April 17, 2020 • 25 mins
Friday episodes are all about the Great Lockdown and your money. There’s a lot of news and information out there, but we are distilling that down to specific takeaways that will allow you to weather this surreal health and financial crisis. In today’s timely episode we cover a lot of good news we’ve come across in the past week. We also take a look at the changes we’ve seen to consumer spending, energy use as an indicator of what’s going on with the economy, and our thoughts on the housing market.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How the Money. I'm Joel and I and Matt.
Today we're discussing the great lockdown effects on spending and
the housing market. That's right, buddy. We're going to dive
(00:27):
into some changes to our spending, the spending that the
country is doing as a whole. Right, it's it's changed dramatically.
We're gonna talk about that. We're gonna take a couple
of listener questions later on as well, including one that's
gonna address the housing market. You know, like spring is
typically a pretty hot time for housing, but that is
not the case this year. And uh, I think we
all know why. So yeah, the virus which need not
(00:50):
be named. That's right. Well, you've been listening to Harry Potter.
Which book are you on? By the way, I'm waiting
for my local library to give me the audio book
of book seven. I'll be done. Oh my gosh, So
you just finished six six so good? It's so good,
pretty brutal at the end. Yeah, man, Yeah, I'm loving,
loving that series. And the guy who does the voice
(01:11):
narration for the Harry Potter books is incredible. He really is.
Jim Dale. Yeah, Kayt and eyes relationship when we first
started dating was we were long distance, and so we
both associate Harry Potter with our early months and years
of dating because as we would drive to the different
cities to visit each other, we would both listen to
Harry Potter, and so, yeah, it kind of has a
(01:33):
spot in our heart in our relationship there at the beginning.
But yes, the virus that shall not be named the
Great Lockdown, it seems like it's what this is being called.
Now we're in week five, man, how how are you
guys holding up? We're doing pretty good. Yeah, still pretty good.
I think the getting back to school thing is taking
a little bit more of a toll on the family,
on the kids, trying to kind of get into that
(01:53):
more regular school day. It just feels weird trying to
do it from home. But we're doing our best well.
In particular our school, a school that we sent our
oldest girls too, they've basically launched phase three of that
home learning right and they've gotten way more serious and
it's a lot harder. Right. Exactly before it was like
let's review some stuff and you know what, do some
related arts of your own, and now it's now we're
(02:14):
gonna do school for real. Yeah, it's it's legits. It's
a lot more pressure on our wives since they're the
ones taking care of the kid as at home while
you and I continue to work. We both have stay
at home mama's holding down the fort. We're incredibly thankful
for them, but it is not easy. Yeah, they do
the hard work around here, that's for sure, absolutely, man.
But first we gotta get to the good news, all right.
That's what we try to start off each of these
episodes with, is some good news of what's happening out there,
(02:38):
even in the midst of health and economic turmoil. So
we have the first item of good news we wanted
to mention is stimulus checks. We just talked about these
on Wednesday, Matt, and they are showing up in people's accounts.
They actually started showing up it seems like either earlier
this week or potentially late last week from what I'm
hearing from people in their bank accounts. And that's great. Right,
We have a listener question about the stimulus checks, so
(02:59):
we're gonna get to later in the episode, but I
wanted to ask you, have you received yours yet? Heck, yeah, dude,
it showed up earlier this week on April fift that
was the date that they were targeting. I made a
point to check it that morning because that is the
date that Secretary minutein Treasury Secretary that's the that's the
date that they were gunning for, and he was saying
that eighty million folks should have checks in their accounts
(03:20):
by that date with a direct deposit. So, um, yeah,
we were one of those folks that got our payment
right on time, which was nice, honestly, and it was
a little surprising to show up like that. I still
have him received mine and I logged into the IRS
website to kind of check and see the status. I
believe mine said that the I r S had not
determined my eligibility yet, and I think that might freak
some people out if they know they're eligible and they
get that response when they log in. Don't get freaked out.
(03:42):
I think it is them trying to process just so
many payments in such a short amount of time. If
you qualify right, if you make under that adjusted gross income,
which means you're actually going to get some sort of
a payout, you will get it. Just be patient. I
think we're going to see more payments, hopefully next week
in the following week and hopefully before too long we
all get that money. I know, um, for a lot
(04:03):
of people, it's more of a need, and so I
hate that people are having to wait, that anybody is
having to wait. But it is certainly good news that
a lot of Americans are getting that money, and they're
getting it now. Yeah, and and this is just speculation,
but you just filed your taxes right, your your twenty
nineteen taxically, just like a week and a half ago. Yeah.
I suspect this isn't at all confirmed anywhere, but I
(04:23):
think that folks who have filed their taxes recently, it
might be slightly slower, slightly delayed, as the I R S,
as the federal government is looking at the most recent
return that has been filed. If you haven't filed your
taxes yet, because you have until July fift you automatically
get qualified based on your twenty eighteen taxes. But once
you do file your twenty nineteen tax return, that is
(04:44):
the return that they based your eligibility on. And so
with it showing up, you know, I guess more recently.
I don't know. I'm thinking it might delay things slightly.
Plus you're all about the snail mail. I know you
like receiving paper checks in the mail, so I I
I sent a letter to secondary minution, and I said,
if I could get it in the mail four months around,
they'd be great. Yeah. I sent something via the post
and we're expecting a return in two weeks. Some guy
(05:05):
on horseback came by and just put it in his
his leather pouch. Kevin Costner the postman just twice now,
we've referenced it in the past six months. Yeah, well,
Matt on that note. Interestingly enough, Apple just launched a
new iPhone. Se I saw that you're still rolling with
the old, old original sc love it because it's so small, man.
It made me so happy to see that Apple recognized
(05:27):
that the sc has this little cult following because folks
don't want the giant screens. Like everybody loves the giant screens.
But I don't want an entire tablet in my pocket
when I'm going to the store where I guess I'm
not going to the store these days, when I'm going
out for a walk, you know, when I'm on my bike,
I don't want to carry around a little portable computer.
I want like just a small phone that happens to
be able to do all the computer like stuff smart
business move too, because it'll be interesting to see how
(05:49):
many people are willing to spend a third of their
stimulus check on a much cheaper Apple phone. And it's
just nice because for people that like Apple, the one
drawback is the expense of the phones, and this is
a really good phone at a much cheaper price point.
Kind Of in my mind, the sc now compares to
some of the you know, more middle ground or even
flagship uh Android phones that are in that four price range.
(06:11):
So it's nice to kind of see Apple competing with
a great phone in that you know, lower priced here.
Does this mean you're even considering switching over from your
you and your droid ways, I don't think about it,
But no, I don't know. I said, you're not die
hard against it, which I've picked up on recently. You're like,
it's not that you hate Apple products, you just have
found what you're looking for when it comes to phones,
Uh yeah, from droid. Yeah. And I think there were
(06:33):
a few things that Apple was missing for a couple
of years that I really didn't like in a particular
back in the iPhone five days, the screens were just
really small, and I didn't like how small they were.
And I feel like Apple in recent years has done
a way better job and they've adapted to some of
the better parts of what Android offered, And so yeah,
I would consider moving to an iPhone now, whereas yeah,
years ago, I would have said, heck no, yeah, it's
(06:53):
got that slightly larger screen. I think it moved from
four inches to four point seven. That's a lot better,
which to most people though it was like, wait, what,
like it sounds tiny looking for that nine screen Exactly. Yeah,
I totally agree, though. I think it's a brilliant business
decision to kind of coincide the release of a new
phone earlier this week at the same time eighty million
people get stimulus check. But more good news, Joel, Let's
(07:16):
let's let's run through it. I mean, I'm not sure
if we started offering up the good news before John
Krasinski did, but he is actually doing a great job
highlighting some happy stuff right now via his his YouTube
show that he films. I'm pretty sure just in his house,
like in his office. I love he's got like two
different camera angles and he just like vacillates between each one.
I'm pretty sure they both shot with iPhones as well,
(07:37):
which is basically how it goes these days. But on
this video on a show earlier this week, he announced
how A T and T peaking of cellphones and cell
phone providers. But they're going to provide three months of
free wireless service for nurses, for doctors as well as
other healthcare service providers. And they're offering that through the
specific service that they offer for folks who work in
the healthcare industry. Super cool. Three months for free is
(07:58):
is pretty huge, and you know, it's great to see
them stepping up in that way. Yeah, a couple other
ways of healthcare workers are getting taken care of, Matt.
I know you don't really like Costco, but some people do,
normal people do. I don't hear. Sorry for another quick
rabbit trail. My parents recently brought us some Costco toilet
paper the Kirkland signature. Yeah, because we were out and
we couldn't get get our hands on any and so
(08:19):
they brought us this giant, industrial size thing of toilet paper.
And I will say it's really thick. Dare I say
too thick? I'm not used to using so few squares
to wipe the bottoms in our household. You know, I'm
sorry used to going with half fly. Okay, hey, it's
to ply, but it's reasonable thickness to apply. Like our
plumbing can't even hardly flush, Like our toilets can't flush
(08:41):
this toilet paper down the toilet. It just sits on
top of the water. It doesn't even like soak in.
It's now I feel like you're just looking for Costco complains.
Costco is too much al right, Like you could hang
this toilet paper up in our studio here and it
would help deaden the echoes like that, that's how thick
this stuff is. All right, Well, I don't want to know.
I like ripping about Costco. Let's talk about the good
thing they do. Some good stuff. They're allowing healthcare workers
(09:01):
and first responders to skip lines of stores, which how
cool is that It's cool? And another benefit for healthcare
workers too. It's not life changing, but it is a
thoughtful way to make sure that their lives are a
little easier. Free crocs right now. I gotta be honest,
You couldn't pay me to wear crocs, but I do
appreciate that they're giving away free crocs. To healthcare workers.
I don't think you have to wear crocs if you're
a nurse, but I know a lot of nurses wear
(09:22):
them almost mandatory uniform. Yeah, it's like a standard thing.
I think that nurses to know wears like the non
skid is important and you can like you know, disinfect
them as needed and if you get some gross stuff
on your crocs. Feel like maybe chefs are into crocs too.
Oh yeah, I think I've seen chefs wear them before.
But I will admit I had a pair of crocs
back in the day. This is like two thousand everybody had.
(09:43):
Everybody did it, but not any more. Man. Yeah. Yeah.
And one other piece of good news that we want
to mention is that city group they are offering. There
there would be summer interns, full time jobs during a
time when there is so much uncertainty. It's really great
seeing a company step up and provide some sold a
financial footing for recent graduates who are going to be
entering the workforce. And so that's after their internship, right,
(10:05):
so they've got full time jobs lined up. But then
in addition to that, these city interns, they will also
be paid for the ten weeks they were supposed to
have worked this summer, right, So obviously, right now you
can't go into, you know, one of the giant City
Group offices, one of the headquarters in like London or
Hong Kong, New York perhaps, but they are getting paid
for that anyway, So yeah, move over, stimulus check. We
got that City Group money rolling in. If you are
(10:27):
one of those lucky interns, that's great. Should have applied
for that internship. And what was I thinking back in
my day, Matt, They didn't used to pay interns, So
I was an unpaid intern in my first sint in media.
But I love that interns are getting paid. I think
they should get paid. I think that's a good thing
to do. And I love what City is doing here
and in particular saying, you know what, all of you
are going to have a job at the end of this,
which is really cool. But Matt, let's get onto kind
(10:49):
of some of the topics that we wanted to cover
besides just all the good news, and one of the
things we wanted to cover on today's episode is is
the changing face of how we're spending as consumers. The
New York Times dove to the numbers recently from a
research company. The tracks credit and debit card transactions and
the changes are remarkable. They've been swift, so like some
spending is up of course, with more folks cooking get
(11:10):
home online grocery delivery in meal kits, they've seen a
massive number of new adopters. Matt I looked up Blue
Apron stock and it was down to two dollars a
share recently, and it's up to about twelve dollars a
share right now. Yeah, so there's been this just massive
uptick in people subscribing to services like Blue Apron. Checking
that out, and by the way, that's not an endorsement
to to buy single stocks or Blue Apron stock. No,
(11:32):
if you can go back in time and you can
buy it at two dollars a share, you should do that.
But also pick up that sports all the neck. Well, yeah,
and that we had an episode where we talked to
Beth Monsale about cooking at home on a budget. We
highly recommend people going back and listening to that. That That
was episode one if you didn't get to check that out.
But you know, she actually made reference to these meal
delivery services and said, yeah, they're not a terrible idea,
(11:53):
but the better idea is to buy stuff at your
local grocer, preferably in Aldi and she's got some great
recipes teat up for people to cook atter at home.
So more folks are spending money on groceries since they're
staying at home and cooking, and even on these meal
in a box delivery services like Blue Apron. Spending is
up there, but shopping and just overall consumer spending is down.
One economist stated that this is the sharpest decline in
(12:14):
consumer spending that we've ever seen, and of course, Joel
anything and pretty much everything travel related has suffered majorly,
from airlines to gas stations, electric scooters, they have all
seen massive declines. And it will certainly be interesting to
see which of these patterns stick around and which one's
melts away as our lives hopefully begin to return to
a somewhat more normal state in the coming weeks, because
(12:35):
essentially the domain is there right um, it's just being paused.
Like people want to spend money. A lot of people
want to be able to go out into restaurants and
spend their money, you know, on sports and just all
the things that they're normally used to. But because of
the health crisis, we can't, and so it's it's different
in a lot of ways than the Great Recession and
the Great Depression. The Great Lockdown is odd at least
(12:56):
right now, because we want to spend money. A lot
of us, you know, have some funds that we're willing
to spend. We just can't. We're not being allowed to
to spend that money. And so as long as the
lockdown is still going on, though, I think we'll continue
to see spending sort of reflect that. But as soon
as you know, the quarantine is lifted a little bit,
I wouldn't be surprised if we see spending surge. I
don't think it'll make up for all that law spending
over the past you know, weeks and maybe even months,
(13:18):
but it'll be interesting to see. I think it's gonna
be interesting to see what that bounce back looks like,
because I'm not as optimistic as you that it's going
to be immediate after the lockdown is over, because a
lot of us are gonna be fearful to go to
sporting events for a while. I don't think we're gonna
see fifty sixty seventy thousand people jammed into a stadium.
I think we're gonna see more sparsely attendant events. And
and to just with the unemployment, how long is how
(13:39):
long lived is that going to be? You know, I'm
hoping that these additional months of unemployment benefits are going
to bridge the gap and allow people to continue to
spend like they normally would, but that remains to be
seen too. So, yeah, how quickly are things gonna bounce back?
I mean, I'm optimistic about the American economy as a whole,
and if we're talking about more than just the next
few months, we're gonna be fine. Things are gonna bounce back.
(14:00):
But yeah, it'll be interesting to see what the yeah,
the trajectory, what that looks like, and and yeah, the
pacing of the recovery, I hear you and man as
we're kind of trying to figure out what the pacing
is gonna look like. It's really interesting to see that
one of the lead indicators of what the recovery looks
like could potentially be something really obscure and something that
most of us don't think about as being an economic indicator,
(14:21):
and that is electricity usage. And you know, the New
York Times had another story that I found fascinating, and
it basically said that most economic indicators work on some
sort of a delay, Like unemployment benefits. We we find
out the previous week's unemployment filings a week down the road.
But electricity usage you can give us a peek into
what's actually happening with the economy with almost no delay
at all. Yeah, not to mention even larger economic indicators
(14:43):
like quarterly reports and you know, the GDP typically delayed
by months to see you know, how things were going
and you know the previous quarter. Yeah. Yeah, we don't
know exactly what the losses are gonna look like for
some of these big companies yet, we'll find that out.
But charting the overall electricity usage in the country can
be helpful to figure out what's happening right now. So
we've had a sharp decline in usage, and that's mostly
(15:04):
because of all the businesses that are currently closed, like restaurants, theaters,
bar salons, etcetera. Right, And I think that's just kind
of this interesting thing that I know for me, I'm
going to keep tracking that. When you look back at
two thousand eight in the Great Recession, the pick back
up an electricity usage did seem to mirror kind of
a bounce back in the overall economy. So we'll be
fascinating to see if that same correlation still holds true
(15:26):
in the aftermath and bounce back from you know, the
Great lockdown. You obviously we're talking about economic indicators here, right,
and and and when it comes to electricity, we're looking
at energy use as a as a clear indicator. But
interestingly we've also been able to see environmental real time
changes as well. I'm thinking about um NASA. They published
some of these photos in China before and after the lockdown.
(15:46):
You know, they're a lockdown, and the amount of pollution,
the dig the decrease and pollution was mind boggling. I've
seen pigs of Los Angeles too, and it's had a
big difference there, so much clear and so obviously you know,
this is an environmental change, but it's important to see that,
you know, some of these changes that are occurring aren't
necessarily economic related, and they're not energy related, but they're environmental.
(16:09):
And some of these changes that we're seeing are positive
and so it's not all negative. You know, we are
seeing numbers drop, but when it comes to the environment
and just kind of you know, what the world looks
like right now, at least there's an upside there. Yeah,
some good news. And obviously tracking electricity use is not
an exact science, but it is an interesting indicator. I
found that fascinating. All right, Matt, let's get into some
of our thoughts on the housing market, the spring housing
(16:31):
market in particular. We've got a listener who's under contract
on a house and wants to know what to do.
We'll get to that right after the break. All right,
So we're back to the break, and man, what is
up with the housing market? Right? It's Spring. Generally this
is the busiest time for homes to be bought and sold,
(16:53):
but that is not the case right now. We've got
a listener question about the housing market from Robin. Hey, guys,
love your show. Okay, but straight to the point, is
buying a home right now? A good ideas have been
looking for the home for the past several months, prior
to this whole pandemic we're actually during, but within the
last few weeks, we've got to offer accepted. We want
(17:14):
to ask for the first week of the stay at
home order that was issued out in southern California. We
currently live in Los Sounge, California. Where the market is
extremely competitive and ridiculously overpriced. But we've been told by
several of our colleagues, friends and family members that just
to wait because the housing markets gonna go down. They're
saying it should be buyer's market within the next six
(17:36):
to eight months. We love the home we're in Escort four,
but obviously getting cold feet because of what's happening. We
would love to hear what you both think. Anyways, thank
you guys for listening to this response and look forward
to going to what you guys have to say. By Robin,
that's a great question, and it's certainly something that we
need to address because a lot of people who whether
(17:57):
they're under contract on a home right now or they're
just kind of all that this spring market was the
time to buy or sell a home. It's important for
us to think through, you know, what the implications of
this pandemic are on the housing market. So let's get
into it, Matt. I think the first thing we have
to admit is that it's hard to know what's going
to happen with the housing market in the next few
weeks or in the next few months. And so Robin
(18:17):
talking to his friends about many many months down the road.
What's gonna happen with the housing market. None of us
can be sure about what's going to happen, but we
do have some peaks, I would say, into what is
going on. I think we're definitely seeing many buyers waiting
to purchase a home, especially with most of us being
locked in our homes. We're basically prevented from doing in
in home walkthrough of a house that we're interested in,
(18:38):
right and so these people might have been looking recently,
but they put their search on hold for now because
of COVID nineteen. Banks have also seen that home purchase
loan applications have fallen for four consecutive weeks to the
lowest level since So there is an immediate and current
impact on the market right now. Yeah, man, And so
the question we're asking now is, you know, will it
be a buyer's market six months from now? That's almost
(19:00):
an impossible question to answer. But I'm not as confident
as your friends and your family members that the housing
market will continue to deteriorate. For one, mortgage rates are
incredibly low, and so that means that homes are more
affordable for everyone right now. But if folks hold out
due to the health crisis. There's a good chance that
there will be a lot of pence up demand to
(19:21):
buy six months from now or whenever we begin to
resume quote unquote normal life. Yeah, and at the same time,
housing inventory is low. It's been low for years, right,
There haven't been this few homes on the market since.
So while we could see a little dip in housing
prices as unemployment numbers increase, it's no guarantee. So if
you are under contract on a home that you love
(19:42):
and that you plan on living in for a long time,
I think matt our device would be go through with it.
Buy a home, take advantage of the uber low rates
right now, lock in a long term incredibly favorable mortgage
rate on a home that you really really want to
live in, and try not to think too much about
where home prices will be in the future. Yeah, Robin,
your question has had mostly to do with like the market, right,
And so there's basically two considerations that you want to
(20:04):
take into account if you're looking at a home. Personal
considerations and the market considerations. We don't really know what
the market is gonna do, and so what we want
to address specifically here is your you know, your personal considerations,
like if you guys really love the house by it,
if you guys are in a solid place financially right,
like if you've got plenty of cash for that down payment,
for furnishing that home, for any repairs that you might
have to make shortly after. Oh and in jobs as well,
(20:25):
like you want to make sure that you've got a
job that's you know, where you're gainfully employed and that's
going to be super solid for the foreseeable future. Um,
the last thing we would want for you to do
is to get a new mortgage and then eight twelve
months from now, you know it's your your strapped and
and you can't pay that mortgage payment because maybe you know,
one or both of you have lost your job. That
would be a really difficult position to be in. So
it's good to be aware to what the market's doing,
(20:47):
but don't forget about those personal factors as well. Yeah,
and depending on the price of the home, Matt, the
fact that the interest rate is incredibly low matters a lot.
If interest rates bumped up even just half a point,
that price reduction that you might end up getting if
the mark it did end up dipping, well, the lower
mortgage right might be even more impressive than a small
price concession. So yeah, that's an important factor and something
(21:07):
that's definitely in your corner right now, Robin, when you're
buying this home and Matt, on that note, we're talking
about getting a mortgage. I read a story this week
about lending standards going up, and I think I mentioned
that this might be the case a couple of weeks ago,
that we saw this after the Great Recession in two
thousand and eight. We saw we saw banks tightening their
lending standards and being more forcible in proving a good
credit score, decent income, stuff like that. You want to
(21:29):
know how difficult it was to buy your first home
as a small business owner that had been in business
for less than two years. Incredibly hard. Yeah, a personal experience. Man.
It was so staking hard for us to get approved
for a loan because we didn't have that history of
corporate tax returns to give to the banks, and so
it was so much work, a lot of manual underwriting
and them asking where every single dollar came from, which
(21:50):
we're seeing already. But yeah, I think we can expect
to see more of that. Yeah, and specifically Chase bank
is upping their credit score requirements. You have to have
at least a seven credit score, and you're gonna be
required to make you down payment equal to the home's value. So, Matt,
that's kind of what we recommend already is to try
to put down to have a good credit score, right
those but now they're making you do it. But now
they're making you do it, and your credit score is
(22:11):
going to become even more important as you seek a
mortgage with other lenders too. So just important to note
that if you are buying a home, pay special attention
to the requirements that a credit union or a bank
is is placing on you, and and shopping around might
become even more necessary, especially if you don't have that
high credit score. Uh, and you don't have that vast
savings to put down. Yeah, and aside from new home purchases,
(22:35):
you know, refinancing is is making more and more sense
for a greater number of folks as well. But again,
these increased lending standards could really make it difficult for
many folks who would benefit to be able to take
advantage of the low rates currently being offered. And at
the top of the episode, you know we're talking about
the stimulus checks we've we're mentioning how you know they
showed up on time, just as they were promised, and
so our next listener question has to do with that money,
(22:56):
specifically that a lot of us have already received. Kind
Jelan Matt, this is Lauren calling from Chicago. First off,
thanks so much for all the topics you've already covered.
Building off of episode one eight, could you dive into
possible tax implications of these stimulus checks. I've heard it's
alone grant and recently that it replaces our tax return
so that it might be beneficial to freeze tax decisions presently,
(23:20):
So I would love if you could dive into that.
Thanks so much and all of your help is appreciated. Lauren,
that's a great question. Yeah, we just talked about what
to do with your stimulus checks on episode, but we
didn't talk about the tax implications. We should have done it, yes,
So it is important to note these stimulus checks or
payments are not taxable income. They are structured as refundable
tax credits. So the good news is that the whole
(23:42):
if you're eligible for that amount, or a couple, or
if you've got eighteen kids and it's five bucks per kids.
That's that's a lot of money too. All of that
is yours, So use it wisely and know that you're
not going to be paying any sort of tax on
the stimulus money you're receiving. That's right. The stimulus checks
do not count towards your taxable income, unlike unemployment benefits.
That's something that we you know, a lot of folks
(24:03):
are receiving that they're gonna have to report as that
contributes to their income. But yeah, no income taxes on
this money. And so I think one of the reasons
too that we're seeing a lot of folks confused and
thinking that this is sort of like an advance on
the return is because of the fact that it's falling
on April fifte right, It's falling on a date that
is typically associated with a tax return with a refund,
(24:24):
and I think that's kind of gunking up the gears
a little bit. You know, folks are kind of getting
their wires crossed, and with the stimulus checks being based
on what we made previously right in nineteen, I've seen
some questions arise where folks are afraid that by making
more money this year in twenty that they're going to
have to owe some of this money back. That's also
not the case. This is purely based on previous year's returns.
And if you happen to make more money this year
(24:45):
somehow in twenty, well you're not going to end up
owing any of that money back to the government. So
no worries there. Yeah, that's helpful information. Map the way
our taxes are structured, there are are all sorts of
different things that we get. Is it a deduction, is
it a credit, is it a refund? Like what is
it in? Those are all all look differently when it
comes to our taxes, and so yeah, but this one
is specifically a credit, and once that money is in
(25:06):
your hands, you will not be taxed on it and
it can never be clawed back. So yeah, great news
for all of us, right chedule. Interestingly, in the bank
account where I received our stimulus check, that deposit, it
was actually labeled as a refund. It was so it's
a refundable tax credit. It had that r e F,
which I assume is refund. Maybe it means reference to
something else. I don't know, but what I thought, I thought,
(25:26):
Oh cool, refund, And you know, I r s. It
was all there. But yeah, hopefully if you haven't received
yours already, you are, Let's hope darn all of our
accounts shortly. So all right, man, that's gonna do it
for this episode. For folks who want more money info,
head to our website how to money dot com. All right, buddy, Well,
that's gonna be it until next time. Best friends out,
Best Friends Out,
Welcome to How the Money. I'm Joel and I and Matt.
Today we're discussing the great lockdown effects on spending and
the housing market. That's right, buddy. We're going to dive
(00:27):
into some changes to our spending, the spending that the
country is doing as a whole. Right, it's it's changed dramatically.
We're gonna talk about that. We're gonna take a couple
of listener questions later on as well, including one that's
gonna address the housing market. You know, like spring is
typically a pretty hot time for housing, but that is
not the case this year. And uh, I think we
all know why. So yeah, the virus which need not
(00:50):
be named. That's right. Well, you've been listening to Harry Potter.
Which book are you on? By the way, I'm waiting
for my local library to give me the audio book
of book seven. I'll be done. Oh my gosh, So
you just finished six six so good? It's so good,
pretty brutal at the end. Yeah, man, Yeah, I'm loving,
loving that series. And the guy who does the voice
(01:11):
narration for the Harry Potter books is incredible. He really is.
Jim Dale. Yeah, Kayt and eyes relationship when we first
started dating was we were long distance, and so we
both associate Harry Potter with our early months and years
of dating because as we would drive to the different
cities to visit each other, we would both listen to
Harry Potter, and so, yeah, it kind of has a
(01:33):
spot in our heart in our relationship there at the beginning.
But yes, the virus that shall not be named the
Great Lockdown, it seems like it's what this is being called.
Now we're in week five, man, how how are you
guys holding up? We're doing pretty good. Yeah, still pretty good.
I think the getting back to school thing is taking
a little bit more of a toll on the family,
on the kids, trying to kind of get into that
(01:53):
more regular school day. It just feels weird trying to
do it from home. But we're doing our best well.
In particular our school, a school that we sent our
oldest girls too, they've basically launched phase three of that
home learning right and they've gotten way more serious and
it's a lot harder. Right. Exactly before it was like
let's review some stuff and you know what, do some
related arts of your own, and now it's now we're
(02:14):
gonna do school for real. Yeah, it's it's legits. It's
a lot more pressure on our wives since they're the
ones taking care of the kid as at home while
you and I continue to work. We both have stay
at home mama's holding down the fort. We're incredibly thankful
for them, but it is not easy. Yeah, they do
the hard work around here, that's for sure, absolutely, man.
But first we gotta get to the good news, all right.
That's what we try to start off each of these
episodes with, is some good news of what's happening out there,
(02:38):
even in the midst of health and economic turmoil. So
we have the first item of good news we wanted
to mention is stimulus checks. We just talked about these
on Wednesday, Matt, and they are showing up in people's accounts.
They actually started showing up it seems like either earlier
this week or potentially late last week from what I'm
hearing from people in their bank accounts. And that's great. Right,
We have a listener question about the stimulus checks, so
(02:59):
we're gonna get to later in the episode, but I
wanted to ask you, have you received yours yet? Heck, yeah, dude,
it showed up earlier this week on April fift that
was the date that they were targeting. I made a
point to check it that morning because that is the
date that Secretary minutein Treasury Secretary that's the that's the
date that they were gunning for, and he was saying
that eighty million folks should have checks in their accounts
(03:20):
by that date with a direct deposit. So, um, yeah,
we were one of those folks that got our payment
right on time, which was nice, honestly, and it was
a little surprising to show up like that. I still
have him received mine and I logged into the IRS
website to kind of check and see the status. I
believe mine said that the I r S had not
determined my eligibility yet, and I think that might freak
some people out if they know they're eligible and they
get that response when they log in. Don't get freaked out.
(03:42):
I think it is them trying to process just so
many payments in such a short amount of time. If
you qualify right, if you make under that adjusted gross income,
which means you're actually going to get some sort of
a payout, you will get it. Just be patient. I
think we're going to see more payments, hopefully next week
in the following week and hopefully before too long we
all get that money. I know, um, for a lot
(04:03):
of people, it's more of a need, and so I
hate that people are having to wait, that anybody is
having to wait. But it is certainly good news that
a lot of Americans are getting that money, and they're
getting it now. Yeah, and and this is just speculation,
but you just filed your taxes right, your your twenty
nineteen taxically, just like a week and a half ago. Yeah.
I suspect this isn't at all confirmed anywhere, but I
(04:23):
think that folks who have filed their taxes recently, it
might be slightly slower, slightly delayed, as the I R S,
as the federal government is looking at the most recent
return that has been filed. If you haven't filed your
taxes yet, because you have until July fift you automatically
get qualified based on your twenty eighteen taxes. But once
you do file your twenty nineteen tax return, that is
(04:44):
the return that they based your eligibility on. And so
with it showing up, you know, I guess more recently.
I don't know. I'm thinking it might delay things slightly.
Plus you're all about the snail mail. I know you
like receiving paper checks in the mail, so I I
I sent a letter to secondary minution, and I said,
if I could get it in the mail four months around,
they'd be great. Yeah. I sent something via the post
and we're expecting a return in two weeks. Some guy
(05:05):
on horseback came by and just put it in his
his leather pouch. Kevin Costner the postman just twice now,
we've referenced it in the past six months. Yeah, well,
Matt on that note. Interestingly enough, Apple just launched a
new iPhone. Se I saw that you're still rolling with
the old, old original sc love it because it's so small, man.
It made me so happy to see that Apple recognized
(05:27):
that the sc has this little cult following because folks
don't want the giant screens. Like everybody loves the giant screens.
But I don't want an entire tablet in my pocket
when I'm going to the store where I guess I'm
not going to the store these days, when I'm going
out for a walk, you know, when I'm on my bike,
I don't want to carry around a little portable computer.
I want like just a small phone that happens to
be able to do all the computer like stuff smart
business move too, because it'll be interesting to see how
(05:49):
many people are willing to spend a third of their
stimulus check on a much cheaper Apple phone. And it's
just nice because for people that like Apple, the one
drawback is the expense of the phones, and this is
a really good phone at a much cheaper price point.
Kind Of in my mind, the sc now compares to
some of the you know, more middle ground or even
flagship uh Android phones that are in that four price range.
(06:11):
So it's nice to kind of see Apple competing with
a great phone in that you know, lower priced here.
Does this mean you're even considering switching over from your
you and your droid ways, I don't think about it,
But no, I don't know. I said, you're not die
hard against it, which I've picked up on recently. You're like,
it's not that you hate Apple products, you just have
found what you're looking for when it comes to phones,
Uh yeah, from droid. Yeah. And I think there were
(06:33):
a few things that Apple was missing for a couple
of years that I really didn't like in a particular
back in the iPhone five days, the screens were just
really small, and I didn't like how small they were.
And I feel like Apple in recent years has done
a way better job and they've adapted to some of
the better parts of what Android offered, And so yeah,
I would consider moving to an iPhone now, whereas yeah,
years ago, I would have said, heck no, yeah, it's
(06:53):
got that slightly larger screen. I think it moved from
four inches to four point seven. That's a lot better,
which to most people though it was like, wait, what,
like it sounds tiny looking for that nine screen Exactly. Yeah,
I totally agree, though. I think it's a brilliant business
decision to kind of coincide the release of a new
phone earlier this week at the same time eighty million
people get stimulus check. But more good news, Joel, Let's
(07:16):
let's let's run through it. I mean, I'm not sure
if we started offering up the good news before John
Krasinski did, but he is actually doing a great job
highlighting some happy stuff right now via his his YouTube
show that he films. I'm pretty sure just in his house,
like in his office. I love he's got like two
different camera angles and he just like vacillates between each one.
I'm pretty sure they both shot with iPhones as well,
(07:37):
which is basically how it goes these days. But on
this video on a show earlier this week, he announced
how A T and T peaking of cellphones and cell
phone providers. But they're going to provide three months of
free wireless service for nurses, for doctors as well as
other healthcare service providers. And they're offering that through the
specific service that they offer for folks who work in
the healthcare industry. Super cool. Three months for free is
(07:58):
is pretty huge, and you know, it's great to see
them stepping up in that way. Yeah, a couple other
ways of healthcare workers are getting taken care of, Matt.
I know you don't really like Costco, but some people do,
normal people do. I don't hear. Sorry for another quick
rabbit trail. My parents recently brought us some Costco toilet
paper the Kirkland signature. Yeah, because we were out and
we couldn't get get our hands on any and so
(08:19):
they brought us this giant, industrial size thing of toilet paper.
And I will say it's really thick. Dare I say
too thick? I'm not used to using so few squares
to wipe the bottoms in our household. You know, I'm
sorry used to going with half fly. Okay, hey, it's
to ply, but it's reasonable thickness to apply. Like our
plumbing can't even hardly flush, Like our toilets can't flush
(08:41):
this toilet paper down the toilet. It just sits on
top of the water. It doesn't even like soak in.
It's now I feel like you're just looking for Costco complains.
Costco is too much al right, Like you could hang
this toilet paper up in our studio here and it
would help deaden the echoes like that, that's how thick
this stuff is. All right, Well, I don't want to know.
I like ripping about Costco. Let's talk about the good
thing they do. Some good stuff. They're allowing healthcare workers
(09:01):
and first responders to skip lines of stores, which how
cool is that It's cool? And another benefit for healthcare
workers too. It's not life changing, but it is a
thoughtful way to make sure that their lives are a
little easier. Free crocs right now. I gotta be honest,
You couldn't pay me to wear crocs, but I do
appreciate that they're giving away free crocs. To healthcare workers.
I don't think you have to wear crocs if you're
a nurse, but I know a lot of nurses wear
(09:22):
them almost mandatory uniform. Yeah, it's like a standard thing.
I think that nurses to know wears like the non
skid is important and you can like you know, disinfect
them as needed and if you get some gross stuff
on your crocs. Feel like maybe chefs are into crocs too.
Oh yeah, I think I've seen chefs wear them before.
But I will admit I had a pair of crocs
back in the day. This is like two thousand everybody had.
(09:43):
Everybody did it, but not any more. Man. Yeah. Yeah.
And one other piece of good news that we want
to mention is that city group they are offering. There
there would be summer interns, full time jobs during a
time when there is so much uncertainty. It's really great
seeing a company step up and provide some sold a
financial footing for recent graduates who are going to be
entering the workforce. And so that's after their internship, right,
(10:05):
so they've got full time jobs lined up. But then
in addition to that, these city interns, they will also
be paid for the ten weeks they were supposed to
have worked this summer, right, So obviously, right now you
can't go into, you know, one of the giant City
Group offices, one of the headquarters in like London or
Hong Kong, New York perhaps, but they are getting paid
for that anyway, So yeah, move over, stimulus check. We
got that City Group money rolling in. If you are
(10:27):
one of those lucky interns, that's great. Should have applied
for that internship. And what was I thinking back in
my day, Matt, They didn't used to pay interns, So
I was an unpaid intern in my first sint in media.
But I love that interns are getting paid. I think
they should get paid. I think that's a good thing
to do. And I love what City is doing here
and in particular saying, you know what, all of you
are going to have a job at the end of this,
which is really cool. But Matt, let's get onto kind
(10:49):
of some of the topics that we wanted to cover
besides just all the good news, and one of the
things we wanted to cover on today's episode is is
the changing face of how we're spending as consumers. The
New York Times dove to the numbers recently from a
research company. The tracks credit and debit card transactions and
the changes are remarkable. They've been swift, so like some
spending is up of course, with more folks cooking get
(11:10):
home online grocery delivery in meal kits, they've seen a
massive number of new adopters. Matt I looked up Blue
Apron stock and it was down to two dollars a
share recently, and it's up to about twelve dollars a
share right now. Yeah, so there's been this just massive
uptick in people subscribing to services like Blue Apron. Checking
that out, and by the way, that's not an endorsement
to to buy single stocks or Blue Apron stock. No,
(11:32):
if you can go back in time and you can
buy it at two dollars a share, you should do that.
But also pick up that sports all the neck. Well, yeah,
and that we had an episode where we talked to
Beth Monsale about cooking at home on a budget. We
highly recommend people going back and listening to that. That That
was episode one if you didn't get to check that out.
But you know, she actually made reference to these meal
delivery services and said, yeah, they're not a terrible idea,
(11:53):
but the better idea is to buy stuff at your
local grocer, preferably in Aldi and she's got some great
recipes teat up for people to cook atter at home.
So more folks are spending money on groceries since they're
staying at home and cooking, and even on these meal
in a box delivery services like Blue Apron. Spending is
up there, but shopping and just overall consumer spending is down.
One economist stated that this is the sharpest decline in
(12:14):
consumer spending that we've ever seen, and of course, Joel
anything and pretty much everything travel related has suffered majorly,
from airlines to gas stations, electric scooters, they have all
seen massive declines. And it will certainly be interesting to
see which of these patterns stick around and which one's
melts away as our lives hopefully begin to return to
a somewhat more normal state in the coming weeks, because
(12:35):
essentially the domain is there right um, it's just being paused.
Like people want to spend money. A lot of people
want to be able to go out into restaurants and
spend their money, you know, on sports and just all
the things that they're normally used to. But because of
the health crisis, we can't, and so it's it's different
in a lot of ways than the Great Recession and
the Great Depression. The Great Lockdown is odd at least
(12:56):
right now, because we want to spend money. A lot
of us, you know, have some funds that we're willing
to spend. We just can't. We're not being allowed to
to spend that money. And so as long as the
lockdown is still going on, though, I think we'll continue
to see spending sort of reflect that. But as soon
as you know, the quarantine is lifted a little bit,
I wouldn't be surprised if we see spending surge. I
don't think it'll make up for all that law spending
over the past you know, weeks and maybe even months,
(13:18):
but it'll be interesting to see. I think it's gonna
be interesting to see what that bounce back looks like,
because I'm not as optimistic as you that it's going
to be immediate after the lockdown is over, because a
lot of us are gonna be fearful to go to
sporting events for a while. I don't think we're gonna
see fifty sixty seventy thousand people jammed into a stadium.
I think we're gonna see more sparsely attendant events. And
and to just with the unemployment, how long is how
(13:39):
long lived is that going to be? You know, I'm
hoping that these additional months of unemployment benefits are going
to bridge the gap and allow people to continue to
spend like they normally would, but that remains to be
seen too. So, yeah, how quickly are things gonna bounce back?
I mean, I'm optimistic about the American economy as a whole,
and if we're talking about more than just the next
few months, we're gonna be fine. Things are gonna bounce back.
(14:00):
But yeah, it'll be interesting to see what the yeah,
the trajectory, what that looks like, and and yeah, the
pacing of the recovery, I hear you and man as
we're kind of trying to figure out what the pacing
is gonna look like. It's really interesting to see that
one of the lead indicators of what the recovery looks
like could potentially be something really obscure and something that
most of us don't think about as being an economic indicator,
(14:21):
and that is electricity usage. And you know, the New
York Times had another story that I found fascinating, and
it basically said that most economic indicators work on some
sort of a delay, Like unemployment benefits. We we find
out the previous week's unemployment filings a week down the road.
But electricity usage you can give us a peek into
what's actually happening with the economy with almost no delay
at all. Yeah, not to mention even larger economic indicators
(14:43):
like quarterly reports and you know, the GDP typically delayed
by months to see you know, how things were going
and you know the previous quarter. Yeah. Yeah, we don't
know exactly what the losses are gonna look like for
some of these big companies yet, we'll find that out.
But charting the overall electricity usage in the country can
be helpful to figure out what's happening right now. So
we've had a sharp decline in usage, and that's mostly
(15:04):
because of all the businesses that are currently closed, like restaurants, theaters,
bar salons, etcetera. Right, And I think that's just kind
of this interesting thing that I know for me, I'm
going to keep tracking that. When you look back at
two thousand eight in the Great Recession, the pick back
up an electricity usage did seem to mirror kind of
a bounce back in the overall economy. So we'll be
fascinating to see if that same correlation still holds true
(15:26):
in the aftermath and bounce back from you know, the
Great lockdown. You obviously we're talking about economic indicators here, right,
and and and when it comes to electricity, we're looking
at energy use as a as a clear indicator. But
interestingly we've also been able to see environmental real time
changes as well. I'm thinking about um NASA. They published
some of these photos in China before and after the lockdown.
(15:46):
You know, they're a lockdown, and the amount of pollution,
the dig the decrease and pollution was mind boggling. I've
seen pigs of Los Angeles too, and it's had a
big difference there, so much clear and so obviously you know,
this is an environmental change, but it's important to see that,
you know, some of these changes that are occurring aren't
necessarily economic related, and they're not energy related, but they're environmental.
(16:09):
And some of these changes that we're seeing are positive
and so it's not all negative. You know, we are
seeing numbers drop, but when it comes to the environment
and just kind of you know, what the world looks
like right now, at least there's an upside there. Yeah,
some good news. And obviously tracking electricity use is not
an exact science, but it is an interesting indicator. I
found that fascinating. All right, Matt, let's get into some
of our thoughts on the housing market, the spring housing
(16:31):
market in particular. We've got a listener who's under contract
on a house and wants to know what to do.
We'll get to that right after the break. All right,
So we're back to the break, and man, what is
up with the housing market? Right? It's Spring. Generally this
is the busiest time for homes to be bought and sold,
(16:53):
but that is not the case right now. We've got
a listener question about the housing market from Robin. Hey, guys,
love your show. Okay, but straight to the point, is
buying a home right now? A good ideas have been
looking for the home for the past several months, prior
to this whole pandemic we're actually during, but within the
last few weeks, we've got to offer accepted. We want
(17:14):
to ask for the first week of the stay at
home order that was issued out in southern California. We
currently live in Los Sounge, California. Where the market is
extremely competitive and ridiculously overpriced. But we've been told by
several of our colleagues, friends and family members that just
to wait because the housing markets gonna go down. They're
saying it should be buyer's market within the next six
(17:36):
to eight months. We love the home we're in Escort four,
but obviously getting cold feet because of what's happening. We
would love to hear what you both think. Anyways, thank
you guys for listening to this response and look forward
to going to what you guys have to say. By Robin,
that's a great question, and it's certainly something that we
need to address because a lot of people who whether
(17:57):
they're under contract on a home right now or they're
just kind of all that this spring market was the
time to buy or sell a home. It's important for
us to think through, you know, what the implications of
this pandemic are on the housing market. So let's get
into it, Matt. I think the first thing we have
to admit is that it's hard to know what's going
to happen with the housing market in the next few
weeks or in the next few months. And so Robin
(18:17):
talking to his friends about many many months down the road.
What's gonna happen with the housing market. None of us
can be sure about what's going to happen, but we
do have some peaks, I would say, into what is
going on. I think we're definitely seeing many buyers waiting
to purchase a home, especially with most of us being
locked in our homes. We're basically prevented from doing in
in home walkthrough of a house that we're interested in,
(18:38):
right and so these people might have been looking recently,
but they put their search on hold for now because
of COVID nineteen. Banks have also seen that home purchase
loan applications have fallen for four consecutive weeks to the
lowest level since So there is an immediate and current
impact on the market right now. Yeah, man, And so
the question we're asking now is, you know, will it
be a buyer's market six months from now? That's almost
(19:00):
an impossible question to answer. But I'm not as confident
as your friends and your family members that the housing
market will continue to deteriorate. For one, mortgage rates are
incredibly low, and so that means that homes are more
affordable for everyone right now. But if folks hold out
due to the health crisis. There's a good chance that
there will be a lot of pence up demand to
(19:21):
buy six months from now or whenever we begin to
resume quote unquote normal life. Yeah, and at the same time,
housing inventory is low. It's been low for years, right,
There haven't been this few homes on the market since.
So while we could see a little dip in housing
prices as unemployment numbers increase, it's no guarantee. So if
you are under contract on a home that you love
(19:42):
and that you plan on living in for a long time,
I think matt our device would be go through with it.
Buy a home, take advantage of the uber low rates
right now, lock in a long term incredibly favorable mortgage
rate on a home that you really really want to
live in, and try not to think too much about
where home prices will be in the future. Yeah, Robin,
your question has had mostly to do with like the market, right,
And so there's basically two considerations that you want to
(20:04):
take into account if you're looking at a home. Personal
considerations and the market considerations. We don't really know what
the market is gonna do, and so what we want
to address specifically here is your you know, your personal considerations,
like if you guys really love the house by it,
if you guys are in a solid place financially right,
like if you've got plenty of cash for that down payment,
for furnishing that home, for any repairs that you might
have to make shortly after. Oh and in jobs as well,
(20:25):
like you want to make sure that you've got a
job that's you know, where you're gainfully employed and that's
going to be super solid for the foreseeable future. Um,
the last thing we would want for you to do
is to get a new mortgage and then eight twelve
months from now, you know it's your your strapped and
and you can't pay that mortgage payment because maybe you know,
one or both of you have lost your job. That
would be a really difficult position to be in. So
it's good to be aware to what the market's doing,
(20:47):
but don't forget about those personal factors as well. Yeah,
and depending on the price of the home, Matt, the
fact that the interest rate is incredibly low matters a lot.
If interest rates bumped up even just half a point,
that price reduction that you might end up getting if
the mark it did end up dipping, well, the lower
mortgage right might be even more impressive than a small
price concession. So yeah, that's an important factor and something
(21:07):
that's definitely in your corner right now, Robin, when you're
buying this home and Matt, on that note, we're talking
about getting a mortgage. I read a story this week
about lending standards going up, and I think I mentioned
that this might be the case a couple of weeks ago,
that we saw this after the Great Recession in two
thousand and eight. We saw we saw banks tightening their
lending standards and being more forcible in proving a good
credit score, decent income, stuff like that. You want to
(21:29):
know how difficult it was to buy your first home
as a small business owner that had been in business
for less than two years. Incredibly hard. Yeah, a personal experience. Man.
It was so staking hard for us to get approved
for a loan because we didn't have that history of
corporate tax returns to give to the banks, and so
it was so much work, a lot of manual underwriting
and them asking where every single dollar came from, which
(21:50):
we're seeing already. But yeah, I think we can expect
to see more of that. Yeah, and specifically Chase bank
is upping their credit score requirements. You have to have
at least a seven credit score, and you're gonna be
required to make you down payment equal to the home's value. So, Matt,
that's kind of what we recommend already is to try
to put down to have a good credit score, right
those but now they're making you do it. But now
they're making you do it, and your credit score is
(22:11):
going to become even more important as you seek a
mortgage with other lenders too. So just important to note
that if you are buying a home, pay special attention
to the requirements that a credit union or a bank
is is placing on you, and and shopping around might
become even more necessary, especially if you don't have that
high credit score. Uh, and you don't have that vast
savings to put down. Yeah, and aside from new home purchases,
(22:35):
you know, refinancing is is making more and more sense
for a greater number of folks as well. But again,
these increased lending standards could really make it difficult for
many folks who would benefit to be able to take
advantage of the low rates currently being offered. And at
the top of the episode, you know we're talking about
the stimulus checks we've we're mentioning how you know they
showed up on time, just as they were promised, and
so our next listener question has to do with that money,
(22:56):
specifically that a lot of us have already received. Kind
Jelan Matt, this is Lauren calling from Chicago. First off,
thanks so much for all the topics you've already covered.
Building off of episode one eight, could you dive into
possible tax implications of these stimulus checks. I've heard it's
alone grant and recently that it replaces our tax return
so that it might be beneficial to freeze tax decisions presently,
(23:20):
So I would love if you could dive into that.
Thanks so much and all of your help is appreciated. Lauren,
that's a great question. Yeah, we just talked about what
to do with your stimulus checks on episode, but we
didn't talk about the tax implications. We should have done it, yes,
So it is important to note these stimulus checks or
payments are not taxable income. They are structured as refundable
tax credits. So the good news is that the whole
(23:42):
if you're eligible for that amount, or a couple, or
if you've got eighteen kids and it's five bucks per kids.
That's that's a lot of money too. All of that
is yours, So use it wisely and know that you're
not going to be paying any sort of tax on
the stimulus money you're receiving. That's right. The stimulus checks
do not count towards your taxable income, unlike unemployment benefits.
That's something that we you know, a lot of folks
(24:03):
are receiving that they're gonna have to report as that
contributes to their income. But yeah, no income taxes on
this money. And so I think one of the reasons
too that we're seeing a lot of folks confused and
thinking that this is sort of like an advance on
the return is because of the fact that it's falling
on April fifte right, It's falling on a date that
is typically associated with a tax return with a refund,
(24:24):
and I think that's kind of gunking up the gears
a little bit. You know, folks are kind of getting
their wires crossed, and with the stimulus checks being based
on what we made previously right in nineteen, I've seen
some questions arise where folks are afraid that by making
more money this year in twenty that they're going to
have to owe some of this money back. That's also
not the case. This is purely based on previous year's returns.
And if you happen to make more money this year
(24:45):
somehow in twenty, well you're not going to end up
owing any of that money back to the government. So
no worries there. Yeah, that's helpful information. Map the way
our taxes are structured, there are are all sorts of
different things that we get. Is it a deduction, is
it a credit, is it a refund? Like what is
it in? Those are all all look differently when it
comes to our taxes, and so yeah, but this one
is specifically a credit, and once that money is in
(25:06):
your hands, you will not be taxed on it and
it can never be clawed back. So yeah, great news
for all of us, right chedule. Interestingly, in the bank
account where I received our stimulus check, that deposit, it
was actually labeled as a refund. It was so it's
a refundable tax credit. It had that r e F,
which I assume is refund. Maybe it means reference to
something else. I don't know, but what I thought, I thought,
(25:26):
Oh cool, refund, And you know, I r s. It
was all there. But yeah, hopefully if you haven't received
yours already, you are, Let's hope darn all of our
accounts shortly. So all right, man, that's gonna do it
for this episode. For folks who want more money info,
head to our website how to money dot com. All right, buddy, Well,
that's gonna be it until next time. Best friends out,
Best Friends Out,
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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