a taxable brokerage account. Mm, yeah,

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Speaker 1: you have a potentially hefty tax bill at the end

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Speaker 1: of the year. And so again we're not suggesting you

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Speaker 1: take this route. We don't want you day trading like

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Speaker 1: a maniac. But slow and steady index investing inside of

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Speaker 1: that ROTH is the best move for most individuals. But

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Speaker 1: if you sell this stock inside of the ROTH and

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Speaker 1: you then purchase an index fund with the money that

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Speaker 1: you cash out of the beer stock, you won't have

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Speaker 1: any sort of tax consequences because you're in that tax

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Speaker 1: sheltered status essentially inside of that ROTH.

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Speaker 4: Yeah.

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Speaker 2: Yeah, So that's the good news of having invested within

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Speaker 2: a retirement account, even within a traditional as well, because

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Speaker 2: you could also buy and sell as much as you

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Speaker 2: want within a traditional irate, not just the WROTH, and

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Speaker 2: you are still not going to have to pay taxes

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Speaker 2: on any potential gains until you actually make any take

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Speaker 2: any distributions from that account.

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Speaker 1: Whereas if it was inside of a tax bill broker

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Speaker 1: you can't realize that every single time.

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Speaker 2: Yeah, one of the.

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Speaker 1: And it depends what your tax rate is on the gains,

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Speaker 1: depends on how long you've owned it, because if it's

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Speaker 1: less than a year, you're talking about ordinary income tax rates.

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Speaker 1: If you vote it that holding that position for more

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Speaker 1: than a year, you're talking to cap gains tax ring exactly.

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Speaker 2: And this this is sort of a nod to twenty

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Speaker 2: twenty and just the meme stock trading day trading frenzy

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Speaker 2: that was taking place back then. And I think this

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Speaker 2: has a lot to do with why we had a

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Speaker 2: more negative view of Robinhood because at that point in time,

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Speaker 2: they didn't have retirement accounts, they didn't have rough irays

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Speaker 2: or traditional I rays. All they had were brokerage accounts,

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Speaker 2: and so the assumption was was that they were siphoning

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Speaker 2: off all these potential investors who could be pouring money

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Speaker 2: into their actual retirement accounts that are far superior from

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Speaker 2: a tax standpoint, and instead they were getting tempted into

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Speaker 2: meme songs basically, And so that was whereas and then

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Speaker 2: they were righted that ship somewhat because now they offer

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Speaker 2: retirement accounts, but still it kind of has some of

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Speaker 2: that twenty twenty residue on it from all of the

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Speaker 2: trading that they were encouraging back then.

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Speaker 1: And so many of those traders were shocked at the

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Speaker 1: beginning of the next year. Oh yeah, and they saw

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Speaker 1: all the tax information and they were like, huh wait,

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Speaker 1: this is like this is like as thick as Ley

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Speaker 1: miz or something like that.

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Speaker 2: Like pages ten ninety nine B where they get all

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Speaker 2: their trade confirmations that they have to report to the IRS.

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Speaker 2: A lot of those folks were shocked.

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Speaker 1: It can be a tax assle but also a paperwork

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Speaker 1: castle when we're talking about filing your taxes if you

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Speaker 1: trade frequently inside of a brokerage account. But br keep

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Speaker 1: up the good work man. Do not worry about the

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Speaker 1: tax consequences of this sale because it's in the proper account.

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Speaker 2: You're good. It's you're good. You're set.

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Speaker 1: Yeah, and really, the only way you pay any sort

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Speaker 1: of penalty in regards to your roth ira. You can

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Speaker 1: even pull off those contributions whenever you want. We wouldn't

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Speaker 1: suggest it. We'd advise you to keep that money locked

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Speaker 1: inside of that roth for as many years as you can.

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Speaker 1: But the only way in which you're going to pay

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Speaker 1: any sort of penalty is if you take out the

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Speaker 1: earnings in that roth ira too early before you reach

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Speaker 1: retirement age. If that's the case, you are going to

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Speaker 1: pay that ten percent penalty to the federal government, which

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Speaker 1: is another reason to wait and not tap those funds

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Speaker 1: until you reset age fifty nine and a half threshold.

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Speaker 1: But yeah, we hope that advice steers you away from

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Speaker 1: attempting to pick stocks moving forward, and that you just

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Speaker 1: kind of take the average gains of the market, take

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Speaker 1: it in stride, and it's just going to kind of

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Speaker 1: keep your mind at ease to it, I think.

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Speaker 2: At the same time, that's right, Matt.

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Speaker 1: We've got more questions to get to, including one from

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Speaker 1: a listener who says, I think I make too much

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Speaker 1: to contribute to a roth What.

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Speaker 2: Do I do. Then we'll talk about that and more

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Speaker 2: right after this. Oh right, we are back and we

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Speaker 2: will get to a question soon about a couple who

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Speaker 2: may be on the path to fire. But first let's

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Speaker 2: hear from a listener who is trying to change her

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Speaker 2: money mindset.

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Speaker 3: Hi.

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Speaker 5: My name's Jenny, and I live in pickin South Carolina.

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Speaker 5: I've been a saveror my whole life. How do you

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Speaker 5: shift the mindset of a saver to a spender when

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Speaker 5: you're near or in retirement. I've got the funds, I

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Speaker 5: just cringe to use them, especially if there are tax implications.

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Speaker 5: Your guidance will be helpful.

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Speaker 2: Thanks so much, Rgel Jenny's cringing, can you relate I

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Speaker 2: come to spending some money?

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Speaker 1: No, I hear this, and I especially from five eight

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Speaker 1: years ago, Joel, I see myself in Jenny when she's

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Speaker 1: asking this question. She's certainly not alone in this, and

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Speaker 1: I think, well, the vast majority of Americans struggle with

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Speaker 1: the exact opposite problem. Right, So when people are like, true,

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Speaker 1: how do I actually start to save? Because I spent

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Speaker 1: too much? That is, I mean, when you look at

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Speaker 1: all the data, that is the majority average American, right,

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Speaker 1: who's just like out spending their paycheck. They're living on

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Speaker 1: the financial precipice. But actually there are a decent chunk

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Speaker 1: of folks in the how to Money audience who do

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Speaker 1: find it hard to spend their money, even if they've

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Speaker 1: got plenty of it.

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Speaker 2: It's funny, Matt.

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Speaker 1: When we were in New Orleans for FINCN, we met

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Speaker 1: a listener Dylan. I was talking to him and his wife, Danielle,

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Speaker 1: and she was talking about how he won't ever spend

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Speaker 1: on things, even if he's like loves the thing, and

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Speaker 1: it's like, we're such good savers, but he won't ever

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Speaker 1: pull the trigger. And I was like, I get it.

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Speaker 1: I've been there, that has been me, And so maybe

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Speaker 1: we should offer a few tips for Jenny and then

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Speaker 1: by proxy our friend Dylan too.

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Speaker 2: Yeah, totally, so, Jenny, I think it might be worth

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Speaker 2: asking yourself some questions. So first of all, I want

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Speaker 2: you to think through why is it that you've been

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Speaker 2: saving money in the first place. Truly A great way

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Speaker 2: to think about money, regardless of whether you're not you're

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Speaker 2: saving and investing it or spending it now, is that

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Speaker 2: at some point the ultimate goal of these dollars is

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Speaker 2: to actually spend it is that largely because you can't

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Speaker 2: take it with your matt. It's you're either spending it

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Speaker 2: now or you're spending it later.

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Speaker 1: Put it in the Costco casket with me, right, I

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Speaker 1: mean when you think about it like that, it puts

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Speaker 1: it in perspective. You're like, oh, yeah, no, I don't

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Speaker 1: want like hundreds of thousands of dollars tossed in the

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Speaker 1: casket metivarian and you realize that there are things that

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Speaker 1: can live on to do, but.

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Speaker 2: You're just confined by time. And so it's just it's

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Speaker 2: just a matter of when do you want to a

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Speaker 2: lot for yourself to actually spend these dollars. And so

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Speaker 2: if saving is just deferred spending, then what you need

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Speaker 2: to ask yourself is what were you hoping to accomplish

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Speaker 2: with the dollars that you opt to instead push into

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Speaker 2: the future. What we want you to do here is

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Speaker 2: to focus on some of the different spending goals. And

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Speaker 2: maybe I don't know that might even sound weird, like

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Speaker 2: don't you don't even say spending goals? Just think through

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Speaker 2: what do I want to accomplish in my life with

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Speaker 2: the people I love, with my friends. It can be

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Speaker 2: within my community lifestyle goals too, right, because for so many, well,

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Speaker 2: it's buying back their time. Yeah. Absolutely, And as you

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Speaker 2: start to explore and think through what you might want

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Speaker 2: to do, like just consider whether or not you want

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Speaker 2: to travel right or like maybe you want to spend

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Speaker 2: more time at the beach, or maybe you even want

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Speaker 2: to buy a beach home. What we want you to

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Speaker 2: ask yourself is what is your actual craft beer equivalent.

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Speaker 2: There's a reason that we ask that at the beginning

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Speaker 2: of all of our interviews because it's just such a

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Speaker 2: good insight into that specific individual and what it is

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Speaker 2: that they value and what it is that they prioritize.

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Speaker 2: And what's fun is that those things kind of they

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Speaker 2: change over time, But truly we want you to focus

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Speaker 2: on that and kind of find a way to ramp

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Speaker 2: up your spending on the things that are going to

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Speaker 2: be able to bring you happiness. Like, honestly, just take

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Speaker 2: a page out of ramit Seti's book and even think

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Speaker 2: about how you can take it up to eleven on

436
00:18:44,520 --> 00:18:46,600
Speaker 2: the things that you truly care about. We don't want

437
00:18:46,600 --> 00:18:49,160
Speaker 2: you to buy things that you don't care about. Don't

438
00:18:49,160 --> 00:18:51,159
Speaker 2: buy crap just because you can. We want you to

439
00:18:51,240 --> 00:18:54,440
Speaker 2: align your spending with your values, and then once you're

440
00:18:54,480 --> 00:18:56,920
Speaker 2: able to identify that, don't be afraid to funnel more

441
00:18:56,960 --> 00:19:00,520
Speaker 2: dollars in that direction. And if this is something maybe

442
00:19:00,520 --> 00:19:02,080
Speaker 2: that you haven't done, we would recommend for you to

443
00:19:02,200 --> 00:19:05,200
Speaker 2: check out our Money Mission Statement. The whole, the entire

444
00:19:05,240 --> 00:19:08,119
Speaker 2: reason that we created this worksheet was to help folks

445
00:19:08,119 --> 00:19:10,960
Speaker 2: to spend some time thinking through what is it that

446
00:19:11,000 --> 00:19:13,679
Speaker 2: I want to accomplish within my life? And that's going

447
00:19:13,760 --> 00:19:16,359
Speaker 2: to allow you to prioritize the dollars that you have

448
00:19:16,440 --> 00:19:18,560
Speaker 2: towards things that mean the most to you. I still

449
00:19:18,600 --> 00:19:20,320
Speaker 2: remember when we had wellingk to that, by the way,

450
00:19:20,680 --> 00:19:22,840
Speaker 2: the Money Mission Statement and within the show notes for

451
00:19:22,880 --> 00:19:24,639
Speaker 2: this episode, I remember when we had remat on the

452
00:19:24,640 --> 00:19:26,439
Speaker 2: show Matt and he was kind of pushing us in

453
00:19:26,480 --> 00:19:28,760
Speaker 2: that direction. And it's funny because I think most people,

454
00:19:28,840 --> 00:19:31,760
Speaker 2: like I said earlier, they don't have that problem. But

455
00:19:31,800 --> 00:19:33,840
Speaker 2: there are some people in the How of Money audience,

456
00:19:33,920 --> 00:19:36,760
Speaker 2: and you and I included at times, who focused so

457
00:19:36,840 --> 00:19:39,240
Speaker 2: much on saving and investing that we're not as focused

458
00:19:39,280 --> 00:19:41,560
Speaker 2: on living for the day and those dollars, if they

459
00:19:41,560 --> 00:19:44,239
Speaker 2: can fuel added joy in your life in the here

460
00:19:44,280 --> 00:19:46,359
Speaker 2: and now, while you're also being intentional for the future.

461
00:19:46,600 --> 00:19:48,760
Speaker 2: Don't be afraid to use them. Right, Let's talk about

462
00:19:49,000 --> 00:19:50,840
Speaker 2: another question you need to ask yourself. Is this money

463
00:19:50,880 --> 00:19:53,920
Speaker 2: actually for spending or are you hoping to be either

464
00:19:54,040 --> 00:19:57,280
Speaker 2: like incredibly philanthropic or you're wanting to give money away

465
00:19:57,320 --> 00:19:59,679
Speaker 2: to the next generation. Yeah, kids, grand kids, that kind

466
00:19:59,680 --> 00:20:02,040
Speaker 2: of stuff. Those are important questions to ask, important things

467
00:20:02,080 --> 00:20:04,320
Speaker 2: to think through as well, because some people are all

468
00:20:04,359 --> 00:20:07,240
Speaker 2: about that generational wealth, right. They want to help give

469
00:20:07,400 --> 00:20:10,479
Speaker 2: their kids and their kids' kids that the next generation.

470
00:20:10,560 --> 00:20:12,919
Speaker 2: They want to give their their family a leg up

471
00:20:12,960 --> 00:20:15,600
Speaker 2: from a financial perspective. They don't Maybe they start started

472
00:20:15,640 --> 00:20:18,080
Speaker 2: behind the eight ball and they want their their family

473
00:20:18,080 --> 00:20:20,520
Speaker 2: to start in front of the eight ball. I guess,

474
00:20:20,560 --> 00:20:24,840
Speaker 2: I don't know. But other people want to start on

475
00:20:24,920 --> 00:20:27,120
Speaker 2: top of it. The whole idea that the cue ball

476
00:20:27,200 --> 00:20:28,760
Speaker 2: is like if you're stuck behind the a ball because

477
00:20:28,760 --> 00:20:30,159
Speaker 2: you can't hit it right right, you have to go

478
00:20:30,200 --> 00:20:31,359
Speaker 2: around it, that kind of thing. So you want to

479
00:20:31,359 --> 00:20:32,320
Speaker 2: be in front of it. You want to just be

480
00:20:32,359 --> 00:20:35,680
Speaker 2: out in the open, yeah, nowhere near the wide open spaces.

481
00:20:35,800 --> 00:20:38,160
Speaker 1: But other people want to be able to give away

482
00:20:38,160 --> 00:20:40,280
Speaker 1: big chunks of their nest egg to charities that they

483
00:20:40,320 --> 00:20:44,399
Speaker 1: care about, which is admirable and a totally legit awesome

484
00:20:44,440 --> 00:20:46,840
Speaker 1: way to funnel those dollars you've been able to build

485
00:20:46,880 --> 00:20:48,600
Speaker 1: up over the years. You know, frugal folks who have

486
00:20:48,640 --> 00:20:51,320
Speaker 1: a hard time spending on personal consumption, they might find

487
00:20:51,359 --> 00:20:53,720
Speaker 1: it easier to give away money to a worthy cost.

488
00:20:53,760 --> 00:20:56,359
Speaker 1: So ask yourself those questions because that can dictate what

489
00:20:56,400 --> 00:20:58,200
Speaker 1: you do with some of those dollars now as well.

490
00:20:58,320 --> 00:21:00,640
Speaker 1: Maybe you're saying, listen, I have all that I need.

491
00:21:00,680 --> 00:21:02,760
Speaker 1: I'm not trying to move the goalpost. I don't want

492
00:21:02,960 --> 00:21:05,200
Speaker 1: a yacht or a beach house like, but I would

493
00:21:05,240 --> 00:21:07,720
Speaker 1: love to see to be able to donate five figures

494
00:21:07,840 --> 00:21:11,040
Speaker 1: or six figures to these two or three charities that

495
00:21:11,119 --> 00:21:12,760
Speaker 1: mean so much to me, that do great work where

496
00:21:12,800 --> 00:21:16,639
Speaker 1: I live or across the ocean. Those are great questions

497
00:21:16,680 --> 00:21:19,200
Speaker 1: to ask because I think they'll help bring out maybe

498
00:21:19,400 --> 00:21:21,919
Speaker 1: ways that you can funnel the money not instead of

499
00:21:21,960 --> 00:21:22,520
Speaker 1: just hoarding it.

500
00:21:22,560 --> 00:21:25,000
Speaker 2: Absolutely, because I think oftentimes, like when you say, oh,

501
00:21:25,040 --> 00:21:29,199
Speaker 2: you should travel more, somebody who's maybe in traditional retirement

502
00:21:29,240 --> 00:21:31,200
Speaker 2: years are thinking, man, I don't want to travel, like

503
00:21:31,960 --> 00:21:34,000
Speaker 2: that's for my kids to do, or that's what the

504
00:21:34,000 --> 00:21:37,720
Speaker 2: grand kids are doing. The ability to instead channel your

505
00:21:38,040 --> 00:21:41,199
Speaker 2: dollars and your efforts towards something that is meaningful to you,

506
00:21:41,240 --> 00:21:44,040
Speaker 2: I think can be incredibly worthwhile and it can sort

507
00:21:44,040 --> 00:21:49,199
Speaker 2: of remove this self absorbed, consumption based mentality that I

508
00:21:49,240 --> 00:21:51,720
Speaker 2: think some folks might feel when we say what's your

509
00:21:51,720 --> 00:21:53,320
Speaker 2: craft beer equivalent? Like what do you want to spend

510
00:21:53,320 --> 00:21:55,320
Speaker 2: a ton of money on? And instead I think if

511
00:21:55,359 --> 00:21:57,639
Speaker 2: you can focus on like the happiness of other people,

512
00:21:58,600 --> 00:22:00,720
Speaker 2: I think ultimately that can bring a lot of those

513
00:22:00,760 --> 00:22:03,720
Speaker 2: folks actual happiness, right instead of trying to actively pursue

514
00:22:04,080 --> 00:22:06,480
Speaker 2: the things like what is it out there that's going

515
00:22:06,560 --> 00:22:08,680
Speaker 2: to make me happy? I think if you can live

516
00:22:08,760 --> 00:22:10,800
Speaker 2: your life in a way that is able to be

517
00:22:10,880 --> 00:22:12,960
Speaker 2: a service to others, I think for a lot of

518
00:22:13,000 --> 00:22:15,320
Speaker 2: those folks, maybe that's the ticket. Like that's the answer.

519
00:22:15,760 --> 00:22:17,800
Speaker 2: And it's funny that you mentioned remat because one of

520
00:22:17,840 --> 00:22:20,600
Speaker 2: the things that I remember, like you said, he kind

521
00:22:20,600 --> 00:22:22,399
Speaker 2: of challenged us that he talked about when it came

522
00:22:22,400 --> 00:22:24,639
Speaker 2: to craft beer, but he said, well, how can you

523
00:22:24,680 --> 00:22:26,960
Speaker 2: how can you crank that up to eleven? And we're like, well,

524
00:22:27,119 --> 00:22:29,879
Speaker 2: we drink like the best beers in the world. I

525
00:22:29,880 --> 00:22:32,720
Speaker 2: don't know how else we could ramp that up. He

526
00:22:32,840 --> 00:22:34,520
Speaker 2: kept asking a few questions, but then one of the

527
00:22:34,520 --> 00:22:36,720
Speaker 2: things he said was, well, what about if you like

528
00:22:36,760 --> 00:22:38,480
Speaker 2: took a bunch of your friends along with you and

529
00:22:38,520 --> 00:22:40,280
Speaker 2: they were able to and you're and you're paying for

530
00:22:40,320 --> 00:22:42,480
Speaker 2: their tickets or you're you're paying for their beers. And

531
00:22:42,520 --> 00:22:44,760
Speaker 2: it's funny because you just mentioned like the listener beer

532
00:22:44,800 --> 00:22:46,720
Speaker 2: hang when we're in New Orleans, Like that's something that

533
00:22:46,760 --> 00:22:49,160
Speaker 2: we were able to do there is cover everybody's beer.

534
00:22:49,240 --> 00:22:51,120
Speaker 2: The ability for us to be generous in that way

535
00:22:51,560 --> 00:22:54,680
Speaker 2: is I know, something that brings us both a tremendous

536
00:22:54,720 --> 00:22:57,080
Speaker 2: amount of joy because that's the kind of environment in

537
00:22:57,080 --> 00:22:59,680
Speaker 2: the community. Not only do we want to see at

538
00:22:59,800 --> 00:23:02,560
Speaker 2: my nice, awesome, delicious craft breweries, but just within the

539
00:23:02,560 --> 00:23:04,840
Speaker 2: how to money community and the world at large, right,

540
00:23:04,880 --> 00:23:07,199
Speaker 2: the ability to be generous with what it is that

541
00:23:07,240 --> 00:23:09,320
Speaker 2: you've been blessed with and using that to help other

542
00:23:09,359 --> 00:23:09,960
Speaker 2: folks out too.

543
00:23:10,040 --> 00:23:12,080
Speaker 1: Yeah, I think picking up the tab of dinner buying

544
00:23:12,080 --> 00:23:14,000
Speaker 1: beers for a friend like that is the kind of thing.

545
00:23:13,960 --> 00:23:17,160
Speaker 2: That I never regret it. Yeah, ever, Like it makes

546
00:23:17,200 --> 00:23:18,080
Speaker 2: me so happy just.

547
00:23:18,040 --> 00:23:19,719
Speaker 1: To think back to that event, think about the smiles

548
00:23:19,720 --> 00:23:21,880
Speaker 1: on people's faces and be like, we got to play

549
00:23:21,920 --> 00:23:24,720
Speaker 1: a role in that. So yeah, and I'll say this too,

550
00:23:24,760 --> 00:23:25,960
Speaker 1: I think it's tough to change.

551
00:23:25,760 --> 00:23:26,520
Speaker 2: Your mindset on this.

552
00:23:26,640 --> 00:23:29,879
Speaker 1: If you have been kind of a frugal lighte and

553
00:23:30,000 --> 00:23:33,480
Speaker 1: adherent to frugal mantras for most of your life, it's

554
00:23:33,520 --> 00:23:35,080
Speaker 1: really tough to kind of turn on a dime. And

555
00:23:35,080 --> 00:23:37,480
Speaker 1: I think it takes a little bit a little while

556
00:23:37,680 --> 00:23:41,720
Speaker 1: to actually kind of move into spend or territory, even

557
00:23:41,760 --> 00:23:44,760
Speaker 1: if it's somewhat reluctant. And so I think it's important

558
00:23:44,800 --> 00:23:46,840
Speaker 1: to realize that the tool that got you to where

559
00:23:46,880 --> 00:23:48,639
Speaker 1: you are is not the one that's going to help

560
00:23:48,680 --> 00:23:52,600
Speaker 1: you enjoy the most meaningful retirements. And the saddest stories

561
00:23:52,600 --> 00:23:55,119
Speaker 1: to me actually from a money perspective are the ones

562
00:23:55,160 --> 00:23:58,119
Speaker 1: where it's someone who had a very low income and

563
00:23:58,200 --> 00:24:00,440
Speaker 1: retired with millions and millions and millions. In the there's

564
00:24:00,480 --> 00:24:03,560
Speaker 1: the one of the janitor who retired with eight million dollars,

565
00:24:03,760 --> 00:24:05,480
Speaker 1: but nobody knew that he had any money because of

566
00:24:05,520 --> 00:24:08,640
Speaker 1: the way he lived. He lived so such a spartan existence,

567
00:24:08,840 --> 00:24:10,639
Speaker 1: and in some ways that's kind of cool, right. It

568
00:24:10,680 --> 00:24:13,920
Speaker 1: proves the power of compounding returns and that almost anybody,

569
00:24:14,080 --> 00:24:17,399
Speaker 1: even on a low income, can amass millions. But on

570
00:24:17,440 --> 00:24:20,359
Speaker 1: the other side of the equation, right, it makes makes

571
00:24:20,359 --> 00:24:22,399
Speaker 1: me realize at least that I'd like to see my

572
00:24:22,480 --> 00:24:24,480
Speaker 1: money bring my family joy and do good in the

573
00:24:24,480 --> 00:24:27,200
Speaker 1: world while I'm alive and cacking. I don't necessarily want

574
00:24:27,200 --> 00:24:29,359
Speaker 1: to build up millions and millions and millions to be

575
00:24:29,440 --> 00:24:31,280
Speaker 1: dispersed after I'm gone.

576
00:24:31,359 --> 00:24:33,960
Speaker 2: Yeah, and this isn't to say that someone who works

577
00:24:34,000 --> 00:24:37,200
Speaker 2: like a minimum wage job for their entire life and

578
00:24:37,280 --> 00:24:39,280
Speaker 2: never takes a break, that there's anything to be looked

579
00:24:39,280 --> 00:24:42,719
Speaker 2: down upon if that's the path that they've chosen, right,

580
00:24:42,760 --> 00:24:44,479
Speaker 2: as long as they're doing it intentionally, because I think

581
00:24:44,480 --> 00:24:46,720
Speaker 2: there's a lesson that a lot of folks can learn

582
00:24:46,720 --> 00:24:49,080
Speaker 2: where it's just like, oh man, that individual was able

583
00:24:49,119 --> 00:24:52,600
Speaker 2: to find happiness doing something in service of others, right, Like,

584
00:24:52,600 --> 00:24:55,119
Speaker 2: it's an incredibly humble job, and what better way to

585
00:24:56,160 --> 00:24:59,360
Speaker 2: basically love other people than doing that. As long as

586
00:24:59,400 --> 00:25:02,800
Speaker 2: you're doing it intentionally and you're aware and your eyes

587
00:25:02,800 --> 00:25:04,960
Speaker 2: are open to what's out there that you could be doing,

588
00:25:05,240 --> 00:25:06,480
Speaker 2: I think that that's totally fun.

589
00:25:06,480 --> 00:25:08,119
Speaker 1: It's not even about getting a different job, it's just

590
00:25:08,160 --> 00:25:12,639
Speaker 1: about not pushing all those dollars to such an extreme

591
00:25:12,680 --> 00:25:14,880
Speaker 1: future that you don't ever get to enjoy or see

592
00:25:14,920 --> 00:25:16,679
Speaker 1: them do good. Sure, if you think for a lot

593
00:25:16,720 --> 00:25:18,439
Speaker 1: of people it's done out of a scarcity mindset.

594
00:25:19,480 --> 00:25:21,440
Speaker 2: And if that's the case, then that's what we're pushing

595
00:25:21,480 --> 00:25:23,680
Speaker 2: back against the fact that, hey, at some point it's

596
00:25:23,920 --> 00:25:26,760
Speaker 2: worth considering what you could do with these dollars. I

597
00:25:26,760 --> 00:25:29,320
Speaker 2: don't know if thinking about the same story or whatever.

598
00:25:29,359 --> 00:25:32,199
Speaker 2: But the guy, I think he left most of the

599
00:25:32,240 --> 00:25:34,720
Speaker 2: money to like a local library, which is awesome. And

600
00:25:34,760 --> 00:25:36,920
Speaker 2: if that's because he was a patron there and he

601
00:25:37,000 --> 00:25:38,639
Speaker 2: knew the folks there and knew that they needed the funding,

602
00:25:38,720 --> 00:25:42,040
Speaker 2: or that's just something that he wanted to further within

603
00:25:42,080 --> 00:25:45,439
Speaker 2: his community. If that's something that was done intentionally, I

604
00:25:45,480 --> 00:25:49,600
Speaker 2: am totally for that. But I do agree that there's like,

605
00:25:49,800 --> 00:25:51,440
Speaker 2: I like what you said about the tools I got

606
00:25:51,440 --> 00:25:53,720
Speaker 2: you to where you are now are not necessarily the

607
00:25:53,720 --> 00:25:55,880
Speaker 2: same tools that you're gonna need to put to use

608
00:25:55,920 --> 00:25:58,280
Speaker 2: moving forward. There is so much of our own identity

609
00:25:58,280 --> 00:26:01,040
Speaker 2: that's tied up in how it is that we got

610
00:26:01,040 --> 00:26:03,400
Speaker 2: to where we are right And so for the person

611
00:26:03,440 --> 00:26:06,119
Speaker 2: out there who's an ultra frugal light. It's gonna be

612
00:26:06,200 --> 00:26:08,199
Speaker 2: really hard for them to kind of break free of

613
00:26:08,240 --> 00:26:10,960
Speaker 2: that mindset that got them to the point to where

614
00:26:11,000 --> 00:26:13,000
Speaker 2: they have that money. Like literally, I was talking to

615
00:26:13,000 --> 00:26:16,720
Speaker 2: a buddy this morning and we're talking about Tesla's and

616
00:26:17,040 --> 00:26:19,840
Speaker 2: he's also a fan of Tesla's. But then he thought through,

617
00:26:20,000 --> 00:26:22,200
Speaker 2: He's like, well, I don't necessarily need one right now,

618
00:26:22,520 --> 00:26:24,040
Speaker 2: but maybe if the car broke down and you know,

619
00:26:24,080 --> 00:26:25,919
Speaker 2: we had the money saved up. But he said, but

620
00:26:26,000 --> 00:26:29,040
Speaker 2: even still, it would be hard for me to accept

621
00:26:29,040 --> 00:26:31,600
Speaker 2: the fact that I'm the guy driving the Tesla. He's like,

622
00:26:32,320 --> 00:26:35,480
Speaker 2: you know, he drives an old Honda's Hannah Accord, And

623
00:26:35,560 --> 00:26:39,080
Speaker 2: for him, it's like, you know, he associates the person

624
00:26:39,080 --> 00:26:40,960
Speaker 2: that drives a Tesla as a certain type of person,

625
00:26:41,119 --> 00:26:43,119
Speaker 2: and he doesn't want to be that person. It's just

626
00:26:43,119 --> 00:26:44,760
Speaker 2: that he thinks of the car is super cool. So

627
00:26:44,800 --> 00:26:46,840
Speaker 2: it's hard for us to break free of that identity.

628
00:26:46,840 --> 00:26:49,520
Speaker 2: And sometimes it means saying, you know what, just because

629
00:26:49,560 --> 00:26:52,320
Speaker 2: I have in the past perceived someone that spends in

630
00:26:52,359 --> 00:26:54,680
Speaker 2: this way or uses their money to do x YZ,

631
00:26:54,840 --> 00:26:57,640
Speaker 2: whatever it is, that doesn't necessarily mean that you can't

632
00:26:57,760 --> 00:27:00,600
Speaker 2: sort of change that narrative and own how it is

633
00:27:00,600 --> 00:27:02,240
Speaker 2: that you want to spend that money and still be

634
00:27:02,240 --> 00:27:05,800
Speaker 2: the person that you are, not this sort of stereotypical

635
00:27:05,840 --> 00:27:07,440
Speaker 2: person who's gonna, you know, flash money.

636
00:27:07,520 --> 00:27:09,199
Speaker 1: I think probably things that you and I said on

637
00:27:09,200 --> 00:27:11,159
Speaker 1: the podcast in that first year, in particular when we

638
00:27:11,200 --> 00:27:13,800
Speaker 1: have much younger kids. Yeah, we were all about, like, well,

639
00:27:14,040 --> 00:27:16,480
Speaker 1: throw all every kid you have in the same bedroom,

640
00:27:16,640 --> 00:27:18,240
Speaker 1: and like we would we would say things like that,

641
00:27:18,600 --> 00:27:21,280
Speaker 1: and I think there's like a small amount of wisdom

642
00:27:21,280 --> 00:27:23,240
Speaker 1: in that. But it's not for everybody, and it's not

643
00:27:23,240 --> 00:27:25,920
Speaker 1: for us anymore. That was for younger us. Your priorities change,

644
00:27:25,960 --> 00:27:27,760
Speaker 1: Oh yeah, and so I think it's okay to let

645
00:27:27,760 --> 00:27:31,760
Speaker 1: your priorities change, and it's okay to redefine expectations. Obviously

646
00:27:31,960 --> 00:27:33,560
Speaker 1: spend less than you are and make sure you know

647
00:27:33,720 --> 00:27:37,600
Speaker 1: it's but finding those things that you are willing to

648
00:27:37,640 --> 00:27:40,240
Speaker 1: happily spend money on is part of the joy of

649
00:27:40,240 --> 00:27:42,159
Speaker 1: having money too, So yeah, don't lean into that a

650
00:27:42,200 --> 00:27:44,680
Speaker 1: little bit. And by the way, totally Jenny mentioned tax

651
00:27:44,720 --> 00:27:47,800
Speaker 1: implications and definitely do not throw caution in the wind

652
00:27:48,040 --> 00:27:50,040
Speaker 1: when it comes to taxes. But if you've been saving

653
00:27:50,040 --> 00:27:52,440
Speaker 1: in tax advantage, accounts for decades, you've been able to

654
00:27:52,480 --> 00:27:54,040
Speaker 1: avoid a whole lot of tax right that you would

655
00:27:54,040 --> 00:27:56,520
Speaker 1: have otherwise had to pay. And you can't avoid it

656
00:27:56,560 --> 00:27:59,359
Speaker 1: forever because you're likely going to encounter R and d's

657
00:27:59,400 --> 00:28:02,719
Speaker 1: required men distributions in your early seventies, and so if

658
00:28:02,720 --> 00:28:04,639
Speaker 1: you haven't started tapping into some of those funds in

659
00:28:04,680 --> 00:28:08,160
Speaker 1: the coming years, your overall tax liability could be even

660
00:28:08,240 --> 00:28:13,400
Speaker 1: larger because you're gonna have higher forced distributions every single year.

661
00:28:13,560 --> 00:28:15,480
Speaker 1: So it might even make sense from a financial from

662
00:28:15,480 --> 00:28:18,399
Speaker 1: a tax perspective, to tap some of those funds.

663
00:28:18,160 --> 00:28:21,679
Speaker 2: Opposed to getting penalized. Yes, exactly. In this way, the

664
00:28:21,720 --> 00:28:24,800
Speaker 2: IRS is actually kind of helpful because they're helping you

665
00:28:24,840 --> 00:28:26,880
Speaker 2: to spend your money. I think it used to be

666
00:28:26,960 --> 00:28:29,080
Speaker 2: if you skipped out on your rmds, I think it

667
00:28:29,119 --> 00:28:31,080
Speaker 2: was fifty percent, but then that got bummed down to

668
00:28:31,119 --> 00:28:33,760
Speaker 2: twenty five percent with secure two point zero, which is

669
00:28:33,800 --> 00:28:37,520
Speaker 2: still a lot higher than the vast majority of folks

670
00:28:37,680 --> 00:28:40,120
Speaker 2: given the tax bracket that the majority of Americans are in.

671
00:28:40,160 --> 00:28:42,600
Speaker 2: So even that being said, twenty five percent, you're like, oh,

672
00:28:42,640 --> 00:28:44,480
Speaker 2: that's not too bad. No, that's still a lot more

673
00:28:44,920 --> 00:28:48,000
Speaker 2: than your actual tax bracket. And what it is that

674
00:28:48,000 --> 00:28:50,840
Speaker 2: you're paying, and so Jenny hopefully doesn't take the irs

675
00:28:51,200 --> 00:28:53,880
Speaker 2: basically getting ready to siphon off a big old take

676
00:28:53,880 --> 00:28:55,720
Speaker 2: a big old bite out of your retirement dollars to

677
00:28:55,720 --> 00:28:57,720
Speaker 2: actually get you to spend some of your money. But hey,

678
00:28:59,800 --> 00:29:02,640
Speaker 2: it's sort of like, I don't know, it's like a

679
00:29:02,680 --> 00:29:04,680
Speaker 2: cliff and you know you're getting close to it and

680
00:29:04,760 --> 00:29:06,160
Speaker 2: you don't want to turn the wheel, but at some

681
00:29:06,200 --> 00:29:07,840
Speaker 2: point you're going to be forced to otherwise you're going

682
00:29:07,880 --> 00:29:09,440
Speaker 2: to lose even more of your mind. I'm driving to

683
00:29:09,560 --> 00:29:11,200
Speaker 2: the air if I always want to turn the wheel.

684
00:29:11,920 --> 00:29:13,920
Speaker 2: But Jenny, we hope that that gets you pointed in

685
00:29:13,960 --> 00:29:16,240
Speaker 2: the right direction. Joel, let's hear from our next listener

686
00:29:16,240 --> 00:29:19,360
Speaker 2: who is totally crushing it when it comes to her investments,

687
00:29:19,480 --> 00:29:21,480
Speaker 2: but she has found herself in a pickle.

688
00:29:21,880 --> 00:29:24,840
Speaker 6: Hey, Matt and Joel, this is Rihanna from Lancaster, PA.

689
00:29:25,440 --> 00:29:28,720
Speaker 6: And no we're not all amish here. So I love

690
00:29:28,800 --> 00:29:32,480
Speaker 6: the podcast and the newsletter Straight Fire. Thanks for all

691
00:29:32,520 --> 00:29:36,040
Speaker 6: you guys do. So here's my question. When discussing our

692
00:29:36,040 --> 00:29:39,440
Speaker 6: twenty twenty three tax return with our financial advisor recently,

693
00:29:39,800 --> 00:29:43,920
Speaker 6: he pointed out that our adjusted gross income AGI is

694
00:29:43,920 --> 00:29:47,000
Speaker 6: getting close to the threshold that would lower the maximum

695
00:29:47,040 --> 00:29:50,040
Speaker 6: amount we can contribute to our roth iras this year.

696
00:29:50,880 --> 00:29:53,680
Speaker 6: For context, my husband and I both maxed out are

697
00:29:53,800 --> 00:29:57,360
Speaker 6: roth iras last year and have also already paid sixty

698
00:29:57,400 --> 00:30:00,000
Speaker 6: five hundred dollars each to max them out this year.

699
00:30:01,120 --> 00:30:03,800
Speaker 6: So since we're expecting to make more than the max

700
00:30:03,840 --> 00:30:07,920
Speaker 6: AGI next year, I have two concerns. One, is I

701
00:30:07,960 --> 00:30:10,480
Speaker 6: already have that money for my twenty twenty three roth

702
00:30:10,520 --> 00:30:13,720
Speaker 6: ira invest it into a target date fund with Vanguard.

703
00:30:14,000 --> 00:30:17,440
Speaker 6: How do I avoid being penalized for over contributing if

704
00:30:17,440 --> 00:30:21,360
Speaker 6: we cross the AGI threshold. Secondly, I'd love to hear

705
00:30:21,400 --> 00:30:23,600
Speaker 6: your thoughts on whether it would be better for us

706
00:30:23,640 --> 00:30:28,080
Speaker 6: to avoid crossing the threshold by lowering our AGI, maybe

707
00:30:28,120 --> 00:30:31,280
Speaker 6: through increasing our four oh one K contributions or HSA

708
00:30:31,400 --> 00:30:34,120
Speaker 6: contributions which I just signed up for by the way,

709
00:30:34,200 --> 00:30:37,040
Speaker 6: thanks for that tip, or is it better to take

710
00:30:37,040 --> 00:30:41,000
Speaker 6: advantage of something like a backdoor roth ira. I highly

711
00:30:41,120 --> 00:30:44,000
Speaker 6: value your guys's opinions, so I'm really looking forward to

712
00:30:44,000 --> 00:30:46,600
Speaker 6: hearing your take. Thanks for all you guys do. It's

713
00:30:46,640 --> 00:30:49,000
Speaker 6: truly life changing. And by the way, if you ever

714
00:30:49,040 --> 00:30:52,640
Speaker 6: come across Beers from Evergrain or Hidden River. Those are

715
00:30:52,680 --> 00:30:56,280
Speaker 6: by far the best two breweries in our area, especially

716
00:30:56,320 --> 00:30:57,520
Speaker 6: for hazy IPAs.

717
00:30:58,000 --> 00:31:00,320
Speaker 2: Cheers all right, Rihanna, thank you so much for the

718
00:31:00,400 --> 00:31:00,880
Speaker 2: kind words.

719
00:31:00,920 --> 00:31:02,640
Speaker 1: And and by the way, if you're listening and you

720
00:31:02,680 --> 00:31:04,920
Speaker 1: haven't signed up for the how to Money newsletter, the

721
00:31:04,960 --> 00:31:08,080
Speaker 1: best newsletter in the history of personal finance newsletters, what's

722
00:31:08,080 --> 00:31:08,440
Speaker 1: your problem?

723
00:31:08,440 --> 00:31:09,640
Speaker 2: What are you doing? You go to a hotta money

724
00:31:09,640 --> 00:31:12,800
Speaker 2: dot com slash newsletter? That happens. Thanks for those brewery

725
00:31:12,800 --> 00:31:15,520
Speaker 2: recommendations as well. Yeah, or Grain, We'll always take that

726
00:31:15,640 --> 00:31:17,200
Speaker 2: Hidden River. And by the way, do you think they've

727
00:31:17,240 --> 00:31:23,600
Speaker 2: got a ranch next to Hidden Valley? Hidden Mealley Ranch?

728
00:31:23,640 --> 00:31:26,400
Speaker 2: I pa? Or well? I mean if they don't, they

729
00:31:26,480 --> 00:31:28,920
Speaker 2: are totally missing out on a great marketing opportunity.

730
00:31:28,960 --> 00:31:30,440
Speaker 1: I don't think by the way, Rhanna was trying to

731
00:31:30,480 --> 00:31:32,240
Speaker 1: make a dig on the Amish. But there's lots of

732
00:31:32,240 --> 00:31:34,280
Speaker 1: love about the Amish, So I just want to state

733
00:31:34,320 --> 00:31:37,040
Speaker 1: that clearly right now. There's a lot for like, there's

734
00:31:37,040 --> 00:31:38,440
Speaker 1: a lot of lessons we could learn and how they live.

735
00:31:38,800 --> 00:31:41,200
Speaker 2: Why are you hating? No? I mean kind of like

736
00:31:41,200 --> 00:31:43,640
Speaker 2: what we're talking about going back to like the custodian

737
00:31:43,760 --> 00:31:46,000
Speaker 2: or the janitor who works their entire life. There's something

738
00:31:46,040 --> 00:31:50,080
Speaker 2: to be said about finding contentment and happiness when in

739
00:31:50,760 --> 00:31:54,000
Speaker 2: a simpler life as opposed to all the pop culture

740
00:31:54,120 --> 00:31:56,720
Speaker 2: and new technology and the things that we think we

741
00:31:56,760 --> 00:32:00,320
Speaker 2: need like Tesla's electric vehicles tum iPhone of the things

742
00:32:00,360 --> 00:32:01,840
Speaker 2: I think I need that are going to make me happy.

743
00:32:01,880 --> 00:32:04,720
Speaker 1: I know, yeah no, and oftentimes they make us more miserable.

744
00:32:04,920 --> 00:32:08,080
Speaker 1: But onto the money question, what's the best way forward

745
00:32:08,240 --> 00:32:11,240
Speaker 1: when you get close to that roth ira income threshold?

746
00:32:11,280 --> 00:32:13,600
Speaker 1: That's kind of the basic of what Brihanna is asking about,

747
00:32:13,800 --> 00:32:16,160
Speaker 1: and so let's talk about how that works. And honestly,

748
00:32:16,280 --> 00:32:19,080
Speaker 1: it's just a bad setup in our opinion. There are

749
00:32:19,120 --> 00:32:21,560
Speaker 1: already strict income limits when it comes to being able

750
00:32:21,560 --> 00:32:24,120
Speaker 1: to contribute to a roth at all, and plus a

751
00:32:24,200 --> 00:32:26,680
Speaker 1: massive number of folks have access to a roth ORL

752
00:32:26,680 --> 00:32:29,600
Speaker 1: and K at work, So why not just give everyone

753
00:32:29,600 --> 00:32:32,640
Speaker 1: access to a roth ira no matter how much they make? Like,

754
00:32:32,840 --> 00:32:34,920
Speaker 1: why does this have to be as complex?

755
00:32:35,120 --> 00:32:35,480
Speaker 4: Right? Four?

756
00:32:35,440 --> 00:32:39,160
Speaker 1: Okay, with no income limitations regardless, So why does the

757
00:32:39,240 --> 00:32:42,600
Speaker 1: roth ira have to have one? Especially when the income limit,

758
00:32:42,600 --> 00:32:45,520
Speaker 1: the contribution limit is is so much smaller. Just let

759
00:32:45,560 --> 00:32:48,480
Speaker 1: anybody contribute like irs, Come on, Congress, let's do something

760
00:32:48,480 --> 00:32:52,200
Speaker 1: about this. But the roth IRA income limits are two

761
00:32:52,240 --> 00:32:54,880
Speaker 1: hundred and twenty eight thousand dollars for married folks filing

762
00:32:54,960 --> 00:32:57,280
Speaker 1: jointly this year and one hundred and fifty three thousand

763
00:32:57,320 --> 00:32:59,360
Speaker 1: and four single filers in twenty twenty three.

764
00:33:00,160 --> 00:33:00,680
Speaker 2: More than that.

765
00:33:01,120 --> 00:33:03,840
Speaker 1: You probably shouldn't be mad about missing out on the

766
00:33:03,920 --> 00:33:05,640
Speaker 1: roth You should be pumped that you're crushing it in

767
00:33:05,680 --> 00:33:09,800
Speaker 1: your career. But it's important to know those limits because

768
00:33:09,800 --> 00:33:11,560
Speaker 1: then it means you're no longer eligible.

769
00:33:11,640 --> 00:33:13,840
Speaker 2: That's true, right, Yeah, I love too how it sounds

770
00:33:13,880 --> 00:33:16,440
Speaker 2: like that they like they might be taking my approach

771
00:33:16,480 --> 00:33:19,920
Speaker 2: where they're saving the previous year for next year's contributions. Right,

772
00:33:19,960 --> 00:33:24,280
Speaker 2: so instead of setting aside monthly amounts for investing where

773
00:33:24,280 --> 00:33:27,280
Speaker 2: your dollar cost averaging, setting aside that month that money,

774
00:33:27,480 --> 00:33:30,000
Speaker 2: storing it up, creating a little stockpile, a little treasure chest,

775
00:33:30,160 --> 00:33:32,640
Speaker 2: like a little war chest, and then when January hits boom,

776
00:33:32,680 --> 00:33:34,240
Speaker 2: you have the ability to deploy it. That's what it

777
00:33:34,240 --> 00:33:37,120
Speaker 2: sounds like, which I love Vianna and her husband are doing.

778
00:33:37,480 --> 00:33:40,320
Speaker 2: You are making that a priority. Future you will be thankful,

779
00:33:40,600 --> 00:33:43,080
Speaker 2: but you might have some more time to funnel at

780
00:33:43,120 --> 00:33:45,880
Speaker 2: least some of those dollars into a roth IRA if

781
00:33:45,920 --> 00:33:49,280
Speaker 2: you are strategic about it, and you mentioned some great

782
00:33:49,360 --> 00:33:52,080
Speaker 2: possible solutions, and our favorite of the ones that you

783
00:33:52,160 --> 00:33:56,160
Speaker 2: mentioned is to lower your overall AGI by contributing more

784
00:33:56,200 --> 00:34:00,320
Speaker 2: money to those other tax advantage retirement accounts. Where you

785
00:34:00,440 --> 00:34:02,479
Speaker 2: to do that, you're going to come out ahead. It's

786
00:34:02,520 --> 00:34:05,000
Speaker 2: a win win sort of situation because you get to

787
00:34:05,040 --> 00:34:07,640
Speaker 2: continue putting dollars within that roth IRA that gives you

788
00:34:07,680 --> 00:34:12,400
Speaker 2: that ultimate maximum flexibility, but you're also investing more overall,

789
00:34:12,640 --> 00:34:14,319
Speaker 2: and you're able to do it in two of our

790
00:34:14,640 --> 00:34:17,719
Speaker 2: other favorite tax advantage accounts you mentioned the four one K,

791
00:34:17,920 --> 00:34:21,240
Speaker 2: you mentioned the HSA, which is the ultimate tax advantaged account,

792
00:34:21,520 --> 00:34:23,920
Speaker 2: And so as long as your income is within spitting distance,

793
00:34:23,960 --> 00:34:27,759
Speaker 2: those minor tweaks, those manipulations can keep you on the

794
00:34:27,800 --> 00:34:31,520
Speaker 2: good side of being able to access a ROTH. Yep.

795
00:34:31,560 --> 00:34:34,359
Speaker 1: I love that too, because it's like, hey, what if

796
00:34:34,360 --> 00:34:37,320
Speaker 1: I just invest more that allows me to then invest

797
00:34:37,360 --> 00:34:39,640
Speaker 1: more in the ROTH. It's like uh huh, yep, Okay,

798
00:34:39,640 --> 00:34:41,200
Speaker 1: you have our attend that sounds good. That sounds good

799
00:34:41,320 --> 00:34:43,960
Speaker 1: us and it's not just sixty nie hundred bucks, but

800
00:34:44,000 --> 00:34:47,040
Speaker 1: it's sixty five hundred bucks times too. Because Rihanna is

801
00:34:47,040 --> 00:34:49,400
Speaker 1: married and her husband, it's two roth accounts then that

802
00:34:49,400 --> 00:34:53,040
Speaker 1: are able to be maxed out, which and the reality is,

803
00:34:53,360 --> 00:34:56,279
Speaker 1: given the trajectory of their income, they might not be

804
00:34:56,280 --> 00:34:58,000
Speaker 1: able to do it for a ton more years. So

805
00:34:58,280 --> 00:35:01,640
Speaker 1: trying to max those out while the sun shining, while

806
00:35:01,840 --> 00:35:03,879
Speaker 1: making hay while the sunshines make sense.

807
00:35:04,120 --> 00:35:05,759
Speaker 2: And so although there's a lot of leeway, there's a

808
00:35:05,800 --> 00:35:08,520
Speaker 2: lot more room within a four to one K. True,

809
00:35:08,640 --> 00:35:10,319
Speaker 2: just to say how much money that they're salking away

810
00:35:10,320 --> 00:35:12,359
Speaker 2: towards their four owing k is but I mean there

811
00:35:12,360 --> 00:35:14,640
Speaker 2: could be an additional twenty five thousand dollars easily that

812
00:35:14,640 --> 00:35:16,120
Speaker 2: they can suck into their four one k.

813
00:35:16,320 --> 00:35:18,480
Speaker 1: Which could mean that maybe there's a number of years

814
00:35:18,480 --> 00:35:19,839
Speaker 1: they have left to contribute to a roth hiray.

815
00:35:19,960 --> 00:35:22,000
Speaker 2: It it just depends, yes, And let's.

816
00:35:21,800 --> 00:35:24,520
Speaker 1: Mention this that unwinding contributions to a roth iray it's

817
00:35:24,520 --> 00:35:27,319
Speaker 1: not a terribly fun procedure. So it's best not to

818
00:35:27,360 --> 00:35:29,759
Speaker 1: contribute too much to begin with, if you can help it.

819
00:35:29,960 --> 00:35:32,719
Speaker 1: And so if it looks like you're definitely gonna make

820
00:35:32,800 --> 00:35:34,480
Speaker 1: quite a bit more, which is not a bad thing. Again,

821
00:35:34,520 --> 00:35:37,279
Speaker 1: but let's say, oh, man, instantaneous fifteen percent rays in

822
00:35:37,320 --> 00:35:39,239
Speaker 1: the beginning of twenty twenty four, which is going to

823
00:35:39,320 --> 00:35:43,200
Speaker 1: kick you out of roth IRA contribution eligibility even with

824
00:35:43,280 --> 00:35:47,640
Speaker 1: those additional pretax contributions you're considering making. Take a different route.

825
00:35:48,040 --> 00:35:49,840
Speaker 1: And by the way, you can always wait until you

826
00:35:49,880 --> 00:35:53,520
Speaker 1: get your income statements the following year, your W two's

827
00:35:53,600 --> 00:35:55,840
Speaker 1: or whatever to contribute if you aren't sure if you

828
00:35:55,920 --> 00:35:58,440
Speaker 1: qualify but don't want to unwind. So, Matt, you were saying,

829
00:35:58,840 --> 00:36:00,799
Speaker 1: do it you know, day one in the new year,

830
00:36:00,840 --> 00:36:02,600
Speaker 1: which I love that approach if you know you're going

831
00:36:02,680 --> 00:36:06,080
Speaker 1: to qualify, but if you instead keep that cash on

832
00:36:06,239 --> 00:36:09,000
Speaker 1: hand in savings and sticking in the following year once

833
00:36:09,040 --> 00:36:11,320
Speaker 1: you know you qualify, if you're concerned about whether or

834
00:36:11,320 --> 00:36:13,239
Speaker 1: not you're going to that can make sense too. That

835
00:36:13,280 --> 00:36:14,680
Speaker 1: can be a good way to do it, just so

836
00:36:14,719 --> 00:36:15,040
Speaker 1: you're not.

837
00:36:15,000 --> 00:36:18,000
Speaker 2: It's the way to keep things simple, exactly sure, and yeah,

838
00:36:18,200 --> 00:36:20,160
Speaker 2: it keeps things from getting super hairy, and it allows

839
00:36:20,200 --> 00:36:23,080
Speaker 2: you to know without a doubt that what you're doing

840
00:36:23,120 --> 00:36:25,200
Speaker 2: isn't something that you're going to have to recharacterize, which

841
00:36:25,200 --> 00:36:26,680
Speaker 2: involves a whole lot of math where you're trying to

842
00:36:26,680 --> 00:36:29,600
Speaker 2: figure out the taxes on what it is that you earned,

843
00:36:29,640 --> 00:36:32,080
Speaker 2: but not the amount that Yeah, it just gets a

844
00:36:32,120 --> 00:36:34,200
Speaker 2: little bit hairy. It's annoying. But like, what I don't

845
00:36:34,280 --> 00:36:36,320
Speaker 2: like about sitting on that money is the fact that

846
00:36:36,360 --> 00:36:40,439
Speaker 2: you're missing out on the potential gains for that entire

847
00:36:40,520 --> 00:36:43,520
Speaker 2: year because on average, the stock market goes up more

848
00:36:43,520 --> 00:36:46,680
Speaker 2: often than it goes down, basically three out of four years, right, Yeah,

849
00:36:46,719 --> 00:36:48,680
Speaker 2: which means that you could be missing out or like

850
00:36:49,000 --> 00:36:50,319
Speaker 2: you know, the S and P, Like you're looking at

851
00:36:50,360 --> 00:36:52,920
Speaker 2: eight ten percent if you're not counting inflation, but at

852
00:36:53,000 --> 00:36:55,080
Speaker 2: least you're in a five percent highld tavy's account now,

853
00:36:55,080 --> 00:36:57,759
Speaker 2: and that, honestly, that's the biggest It softens the blow

854
00:36:57,760 --> 00:37:00,680
Speaker 2: a little bit. It saves the day because instead of thinking, oh,

855
00:37:00,719 --> 00:37:03,440
Speaker 2: on this is not on six hundred plus dollars on

856
00:37:04,280 --> 00:37:06,720
Speaker 2: maxing out my wroth IRA, if you're thinking about ten percent,

857
00:37:06,760 --> 00:37:09,239
Speaker 2: it's like, well, actually it's you can kind of have

858
00:37:09,280 --> 00:37:12,200
Speaker 2: that because you're guaranteed at least five percent because that

859
00:37:12,239 --> 00:37:15,000
Speaker 2: money is sitting there within a HIGHYI old savings account.

860
00:37:15,480 --> 00:37:18,279
Speaker 2: And plus you've got the flexibility too off having that

861
00:37:18,320 --> 00:37:20,560
Speaker 2: money there and if something comes along it's pretty nice

862
00:37:20,560 --> 00:37:22,680
Speaker 2: to know that that's not money that you have to

863
00:37:22,760 --> 00:37:26,640
Speaker 2: then with take out of a wroth. We talk about

864
00:37:26,640 --> 00:37:28,760
Speaker 2: the contributions you make to a roth in the ability

865
00:37:28,760 --> 00:37:31,759
Speaker 2: that you can draw on those contributions, but were you

866
00:37:31,800 --> 00:37:33,399
Speaker 2: to do that, you can't put that money back in

867
00:37:33,440 --> 00:37:35,279
Speaker 2: that same year, right, Like, let's say you've got a

868
00:37:35,440 --> 00:37:39,520
Speaker 2: very dynamic financial situation. But if that money is just

869
00:37:39,520 --> 00:37:41,800
Speaker 2: sitting there in cash, well you've never made a contribution,

870
00:37:41,840 --> 00:37:44,600
Speaker 2: which means, oh, well you've never withdrawn this contributions, meaning

871
00:37:45,400 --> 00:37:47,879
Speaker 2: that or you to save that money back up again. Yes,

872
00:37:47,920 --> 00:37:50,680
Speaker 2: in fact, you would be able to contribute to your

873
00:37:50,680 --> 00:37:54,200
Speaker 2: wrath for that year. And is that confusing? Okay? And

874
00:37:54,239 --> 00:37:56,560
Speaker 2: I would say this cash equals of flexibility is what

875
00:37:56,600 --> 00:37:56,879
Speaker 2: I'm saying.

876
00:37:57,719 --> 00:37:59,600
Speaker 1: And you just have to make sure that you don't

877
00:37:59,680 --> 00:38:02,640
Speaker 1: just hiw to spend it instead of invest it. But

878
00:38:02,640 --> 00:38:04,520
Speaker 1: that doesn't sound like that's a problem, not for them,

879
00:38:04,600 --> 00:38:08,400
Speaker 1: for Brienna, and yeah, for their family. So the other

880
00:38:08,680 --> 00:38:10,440
Speaker 1: I think you can get into the weeds. There's a

881
00:38:10,440 --> 00:38:12,319
Speaker 1: whole lot we could talk about when it comes to

882
00:38:13,040 --> 00:38:15,720
Speaker 1: different ways to get to get access to wrath money,

883
00:38:15,719 --> 00:38:19,040
Speaker 1: ways to even enhance your ability to funnel money into

884
00:38:19,080 --> 00:38:22,560
Speaker 1: a WROTH account. But when we're talking again, I go

885
00:38:22,640 --> 00:38:25,960
Speaker 1: back to that basic solution, simplest is almost always best,

886
00:38:26,280 --> 00:38:30,080
Speaker 1: is Yeah, just funnel more into the pre tax accounts

887
00:38:30,080 --> 00:38:34,200
Speaker 1: like the HSA and the traditional formal one K, leaving

888
00:38:34,200 --> 00:38:36,680
Speaker 1: you open to continue to contribute to those roth iras

889
00:38:36,760 --> 00:38:39,879
Speaker 1: for hopefully years to come, or maybe not hopefully years

890
00:38:39,880 --> 00:38:41,719
Speaker 1: to come because maybe your income gross signima. That's what

891
00:38:41,719 --> 00:38:43,799
Speaker 1: I'm rooting for, actually, Matt, But at least for the

892
00:38:43,840 --> 00:38:44,920
Speaker 1: time being, that's what you can do.

893
00:38:45,040 --> 00:38:47,480
Speaker 2: Absolutely, and if you overly obsessed, I think with some

894
00:38:47,520 --> 00:38:50,279
Speaker 2: of these different maximizing strategies, I think it can keep

895
00:38:50,400 --> 00:38:53,440
Speaker 2: your sites from focusing on the things that are truly

896
00:38:53,440 --> 00:38:54,840
Speaker 2: going to be able to move the needle in a

897
00:38:54,960 --> 00:38:57,799
Speaker 2: much bigger way, whether that's, oh, man, we can use

898
00:38:57,840 --> 00:39:01,560
Speaker 2: this money now to improve our community, or oh we

899
00:39:01,600 --> 00:39:03,880
Speaker 2: could use this the start of business just some of

900
00:39:03,880 --> 00:39:06,400
Speaker 2: the different other goals that you might have, or.

901
00:39:06,400 --> 00:39:08,200
Speaker 1: Build nay you in the backyard and start being a

902
00:39:08,239 --> 00:39:08,960
Speaker 1: real semester.

903
00:39:09,160 --> 00:39:11,200
Speaker 2: Yes, Like, there are so many different paths you can take,

904
00:39:11,560 --> 00:39:14,279
Speaker 2: and that's what's it's kind of going back to what

905
00:39:14,280 --> 00:39:17,040
Speaker 2: we're saying about the advice that maybe more of our

906
00:39:17,080 --> 00:39:19,520
Speaker 2: mindset and how it is we thought about being frugal

907
00:39:20,000 --> 00:39:21,800
Speaker 2: in the early years of the show, but your priority

908
00:39:21,840 --> 00:39:24,400
Speaker 2: is and your goals change over time. And just because

909
00:39:24,840 --> 00:39:27,480
Speaker 2: right now, Rihanna, or maybe over the past few years

910
00:39:27,800 --> 00:39:30,200
Speaker 2: you have been investing at a particular clip, that doesn't

911
00:39:30,239 --> 00:39:32,160
Speaker 2: necessarily mean that that's what you're going to continue to

912
00:39:32,160 --> 00:39:36,600
Speaker 2: do moving forward, because you might have an awakening. Maybe yeah,

913
00:39:36,680 --> 00:39:38,400
Speaker 2: you and your husband become enlightened and all of a

914
00:39:38,400 --> 00:39:42,040
Speaker 2: sudden you're you're like, oh, we're gonna give all of

915
00:39:42,040 --> 00:39:43,279
Speaker 2: our money away. I don't know what it is. If

916
00:39:43,280 --> 00:39:44,839
Speaker 2: that happens, please reach back out and tell us how

917
00:39:44,840 --> 00:39:48,520
Speaker 2: to get there. Uh, but Rihanna, we hope that gets

918
00:39:48,600 --> 00:39:51,239
Speaker 2: y'all pointed in the right direction. And yes, do let it.

919
00:39:51,280 --> 00:39:52,480
Speaker 2: I thought you were gonna tell her to reach out

920
00:39:52,520 --> 00:39:55,160
Speaker 2: and send her have her send money or a way. Hey,

921
00:39:55,400 --> 00:39:57,640
Speaker 2: she does that enlightenment too, Matt. She does that. We'll

922
00:39:57,680 --> 00:40:00,920
Speaker 2: start some sort of foundation she can further the how

923
00:40:00,920 --> 00:40:02,960
Speaker 2: the money calls. That's good, but we've got more to

924
00:40:02,960 --> 00:40:06,080
Speaker 2: get to, including we're going to discuss whether or not FSAs,

925
00:40:06,080 --> 00:40:07,880
Speaker 2: whether they make a ton of sense, whether or not

926
00:40:07,920 --> 00:40:10,279
Speaker 2: they're worth it. We'll get to that plus more right

927
00:40:10,320 --> 00:40:10,759
Speaker 2: after this.

928
00:40:19,160 --> 00:40:21,520
Speaker 1: Hard man let's keep going in his open enrollment season.

929
00:40:21,600 --> 00:40:24,239
Speaker 1: So we do need to talk about FSAs because it's

930
00:40:24,280 --> 00:40:26,080
Speaker 1: how much do I contribute to my FSA is a

931
00:40:26,160 --> 00:40:27,759
Speaker 1: question on a lot of people's mind. We'll get to

932
00:40:27,760 --> 00:40:31,040
Speaker 1: that in one second, but first, let's take one about closing.

933
00:40:30,760 --> 00:40:31,520
Speaker 2: A bank account.

934
00:40:31,640 --> 00:40:35,240
Speaker 4: Hello, this is Molly from Indianapolis, Indiana, a long time listener.

935
00:40:35,560 --> 00:40:37,960
Speaker 4: I've taken your advice to dump the big bank in

936
00:40:38,000 --> 00:40:40,960
Speaker 4: favor of an online bank. I was planning to close

937
00:40:41,000 --> 00:40:43,560
Speaker 4: my big bank account and then I sell my credit report.

938
00:40:43,840 --> 00:40:46,120
Speaker 4: It's the banks that I've had since I was a teenager.

939
00:40:46,239 --> 00:40:49,160
Speaker 4: If I close my twenty year longest open account, will

940
00:40:49,200 --> 00:40:50,520
Speaker 4: that damage my credit score?

941
00:40:51,640 --> 00:40:54,560
Speaker 2: All right, Molly's talking about dishing her big old bank.

942
00:40:55,120 --> 00:40:57,960
Speaker 2: This is something we are all about. Molly. Of course,

943
00:40:58,040 --> 00:41:01,320
Speaker 2: not only do the big banks not their customer as well,

944
00:41:01,560 --> 00:41:05,120
Speaker 2: but they also don't offer competitive products and rates, despite

945
00:41:05,320 --> 00:41:08,759
Speaker 2: basically every other financial institution out there raising rates on

946
00:41:09,040 --> 00:41:12,680
Speaker 2: their savings and their CDs pretty significantly over the past year.

947
00:41:12,800 --> 00:41:15,680
Speaker 2: So the big banks they've opted to largely stay put,

948
00:41:16,000 --> 00:41:18,560
Speaker 2: and in an era of higher inflation, none of us

949
00:41:18,560 --> 00:41:21,600
Speaker 2: can afford to have our savings sitting completely idle like that,

950
00:41:22,320 --> 00:41:24,680
Speaker 2: going from what it is a big bank is offering,

951
00:41:24,760 --> 00:41:27,439
Speaker 2: like typically you're looking at like I think point one

952
00:41:27,680 --> 00:41:30,960
Speaker 2: two point oh four percent to the five plus range

953
00:41:31,440 --> 00:41:33,759
Speaker 2: is going to be a massive one, especially if you're

954
00:41:34,880 --> 00:41:37,800
Speaker 2: the amount that you've got set aside in your emergency

955
00:41:37,800 --> 00:41:40,080
Speaker 2: fund is pretty large. If you're sitting on three to

956
00:41:40,120 --> 00:41:42,400
Speaker 2: six months worth of living expenses. The ability for you

957
00:41:42,480 --> 00:41:44,759
Speaker 2: to earn a solid five percent on that is what

958
00:41:44,800 --> 00:41:45,719
Speaker 2: we want to see folks doing.

959
00:41:45,760 --> 00:41:48,040
Speaker 1: Matt, you remember that song, I don't want no scrubs.

960
00:41:48,480 --> 00:41:50,239
Speaker 1: I don't want no big banks. Okay, that's what I

961
00:41:50,280 --> 00:41:53,120
Speaker 1: don't want. And so I just like that Molly's asking

962
00:41:53,120 --> 00:41:54,879
Speaker 1: this question. I don't want her to have any big

963
00:41:54,880 --> 00:41:57,200
Speaker 1: banks in her life either. No scrubs, no big banks.

964
00:41:57,520 --> 00:41:59,880
Speaker 1: So when it comes to your question, the long and

965
00:41:59,880 --> 00:42:01,719
Speaker 1: the the short of it is, basically the answer is no.

966
00:42:02,120 --> 00:42:04,720
Speaker 1: We talked about some of the annoyances of the credit

967
00:42:04,719 --> 00:42:07,319
Speaker 1: score industry in the past Friday Flight. Actually we talked

968
00:42:07,320 --> 00:42:11,080
Speaker 1: about the big banks sucking too, because that's a repeat

969
00:42:11,120 --> 00:42:13,200
Speaker 1: leame here on how to money, But your bank account

970
00:42:13,239 --> 00:42:15,319
Speaker 1: and how long you've had it has nothing to do

971
00:42:15,480 --> 00:42:18,520
Speaker 1: with that all important three digit score. You mentioned that

972
00:42:18,560 --> 00:42:21,480
Speaker 1: you looked at your credit reports, and I wonder if

973
00:42:21,520 --> 00:42:23,239
Speaker 1: you also have maybe a credit card from your big

974
00:42:23,239 --> 00:42:25,520
Speaker 1: bank or something like that, because your actual savings or

975
00:42:25,600 --> 00:42:28,040
Speaker 1: checking account, right, you know, maybe one that you've had

976
00:42:28,080 --> 00:42:31,560
Speaker 1: even for decades, it doesn't get reported to the credit bureaus.

977
00:42:31,560 --> 00:42:34,280
Speaker 1: So I would say, look over that credit report again

978
00:42:34,480 --> 00:42:40,000
Speaker 1: and see. But typically those accounts don't get reported to

979
00:42:40,080 --> 00:42:42,399
Speaker 1: the bureaus because they don't really have anything to do

980
00:42:42,560 --> 00:42:44,279
Speaker 1: with the makeup of your credit score.

981
00:42:44,320 --> 00:42:47,600
Speaker 2: Yeah, that's right. The length of your credit history that

982
00:42:47,760 --> 00:42:50,560
Speaker 2: has a real impact on your overall credit score. That

983
00:42:50,680 --> 00:42:53,120
Speaker 2: is why we typically don't advise that folks close a

984
00:42:53,239 --> 00:42:55,359
Speaker 2: credit card that they've had for a long time. It's

985
00:42:55,400 --> 00:42:57,600
Speaker 2: better to just use it rarely, hang on to that thing,

986
00:42:57,880 --> 00:43:00,520
Speaker 2: use it rarely, and then pay off the balance on time,

987
00:43:00,840 --> 00:43:03,480
Speaker 2: and there's just rarely a need to ditch it all together.

988
00:43:03,840 --> 00:43:06,120
Speaker 2: I would I guess if it's a card that you're

989
00:43:06,160 --> 00:43:08,080
Speaker 2: not taking full advantage of and they have an annual fee,

990
00:43:08,160 --> 00:43:09,680
Speaker 2: that's a good reason actually to ditch it.

991
00:43:09,719 --> 00:43:11,399
Speaker 1: Well, but even then you can call up the credit

992
00:43:11,400 --> 00:43:13,400
Speaker 1: card issuer and maybe get them to engage you to

993
00:43:13,440 --> 00:43:15,000
Speaker 1: a card that doesn't have an annual fee, and you

994
00:43:15,040 --> 00:43:16,799
Speaker 1: get to keep the credit history, and the same time you.

995
00:43:16,760 --> 00:43:19,440
Speaker 2: Can get away. Perhaps, but you should feel free to

996
00:43:19,480 --> 00:43:22,799
Speaker 2: move on and open a superior bank account with another bank,

997
00:43:22,840 --> 00:43:26,680
Speaker 2: because there's no connection between that savings account, that bank account,

998
00:43:26,719 --> 00:43:29,600
Speaker 2: and your credit score. And it's easier to switch banks

999
00:43:29,600 --> 00:43:33,320
Speaker 2: than the most Most folks actually think it's not easy necessarily,

1000
00:43:33,320 --> 00:43:35,120
Speaker 2: but we do think it's worth it, and like we've

1001
00:43:35,120 --> 00:43:38,320
Speaker 2: mentioned recently, hopefully it'll get even easier in the future,

1002
00:43:38,320 --> 00:43:40,640
Speaker 2: where there are some standards that allow for folks to

1003
00:43:40,920 --> 00:43:43,320
Speaker 2: quickly migrate from one bank to the other. Woun't be nice,

1004
00:43:43,520 --> 00:43:46,360
Speaker 2: even though the banks they've got zero reason to actually

1005
00:43:46,520 --> 00:43:48,680
Speaker 2: want to be able to provide that service for their customers.

1006
00:43:48,680 --> 00:43:49,200
Speaker 2: They want to.

1007
00:43:49,200 --> 00:43:51,120
Speaker 1: They just want to make it just a little more annoying,

1008
00:43:51,160 --> 00:43:53,719
Speaker 1: a little more painstaking. And if we can, if we

1009
00:43:53,760 --> 00:43:56,360
Speaker 1: can just implement some rules that make it simpler for

1010
00:43:56,440 --> 00:43:58,320
Speaker 1: individuals to do that so they don't have to spend

1011
00:43:58,400 --> 00:44:02,080
Speaker 1: like a weekend and and the subsequent weeks ensuring that

1012
00:44:02,120 --> 00:44:05,000
Speaker 1: everything gets transferred properly, that would be a big help.

1013
00:44:05,000 --> 00:44:06,600
Speaker 1: I think people would be more likely it would grease

1014
00:44:06,640 --> 00:44:09,480
Speaker 1: the wheels of that decision. And it's probably important to

1015
00:44:09,480 --> 00:44:12,640
Speaker 1: mention that the only way switching banks can negatively impact

1016
00:44:12,640 --> 00:44:15,200
Speaker 1: your credit is if you were to close the account

1017
00:44:15,520 --> 00:44:18,200
Speaker 1: your bank account with a negative balance, right, or if

1018
00:44:18,200 --> 00:44:20,360
Speaker 1: you don't maybe switch over any of those auto payments,

1019
00:44:20,400 --> 00:44:22,840
Speaker 1: then one of the payments doesn't get made and so boom.

1020
00:44:22,880 --> 00:44:26,320
Speaker 1: Then that non payment or late payment impacts your credit score.

1021
00:44:26,520 --> 00:44:28,960
Speaker 1: So like that is what's going to get reported to

1022
00:44:28,960 --> 00:44:32,320
Speaker 1: the bureaus, not the actual closure of the account itself.

1023
00:44:32,640 --> 00:44:35,000
Speaker 1: So that's the biggest risk here. Make sure to switch

1024
00:44:35,040 --> 00:44:37,360
Speaker 1: those automatic transactions like a credit card payment or a

1025
00:44:37,400 --> 00:44:39,360
Speaker 1: mortgage payment from the old bank to the new one

1026
00:44:39,480 --> 00:44:42,120
Speaker 1: before you close the account all the way. But other

1027
00:44:42,200 --> 00:44:45,000
Speaker 1: than that should be no harm, no foul, no problem,

1028
00:44:45,239 --> 00:44:47,280
Speaker 1: and your credit score should be none the wiser.

1029
00:44:47,480 --> 00:44:49,759
Speaker 2: That's right. And Molly didn't say specifically where it was

1030
00:44:49,760 --> 00:44:53,080
Speaker 2: that she was getting her credit report, but make sure

1031
00:44:53,239 --> 00:44:56,200
Speaker 2: that you are going to annual credit report dot com,

1032
00:44:56,239 --> 00:44:59,719
Speaker 2: not like free credit report dot Com, which I'm pretty

1033
00:44:59,760 --> 00:45:03,719
Speaker 2: sure it sounds like something that you should be hitting

1034
00:45:03,800 --> 00:45:06,920
Speaker 2: up right. No, I think they're associated with experience. Yeah,

1035
00:45:06,960 --> 00:45:08,600
Speaker 2: I was gonna probably run by one of the bureaus.

1036
00:45:08,600 --> 00:45:10,080
Speaker 2: One of the bureaus. They're probably trying to charge you,

1037
00:45:10,480 --> 00:45:12,480
Speaker 2: charge you, but you can get for free. So Annual

1038
00:45:12,520 --> 00:45:14,680
Speaker 2: Credit Report dot Com is where you can go not

1039
00:45:14,719 --> 00:45:18,000
Speaker 2: only annually but weekly right now, yeah, ever since the pandemic.

1040
00:45:18,000 --> 00:45:20,600
Speaker 1: And that is a federally guaranteed free credit report. So

1041
00:45:20,640 --> 00:45:22,160
Speaker 1: a lot of people might say, oh, I'll just go

1042
00:45:22,200 --> 00:45:25,080
Speaker 1: to the bureaus themselves. No, no, no, go to the website.

1043
00:45:25,120 --> 00:45:27,359
Speaker 1: It's been set up by the federal government to give

1044
00:45:27,360 --> 00:45:28,919
Speaker 1: you access to your credit report for free.

1045
00:45:28,920 --> 00:45:31,840
Speaker 2: They should change it to weekly Credit Report dot com.

1046
00:45:32,000 --> 00:45:34,520
Speaker 2: But I don't actually know who's on who has that R.

1047
00:45:34,719 --> 00:45:37,200
Speaker 2: We should buy it, and we should just forge people

1048
00:45:37,200 --> 00:45:40,200
Speaker 2: to Annual Credit report dot com if it's available. We'll

1049
00:45:40,200 --> 00:45:41,680
Speaker 2: do that for ten dollars or less. I will do

1050
00:45:41,719 --> 00:45:44,040
Speaker 2: that's right after we finished recording and check out Go

1051
00:45:44,120 --> 00:45:46,359
Speaker 2: Daddy or wherever you buy fine domain names. All right,

1052
00:45:46,400 --> 00:45:48,759
Speaker 2: it is time for our Facebook question of the Week.

1053
00:45:48,800 --> 00:45:52,760
Speaker 2: This one's from Katie and she says it's open enrollment

1054
00:45:52,800 --> 00:45:55,880
Speaker 2: time and my employer offers a flexible spending account for healthcare.

1055
00:45:56,360 --> 00:45:59,920
Speaker 2: Well it sounds well, it sounds similar to a hell

1056
00:46:00,239 --> 00:46:02,360
Speaker 2: savings account. It is very different in that there's a

1057
00:46:02,360 --> 00:46:06,160
Speaker 2: limited rollover and no investment option. That's right. I can

1058
00:46:06,160 --> 00:46:08,520
Speaker 2: contribute up to thirty five hundred dollars a year, but

1059
00:46:08,560 --> 00:46:10,920
Speaker 2: those funds can only be used for health care costs

1060
00:46:10,960 --> 00:46:13,200
Speaker 2: incurred in the calendar year and claims must be submitted

1061
00:46:13,239 --> 00:46:15,880
Speaker 2: by April fifteenth the following year. There's a small amount

1062
00:46:16,040 --> 00:46:19,000
Speaker 2: six hundred dollars that can be rolled over, but other

1063
00:46:19,080 --> 00:46:23,239
Speaker 2: than that, any funds not used are forfeited. The only

1064
00:46:23,239 --> 00:46:25,600
Speaker 2: benefits I see to this type of account are that

1065
00:46:25,640 --> 00:46:28,239
Speaker 2: the funds come out of my paycheck pre tax and

1066
00:46:28,239 --> 00:46:31,319
Speaker 2: when to lower my AGI. That is true, yep. The

1067
00:46:31,320 --> 00:46:33,960
Speaker 2: downside is having to keep track of the expenses and

1068
00:46:33,960 --> 00:46:37,239
Speaker 2: submit the claims and forfeiting money if we don't use

1069
00:46:37,280 --> 00:46:39,759
Speaker 2: it all. We had a bad medical year this year

1070
00:46:39,800 --> 00:46:42,120
Speaker 2: and we spent far more than thirty five hundred dollars

1071
00:46:42,160 --> 00:46:45,000
Speaker 2: out of pocket. My son had an unexpected surgery, but

1072
00:46:45,040 --> 00:46:47,480
Speaker 2: I'm not sure that would happen in a quote unquote

1073
00:46:47,719 --> 00:46:52,200
Speaker 2: normal year. Thoughts on this type of account. Let's talk

1074
00:46:52,239 --> 00:46:54,200
Speaker 2: about the flexible spending account well.

1075
00:46:54,080 --> 00:46:55,960
Speaker 1: As always in the hod of money Facebook group, which

1076
00:46:55,960 --> 00:46:57,800
Speaker 1: if you're not a member of you should join because

1077
00:46:57,840 --> 00:46:59,759
Speaker 1: there's awesome folks in there helping each other out. It's

1078
00:46:59,760 --> 00:47:02,080
Speaker 1: one of the only same places on the Internet. I

1079
00:47:02,120 --> 00:47:05,120
Speaker 1: can vouch for that, And so there was a lot

1080
00:47:05,120 --> 00:47:09,839
Speaker 1: of good advice from fellow listeners, fellow readers up on

1081
00:47:09,840 --> 00:47:13,200
Speaker 1: that Facebook post, on Katie's post. But we talk about

1082
00:47:13,560 --> 00:47:16,960
Speaker 1: HSA's pretty regularly. But but we don't talk as much

1083
00:47:17,000 --> 00:47:19,600
Speaker 1: about fessas. The reason we talk about HSA's with regularity

1084
00:47:19,680 --> 00:47:22,080
Speaker 1: is because there's such an underutilized resource when it comes

1085
00:47:22,120 --> 00:47:25,040
Speaker 1: to saving for retirement and avoiding as much tax as possible.

1086
00:47:25,320 --> 00:47:28,279
Speaker 1: They're actually quite flexible in a lot of ways too, Yeah,

1087
00:47:28,360 --> 00:47:30,520
Speaker 1: because you can take those funds out two years later,

1088
00:47:30,560 --> 00:47:31,319
Speaker 1: twenty years later.

1089
00:47:31,680 --> 00:47:34,239
Speaker 2: It's really up to you two hundred years later. Yeah,

1090
00:47:34,280 --> 00:47:34,640
Speaker 2: if you're.

1091
00:47:34,520 --> 00:47:35,880
Speaker 1: Playing on living that long, you feel like one of

1092
00:47:35,880 --> 00:47:38,320
Speaker 1: those Silicon Valley You've been hacking your body type folks.

1093
00:47:38,440 --> 00:47:41,080
Speaker 1: You can do that. The most annoying part, though, is

1094
00:47:41,120 --> 00:47:42,960
Speaker 1: probably the receipt keeping that you got to do in

1095
00:47:43,040 --> 00:47:45,680
Speaker 1: order to maximize the value of that account. But Matt,

1096
00:47:45,719 --> 00:47:48,520
Speaker 1: we don't talk about fessays as much, and especially this

1097
00:47:48,600 --> 00:47:51,720
Speaker 1: time of year, we really should because they're an account

1098
00:47:51,760 --> 00:47:53,560
Speaker 1: that so many people have access to. They don't have

1099
00:47:53,960 --> 00:47:58,080
Speaker 1: the same long term retirement investment upside, but they do

1100
00:47:58,160 --> 00:48:01,640
Speaker 1: have some tax saving ability for a lot of people

1101
00:48:02,160 --> 00:48:03,839
Speaker 1: in basically the upcoming year.

1102
00:48:03,920 --> 00:48:06,960
Speaker 2: That's right. Yeah, So there are two types of fssays

1103
00:48:07,080 --> 00:48:10,920
Speaker 2: flexible spending accounts. There are the dependent care fessays and

1104
00:48:10,960 --> 00:48:14,840
Speaker 2: then the healthcare fessays. And the dependent care one is

1105
00:48:14,880 --> 00:48:17,080
Speaker 2: it's more of a slam dunk, even though you're avoiding

1106
00:48:17,120 --> 00:48:19,640
Speaker 2: income tax on the money that you funnel into either

1107
00:48:19,719 --> 00:48:21,520
Speaker 2: of these accounts. The reason we like the dependent care

1108
00:48:21,600 --> 00:48:25,200
Speaker 2: version more is because those expenses are honestly, they're just

1109
00:48:25,200 --> 00:48:27,680
Speaker 2: so much easier to predict, right, Like, you know that,

1110
00:48:27,719 --> 00:48:29,959
Speaker 2: all right, this is how much daycare is going to cost.

1111
00:48:30,239 --> 00:48:32,600
Speaker 1: You're not like, wait a second, I randomly we grab

1112
00:48:32,640 --> 00:48:34,040
Speaker 1: a four year old and now have to pay for

1113
00:48:34,080 --> 00:48:34,839
Speaker 1: their childcare costs.

1114
00:48:34,880 --> 00:48:36,359
Speaker 2: Usually you know that going into the year. Yeah, you're

1115
00:48:36,360 --> 00:48:38,600
Speaker 2: looking at the year. You know what your month monthly

1116
00:48:38,600 --> 00:48:40,360
Speaker 2: amount is going to be as opposed to some of

1117
00:48:40,400 --> 00:48:44,080
Speaker 2: the different medical needs. I guess that might arise during

1118
00:48:44,080 --> 00:48:46,080
Speaker 2: the year. Obviously, you can't do this like with one

1119
00:48:46,160 --> 00:48:48,719
Speaker 2: hundred percent accuracy, but if you got young kids, if

1120
00:48:48,760 --> 00:48:50,960
Speaker 2: you work full time, chances are you can max that

1121
00:48:51,000 --> 00:48:54,240
Speaker 2: out pretty easily given the cost of childcare these days.

1122
00:48:54,480 --> 00:48:57,920
Speaker 2: But with a healthcare fessay, if you have significant ongoing

1123
00:48:57,960 --> 00:49:00,759
Speaker 2: health care needs, then yes, you likely will be able

1124
00:49:00,760 --> 00:49:03,600
Speaker 2: to max out that FSA as well without having to

1125
00:49:03,680 --> 00:49:05,880
Speaker 2: fear that you're going to lose any of those dollars.

1126
00:49:06,520 --> 00:49:09,279
Speaker 2: But the problem that I think Katie finds herself in

1127
00:49:09,440 --> 00:49:11,759
Speaker 2: is that her and her family there's not a slam

1128
00:49:11,840 --> 00:49:13,640
Speaker 2: dunk on one side or the other, right, Like you're

1129
00:49:13,960 --> 00:49:16,279
Speaker 2: You're kind of in that messy middle where you kind

1130
00:49:16,280 --> 00:49:18,400
Speaker 2: of have to got to predict the future. Essentially, you

1131
00:49:18,440 --> 00:49:20,480
Speaker 2: got to forecast a little bit and try to determine

1132
00:49:20,480 --> 00:49:21,880
Speaker 2: whether or not this is going to make sense for you.

1133
00:49:21,920 --> 00:49:23,440
Speaker 1: Sure, and I would go to a palm reader, yeah,

1134
00:49:23,640 --> 00:49:25,320
Speaker 1: is what I would say, and say what I prefer,

1135
00:49:25,360 --> 00:49:27,920
Speaker 1: Tarot cards? Yeah, yeah, yeah, either way, whatever your preference.

1136
00:49:28,080 --> 00:49:30,960
Speaker 1: Bring all your family members and have them read your

1137
00:49:30,960 --> 00:49:33,239
Speaker 1: future so that they can determine what your health care

1138
00:49:33,239 --> 00:49:35,439
Speaker 1: costs are going to be next year. But it's really

1139
00:49:35,480 --> 00:49:37,080
Speaker 1: hard to figure out how much to contribute. Matt, you

1140
00:49:37,239 --> 00:49:38,799
Speaker 1: mentioned messi middle, and I think that's a good way

1141
00:49:38,840 --> 00:49:41,799
Speaker 1: to describe it. And Katie highlighted a lot of the

1142
00:49:41,840 --> 00:49:44,520
Speaker 1: problems with FSA accounts in general in her post, right,

1143
00:49:44,520 --> 00:49:46,680
Speaker 1: they use it or lose it nature can cause people

1144
00:49:46,719 --> 00:49:48,839
Speaker 1: to avoid these accounts altogether because they're like, I don't

1145
00:49:48,840 --> 00:49:53,040
Speaker 1: want to stick money in that. I'm actually just funneling

1146
00:49:53,120 --> 00:49:56,120
Speaker 1: down the toilet. Because there's a certain amount six hundred

1147
00:49:56,120 --> 00:49:58,600
Speaker 1: bucks ish that you can roll over every single year,

1148
00:49:58,640 --> 00:50:00,799
Speaker 1: which which means that putting in it that amount makes

1149
00:50:00,840 --> 00:50:03,480
Speaker 1: a lot of sense, especially especially given the list of

1150
00:50:03,480 --> 00:50:06,120
Speaker 1: items that qualify as FSA expenses, which is an important

1151
00:50:06,120 --> 00:50:10,280
Speaker 1: thing to mention, tampon, sunscreen, vitamins, over the counter medications.

1152
00:50:10,560 --> 00:50:12,239
Speaker 1: Look at the list of things that qualify because it

1153
00:50:12,320 --> 00:50:14,839
Speaker 1: is a wide list, and so make sure that you're

1154
00:50:14,840 --> 00:50:20,080
Speaker 1: filing those reimbursements to get essentially those purchases tax free.

1155
00:50:20,239 --> 00:50:23,600
Speaker 1: And Katie highlighted the annoyance also of tracking and submitting.

1156
00:50:23,760 --> 00:50:26,560
Speaker 1: She's not wrong, but that part is also true of hsas.

1157
00:50:26,719 --> 00:50:27,359
Speaker 2: But I guess the.

1158
00:50:27,320 --> 00:50:29,719
Speaker 1: Reality is that to get the tax benefit, you got

1159
00:50:29,719 --> 00:50:32,520
Speaker 1: to follow the arcane rules. And some employers though even

1160
00:50:32,560 --> 00:50:35,640
Speaker 1: offer like an FSA specific debit card, so instead of

1161
00:50:35,719 --> 00:50:37,440
Speaker 1: having to submit for all that stuff too, you just

1162
00:50:37,480 --> 00:50:39,959
Speaker 1: make the purchase, whether you're paying at the doctor's office,

1163
00:50:40,040 --> 00:50:43,239
Speaker 1: or whether you're at FSA store dot Com or Amazon's

1164
00:50:43,280 --> 00:50:46,239
Speaker 1: FSA store, or you're literally at Walgreens or whatever, using

1165
00:50:46,239 --> 00:50:48,520
Speaker 1: that debit card to make the purchase is one way

1166
00:50:48,560 --> 00:50:50,080
Speaker 1: that it at least takes some of the paperworkout. I'm

1167
00:50:50,120 --> 00:50:52,200
Speaker 1: sure if your employer offers that, but it's worth asking.

1168
00:50:52,040 --> 00:50:54,480
Speaker 2: Totally, Katie. I think our ultimate advice would be the

1169
00:50:54,520 --> 00:50:57,360
Speaker 2: tread Ford conservatively, because it sounds like the major reason

1170
00:50:57,719 --> 00:51:00,080
Speaker 2: that you had higher medical expenses last year was to

1171
00:51:00,160 --> 00:51:03,320
Speaker 2: be more of a fluke accident, and so avoiding tax

1172
00:51:03,400 --> 00:51:05,480
Speaker 2: for healthcare expenses is a great thing to shoot for.

1173
00:51:05,560 --> 00:51:07,680
Speaker 2: But we don't want you to be so focused on

1174
00:51:07,920 --> 00:51:12,000
Speaker 2: avoiding taxation on your income that you potentially lose those

1175
00:51:12,040 --> 00:51:13,920
Speaker 2: dollars or have to buy a bunch of some of

1176
00:51:14,000 --> 00:51:16,040
Speaker 2: you know, those raindom items at the end of the

1177
00:51:16,080 --> 00:51:18,520
Speaker 2: year to ensure that it doesn't just vanish. Well, I

1178
00:51:18,520 --> 00:51:21,440
Speaker 2: guess then you could give away sunscreen for Halloween next year.

1179
00:51:21,520 --> 00:51:23,400
Speaker 2: You can always do that. But by the way, this

1180
00:51:23,480 --> 00:51:26,080
Speaker 2: is a good reminder though, for folks who do have

1181
00:51:26,120 --> 00:51:28,239
Speaker 2: a healthcare FSA to go ahead and look at their

1182
00:51:28,239 --> 00:51:30,320
Speaker 2: accounts right now. Maybe this is something that you forgot

1183
00:51:30,840 --> 00:51:33,520
Speaker 2: was accruing dollars that this is something that you were

1184
00:51:33,560 --> 00:51:36,080
Speaker 2: applying money towards, and you've got to balance there. And

1185
00:51:36,160 --> 00:51:38,000
Speaker 2: if you've got money that's not going to roll over

1186
00:51:38,040 --> 00:51:40,040
Speaker 2: for next year, make sure you get your hands on

1187
00:51:40,080 --> 00:51:43,120
Speaker 2: actual goods that you can roll over, yeah, physically to

1188
00:51:43,160 --> 00:51:45,520
Speaker 2: next year. Good for you for being healthy as an ox,

1189
00:51:45,640 --> 00:51:47,840
Speaker 2: but find a way to utilize those dollars. Know that

1190
00:51:47,840 --> 00:51:49,359
Speaker 2: you can roll over some of them, or at least

1191
00:51:49,400 --> 00:51:52,839
Speaker 2: check your employers' guidelines. But then do something, you know,

1192
00:51:53,360 --> 00:51:55,439
Speaker 2: use use those FSA dollars so you don't lose them.

1193
00:51:55,480 --> 00:51:57,920
Speaker 2: Absolutely right, Let's get back to the beer. Yeah, the

1194
00:51:58,000 --> 00:52:02,600
Speaker 2: blood orange double wit biponder donated to the show by Bob.

1195
00:52:02,680 --> 00:52:03,880
Speaker 2: What we your thoughts on this one? All right?

1196
00:52:03,920 --> 00:52:06,360
Speaker 1: So this was a healthy dose of blood orange, and

1197
00:52:06,400 --> 00:52:08,600
Speaker 1: this is a double wit, not just a wit. So

1198
00:52:08,680 --> 00:52:11,880
Speaker 1: it felt extra intense. I almost like could taste the

1199
00:52:11,960 --> 00:52:12,600
Speaker 1: alcohol in it.

1200
00:52:12,640 --> 00:52:14,439
Speaker 2: I don't know if you really that same thing. Yeah,

1201
00:52:14,640 --> 00:52:16,080
Speaker 2: normally isn't a great thing.

1202
00:52:16,280 --> 00:52:18,600
Speaker 1: Yeah, And honestly it felt a bit abrasive to me,

1203
00:52:18,640 --> 00:52:21,480
Speaker 1: it felt, but I at least it had a strong

1204
00:52:21,560 --> 00:52:23,920
Speaker 1: blood orange presence, which is actually one one of my

1205
00:52:23,960 --> 00:52:24,520
Speaker 1: favorite fruits.

1206
00:52:24,560 --> 00:52:25,200
Speaker 2: To put in a beer.

1207
00:52:25,239 --> 00:52:29,920
Speaker 1: I second probably to raspberries and strawberries, but blood orange.

1208
00:52:29,640 --> 00:52:31,200
Speaker 2: Is always a good addition to beer. When it comes

1209
00:52:31,200 --> 00:52:32,640
Speaker 2: to blood orange, I think I just have a hard

1210
00:52:32,680 --> 00:52:36,200
Speaker 2: time not thinking that I'm tasting my busted lip, you know,

1211
00:52:37,200 --> 00:52:39,680
Speaker 2: just because it says blood orange in it. It's hard

1212
00:52:39,680 --> 00:52:42,399
Speaker 2: to get past the marketing and the language of hey,

1213
00:52:42,640 --> 00:52:45,920
Speaker 2: blood orange, and it tastes like I'm sucking on pennies

1214
00:52:46,800 --> 00:52:49,480
Speaker 2: or nickels. But I totally agree with what you're saying.

1215
00:52:49,480 --> 00:52:52,000
Speaker 2: With this being a double wit. It packed a little

1216
00:52:52,000 --> 00:52:54,960
Speaker 2: more punch and it kind of had like a like

1217
00:52:55,000 --> 00:52:58,279
Speaker 2: Belgian strong ale sort of vibes going on. But it

1218
00:52:58,360 --> 00:53:00,200
Speaker 2: certainly you had some fruity notes in a dish to

1219
00:53:00,239 --> 00:53:02,120
Speaker 2: the blood orange, Like I felt like I was picking

1220
00:53:02,160 --> 00:53:04,840
Speaker 2: up on some of those banana esters as well. But

1221
00:53:05,400 --> 00:53:07,920
Speaker 2: some fruity this going on certainly was enjoyable. And we

1222
00:53:07,960 --> 00:53:10,600
Speaker 2: are incredibly thankful for you, Bob for sending this one

1223
00:53:10,600 --> 00:53:10,920
Speaker 2: our way.

1224
00:53:10,960 --> 00:53:12,920
Speaker 1: Appreciate you, Bob. Yeah, all right, Math, that's gonna do

1225
00:53:12,920 --> 00:53:15,520
Speaker 1: it for this episode. We'll have show notes and links

1226
00:53:15,560 --> 00:53:18,160
Speaker 1: to some of the things we mentioned in this episode

1227
00:53:18,440 --> 00:53:20,520
Speaker 1: up on our website at Howdymoney dot com.

1228
00:53:20,560 --> 00:53:23,600
Speaker 2: Yes, right buddy, So until next time, best friends out,

1229
00:53:23,719 --> 00:53:25,400
Speaker 2: Best friends out,