April 15, 2020 • 32 mins
A stimulus check, tax refund, or any large windfall doesn’t happen all that often, so it’s no surprise that we’re not all that great at doing something smart with that money. Most of us think of it as a bonus that we should spend! And for people who diligently prioritize saving and investing every single month of the year, that might be ok. But for most people, a more thoughtful approach is in order. Much of it depends on your specific situation, and so we have some thoughts as to what you should be doing with that money when it shows up in your account. We can approach it with the numbers in mind, or values front and center- where you do you land?
During this episode we enjoyed a Space Lettuce by Monday Night Brewing! And as we ramp up the podcast with an additional Friday episode every week, we could really use your help to spread the word- let friends and family know about How to Money! Hit the share button, subscribe if you’re not already a regular, and give us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to spread the word to get more people doing smart things with their money in these difficult times!
Best friends out!
Learn more about your ad-choices at https://www.iheartpodcastnetwork.com
See omnystudio.com/listener for privacy information.
Mark as Played
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,
and today we're discussing what to do with stimulus checks
and tax refunds. That's right, Joel, We're going to talk
(00:28):
about what to do with a little infusion of cash
into our bank accounts. Man. But first we wanted to
acknowledge that while we talk about personal finances and money
every episode, a lot of individuals have lost their lives
due to the coronavirus. Hopefully the worst is behind us,
as it looks like we may have hit our peak
last week. But our hearts go out to all the
(00:51):
individuals whose health has been impacted by this virus, and
we feel for the families who have suffered losses. And
we're thankful for everyone who is putting their lives at
risk right now as well, all the nurses, all the doctors,
all those who have essential jobs keeping food on the shelves,
first responders, keeping us safe. We're thankful for all of
you out there as well. Yeah, man, I think we're
(01:11):
all so ready to be done with this virus and
hopefully we're out of the wood soon on the health
side of this, But you know, the money side is
another thing. That's had an impact, and and it has
been getting worse and worse as the unemployment numbers go
up and and the stimulus build. These stimulus checks that
we should be starting to to receive in our accounts
any day now, those are going to have a major
(01:31):
impact on our ability as individual Americans to weather this
storm and to stay financially solvent. And of course the
negative financial impact is all because of this virus that
we just can't control, which is which is just a
weird place to be in. Yeah, man, so weird. Hopefully
these checks, along with the other stimulus measures that were
part of the Cares Act, will will allow our economy
to bounce back, right, Like this is something that some
(01:53):
of the different economists are pointing to, like that they're
they're talking about the shape of the rebound. I don't
know if you've seen some of those articles you versus
V or yeah, you versus the V. Yeah, the different
letters of the alphabet letter not exactly. Well, that's what
they're saying, like you or a V sort of shape
is that's ideal, right, because that means we're kind of
bouncing back pretty quick. A w is is is if
we basically have like a second wave, like another cycle
(02:17):
of people getting sick of the economy going through a
rough patch, and that's kind of, uh, you know, not
ideal situation. And they they're talking about l how that's
like the worst case situation. It's pretty basically where it
drops and then you know, that's kind of world we've been.
And then if it sits there for you know, for
the foreseeable future, hopefully that won't be the case, right
with these different economic measures that have been taken. Between
(02:38):
that and hopefully getting a better hold and better control
over the virus and how to treat it in ways
that we know that we should most definitely be taking precautions. Now.
I feel like early on, a lot of folks, you know,
like they're still you know, going on the belt line.
Like that's something here in Atlanta where there's just tons
of folks, in particular young folks just kind of out
and about, still living their life, hanging out on patios
with their friends. But everyone is very well aware of
(03:01):
the dangerous to that, and I mean it's basically illegal now,
like Atlanta's under lockdown. And maybe that's like a little
too long, but you know, we certainly have seen how
that's now necessary and how that's a good thing. Yeah,
and Matt, we're gonna get into kind of how people
should think about this money being you know, transferred to
their bank account essentially. And we realized too, it's April fifteenth.
That's typically tax Day in the US. Not so this year.
(03:24):
It's hyper rare to have tax Day not beyond April fifteen.
It's been pushed back three months, which is good news
for people who especially oh the I R s and
need to keep more cash in their pockets. But traditionally
April tax Day, and what that normally means is that, yeah,
you're gonna a lot of folks do get a check
in the mail completely not in the mail, it just
shows up in your bank account, right. Yeah, So we're
gonna talk about what to do with that. But Matt,
(03:45):
first we should mention the beer that we're having on
the show today. We're drinking Space Lettuce by Monday Night
Brewing and this is a double I P A from
from our friends just around the corner. Yeah, Man, we've
had several of their beers on lately, and that's in
an effort to make sure that we're supporting our local brewery.
They're one of our favorites. If you've never had a
money Night brewery and you are in the Southeast, let
them up and see if you can get your hand
(04:05):
on some of their beer. All right, Matt, let's get
onto the subject at hand. We've already kind of been
introducing it and talking about it, but we're talking about
what to do with stimulus checks and tax refunds, and
there are two big windfalls that might be hitting our
accounts any day. Some people have filed their taxes early,
they have received a tax refund already. That's me, I
already got my refund. Well's you haven't spent it already yet.
(04:25):
Right now, you're waiting for this episode to come out
to know what to do with your money. I have
to wait and defer to myself. But for most people,
it's typically just once a year that they experienced a
lumps on payment like this, and the typical tax refund
is about three thousand bucks. And with the addition of
the stimulus checks being sent to most individuals and households
across the country, we're looking at more of a windfall
(04:46):
than normal, and there's more opportunity for us to potentially
handle this poorly, So what should you prioritize with that money? Well,
we've got some thoughts. All the part of it depends
on your specific situation. We will discuss a lot of
nuance in today's episode for kind of how different people
who have different varying factors in their lives, like how
how they should consider this money as it flows into
their account and how they should be handling it. Yeahual receiving,
(05:09):
you know, a large windfall like this, a little cash
infusion of money, it doesn't happen all that often, so
it's no surprise that we're not at all that create
at doing something smart with that money. So must of
just think of it as just a bonus check that
we should spend like a percent of it. And for
for people who diligently prioritize saving and investing like all
(05:29):
throughout the year, that might be okay. But for most people,
a more thoughtful approach is going to be in order.
We don't want to blow the easiest chance we get
to start an emergency fund or paid down some of
our pesky high interest rate debts and all the tax
refund front, it's important to question whether or not we
should be getting you know, any money at all. You know,
a lot of people are used to giving that tax
(05:50):
refund check, but ultimately it's not ideal because it is
kind of in essence in interest free loan that we're
giving to the government, We're letting them hold our money
the entire year and then they give it back to us.
And so if you are one of those people who's
receiving several thousand dollars back this year after you filed
your taxes, well it might be time for you to
make some adjustments to your tax withholding. The goal should
(06:10):
be to not receive a refund or to receive a
very very small refund. And so if that's not the
case for you, well you can run some calculations and
figure out what adjustments you need to make via the
I R S Tax withholding calculator. Estimator will link to
that in our show notes. But man, if we make
those adjustments, it allows us to keep more of our
earned income in our pockets every single month, as opposed
(06:31):
to getting this one big check and kind of figuring
out what to do with it. It can allow us
to save throughout the year, as opposed to getting this
windfall sum of money that's not necessarily ideal because often
when we get that windfall sum of money, the emotional
effect is like, cool, it's it's found money and I
can do whatever I want with it. But if it's
kind of money that trickles in every single month, I
feel like we're a little more judicious with it. Typically,
(06:52):
that's that hard earned money that you've earned yourself versus this, yeah,
freebe that you get from the government. It's not a freebee,
but it feels like it. Yeah, well, at least not
in the sense of your tax refund. Obviously, the stimulus
check is meant to feel more like that. We'll get
to that later in this episode. And Jel, you mentioned
adjusting your withholdings. You know, some of the reasons or
instances when you would want to make some of those
adjustments might be when you get married, maybe if you
(07:13):
have a kid, maybe you've picked up a second job,
like if you've got a side hustle that you're starting
to make and come from, or maybe if you've lost
your job and you've been unemployed for the year. I mean,
a lot of people are going to be in that boat.
And so you know, if you're listening to this and
you're collecting that unemployment check, there's a good chance that
it's not the same amount that you were making before,
and so making some adjustments to your withholding might make
(07:35):
sense in order for you to to not receive one
of these quote unquote massive bonuses next year around tax time.
But for most of our listeners, they probably are in
the position like most America, that they are getting the
small windfall from taxes, and even if they're not, even
if they're smart and have done their withholdings well, many
of them will be getting this this stimulus check depending
on how much money they make, because it phases out
the more money you make. But a lot of our
(07:55):
listeners will be getting that stimulus check, and so either way,
there's some sort of windfall coming to to most listeners.
So we do have to kind of talk about how
people handle that. Yeah, man, that's so true. That's the
reality that we're in right now. Some of us are
receiving tax refund checks and a lot of us, if
not most of us, are going to receive a stimulus
check as well. So we still need to discuss how
to approach this lump sum amounts of money showing up
(08:16):
and we're gonna get to our thoughts on that right
after the break. All right, we're back. We're talking about
stimulus checks and tax refunds and matt Before we get
into all the good things that the people can do
and should do with their stimulus money and their tax
(08:37):
refund what, in your opinion, is like the dumbest thing
they can do with it? Good question. The first thing
my mind goes to is like going to Vegas and
like putting them on like slots. However that supports the
local economy there. It actually doesn't sound like that dumb
of a thing. And lighting it on fire was the thing.
I lighting it on fire, you know, maybe you actually
ran out of TP at home. Would be a poor
(08:59):
use of all our bills. Burying it in the ground.
Over the course of history, that's always been like a
terrible thing to do. Someone's gonna find it. Take it.
Every want to bury in the field, You're gonna be
in their backyard. With the middle detector, you're gonna find,
You're gonna find their loose change, all that kind of stuff.
Although I have heard of folks doing that before. Like
if you've got a large parcel of land, maybe maybe
burying the uh the one else gold coins at different
spots around the property. That's real life for some people. Yeah.
(09:21):
Not the smartest move, though, So let's get into the
actual smart moves that people should make and and what
they should be doing with their stimulus money and their
tax refund. We would say the first thing to prioritize
is cash in an emergency fund. Even people who feel
like they might have the most stable job in the
world right now, well they could be just a Zoom
call away from being let go from their position. Yeah.
(09:42):
And if you didn't already have a serious dislike for
for Zoom by this point, like that would be the
final nail in the coffin. Right, Privacy issues I could
deal with, But I got fired over that service, so
I'm done with it. Yeah. And at least having two thousand,
four hundred and sixty seven dollars set aside, that's kind
of the amountain mat that uh you have hold in
on as the amount that people should aim for, at
(10:03):
least as a beginner emergency fund. Having that money set
aside to handle the bumps in the road that will
come to you financially inevitably is advisable. But a few
months of living expenses set aside is even better. And
since we are in an economic recession, we're in a downturn,
cash is even more valuable now than it otherwise would
be right. It can help you pay rent or your mortgage,
and can keep stress at pay. So in times like this,
(10:25):
cash is most definitely not trash. We would suggest that
having a padded emergency fund, having that money set aside
for expenses that you might not be able to cover
in the case of a job loss, that is definitely
one of the number one priorities right now. Well, I
like that cash is not trash. Should coin that some
people hay cash to trash, but because of like recurring
expenses that we always have that all of us have,
(10:45):
I just don't understand that mentality, Like I'm not in
love with cash. I mean, they're obviously we love investing
and buying rental properties and investing in the stock market,
but there's a need for cash to certainly. Man, Well,
it's all about context, right, Like I can see way
more folks being like I don't have that much money
in cash. I've got all these other options for me
to to tap, you know, if if I do have
an emergency where I can tap those funds. But you know,
(11:06):
given the current state that things are in right now, yeah,
cash is king, and I wanted to mention that two thousand,
four hundred and sixty seven dollars that's not a number
that we came up with. This is a number that
a bunch of researchers the line would have been two thousand.
So off you love that it seem like you're getting
a deal exact, but researchers have decided that that is
the dollar amount that a lot of people need to
(11:27):
have in order to whether some of these smaller hurdles. Obviously,
given the context, given the environments that were in currently,
I would venture to think that two four six seven,
how that may not even be enough, you know, Like
I know for us our family, like we're kind of
aiming for closer to six months in our emergency fund
right now, just to whether the uncertainty ahead of us,
like we don't exactly know what the economic landscape is
(11:48):
gonna look like, we don't know what our health is
gonna look like. I'm self employed, and so my income
isn't ever a guaranteed thing, and so I know, for us,
having more margin there definitely gives us a little more
piece of mind. And another reason too, you know that
is good to have maybe a fatter emergency fund sitting around,
is due to medical costs. A lot more folks are
getting sick. After all. This is, you know, first and
(12:09):
foremost a health crisis, So make sure that you have
some extra funds set aside to handle whatever your co
pay or your out of pocket maximums, you know, whatever
they might be, and not just for you, but for
everyone you're responsible for, for your entire family. Although that
being said, we wanted to mention that the good news
is that some of the major insurance companies out there,
like Etna, Signa and Humana, they all said that they
(12:30):
are going to be waving the consumer costs associated with
COVID nineteen treatment. So if you're with one of those providers,
you can at least have that to kind of fall
back on, yeah, emergency fund, making sure you have that
bare minimum, and then expanding on that to making sure
you have hopefully months worth of expenses on hand in
an online savings account that pays you a decent rate
of interest, And by decent rate of interest, it's really
not that much these days, you know, we've seen the
(12:52):
savings account rates plummeting as a FED has cut their rate,
and you know what, it's just tough time out there
for savers as well. How for the next thing we
would suggest that you do with the lump sum of
money is to make sure that at minimum you're getting
the company match inside of your retirement account. It feels
like a tough time and for investors, but in actuality
for all of our younger listeners, for anybody out there
(13:13):
in the wealth building phase of their life, this is
the best time for you to be investing and so
taking some of that money to ensure that you're at
least at minimum getting your company match in your four
oh one K Well, that's free money and you definitely
need to make sure you're taking advantage of that. There's
nowhere on earth that you're able to double your money
or with some companies get like that fift return, So
(13:33):
make sure you're taking advantage of it. Don't miss out.
By the way, we are hearing from more and more listeners,
and we're seeing that more and more companies are taking
away the matching benefit during this time. But don't fret
because as things get back to normal, those four one
came matching benefits will be reinstituted. They are a key
cornerstone of benefits the companies offer, and they're able to
retain top talent by offering matching retirement account benefits like this.
(13:56):
So yeah, just if you don't have it for the
time being, don't worry. In all lihood you're gonna have
it back in the near future. And if you still
do have matching, make sure you're not missing out on it. Joel,
I'm top talent. How come I've never had a company match? Uh?
Your your company is not very generous, dude. That is
because your company is you. Yeah, you, well, you and
me as well. We got the little podcast here, but
(14:16):
we don't make enough money to have fancy benefits like that. Well,
at least we get to drink here on the job, right,
That's true. That's a sweet little perk that you and
I have instituted. We don't have company matches yet on
our fur oh one case, through the podcast, no HR
person to tell us, no, you know, HR person to
tell us that, like, no, you shouldn't be drinking while podcast.
But you and I we responsibly enjoy a craft beer
and that's definitely a perk that we enjoy of what
(14:38):
we get to do here, man, But I couldn't agree more.
After an emergency fund, you know, making sure that you
are getting that four one K match, that is always
going to be your next order of business. But after that,
you want to look too, high interest debt, like to
pay off high interest loans or credit card debt. A
good rule of thumb is to look for interest rates
that are about maybe five percent higher than the current
(14:59):
ten year trail is rer rate. So what that means
for today is that you want to pay off any
debts that are about six percent or higher. And the
reason for that is the likelihood of you, you know,
being able to earn more than that currently in the market,
it's pretty slim. However, there is a caveat here. In
a normal economy with stable employment, ditching high interest rate
debt it is going to be one of the first
(15:20):
moves that you should make because it's near impossible to
invest your money and get an eighteen percent return right
unless you buy into those infomercials on TV or bitcoin
or tesla, you know that one time that people say
about bitcoin, and so you do get that sort of
return by paying down credit card debt. But right now,
it's a time of intense instability, and as we discussed earlier,
when we're talking about emergency funds, cash on hand becomes
(15:42):
even more meaningful and important than it normally would be
during these times. Yes, so paying down high interest rate debt, Matt,
We're all about it. But if it comes at the
expense of your emergency fund and you're not gonna have
enough cash on hand to at least have that minimum
of two thousand, four d sixty seven bucks on hand,
then we would say hold on to that money to
(16:03):
make sure you have a little bit of patting. And
the next place you want to prioritize putting that stimulus
money putting your tax refund is other retirement accounts. So
next look to hs A s roth iras your four
one K, putting it even more above and beyond that
matching contribution, and also taxable brokerage accounts. If your job
is solid, you've got solid savings, start investing more. Now
(16:24):
is a great time to be investing even more of
your money and take advantage of the tax breaks associated
with funding these accounts too. It's unfortunate right that our
economy is at such a low point, But if you
have been saving diligently for quite a while, and you
have this cash on hand and you you you've basically
been saving for rainy day, really really well, this gives
you a greater flexibility to be able to invest even
(16:46):
more for the long haul, even more for your future.
And you're doing so at a time too, while the
market is on sale, and that makes it an even
better move. So, yeah, the more you can invest, but
invest from a position of strength, then we would say
go for it. A few weeks ago, you know, I
discussed how we were both you know, looking to invest
a lot of money in our retirement accounts into our
(17:06):
roth iraise making sure are we could clarify them a
lot of money doesn't mean millions. We're talking about thousands,
hopefully talking about the maximum roth iireum out which six
thousand dollars. Right, But like that's something that Kate and
I did and like, honestly, man, like warm buff gonna
buy a company right now, that company is undervalued. I'm
going to purchase that entire company. Now we're talking about
(17:26):
stocks that are in index funds, started talking about hundreds
of different companies right, like we mentioned weeks ago, Like
this is something that Kate and I have done, and
I hope I don't regret it. I do think it
was a wise move, right given given the circumstances. But again,
we just don't know where the economy is going. We
don't know what our personal situation is going to look
like nobody does. And so that is why cash is
(17:47):
so important. That's why an emergency fund that's fully stocked,
you know, like we're talking, you know, maybe six months
or even more worth the living expenses covered. So we
know a lot of folks are looking to be opportunistic,
they're wanting to buy while the markets down. But at
the same time, make sure that you are on more
than solid footing. Let's make sure that you're gonna be
able to weather the storm and come out on the
(18:07):
other side unscathed. Well, Matt, if it turns out you
made a bad move, I've got some money buried in
the backyard that you can have access to. Just put
me out that metal detector and I can find that
that gold bullion exactly. I'll give you the treasure map
some hunting. I would love that. That sounds like fun.
So what we've talked about so far as far as
what to do with our money. Has been a very
mathematically correct, like logical approach. Right as as far as
(18:28):
what you should do, we're kind of talking through like
the flow chart almost of how you need to you know,
have an emergency fund, how to get that company match
paid on high interest debts, like all those sorts of things. However,
after the break, we're gonna talk about some more maybe
value driven ways to spend that money, ways to appropriate
that money, and we'll get to that, yeah, right after
the break. All right, Matt, we're back. We're talking about
(18:55):
what to do with your stimulus money, what to do
with your tax refund. And we did just cover a
lot of, you know, an important personal finance stuff, but
let's kind of take a moral philosophical angle on this too.
And that's something I think probably we include a little
bit here and there, but it's not the tact that
we take frequently, but I think it's important that we
do bring this up, especially on today's episode. And so
(19:16):
what about giving your money away? What about giving away
a portion of this stimulus money or your tax refund?
And so, Matt, we've talked about this before a long
time ago. I'm sure I don't know early on in
the podcast about how to give your money away, and
that's something that we feel strongly about that the more
money we give away that we donate, the more resources
that we bring in that we used to help other people.
(19:36):
It helps create a healthy detachment from our money, and
it also gives us a chance to see that the
money that we have can make an impact that's bigger
than ourselves. And a tiny little side benefit is that
giving money away to nonprofit organizations also gives us a
tax break. Two. But while the tax break is nice,
that's not why we do it. We truly believe that
if you've been fortunate and you've been given more than
(19:57):
you need, that it's important to give some of wealth away. Yeah, well,
just the very act of giving our money away, it's
just a good practice for us to develop. Right. Our
show it's called How the Money. It's all about money,
and while it is so important in our lives, personal
finance it's a big deal because they can have a
big impact on how you spend your life if you
understand the principles behind a personal finance right. However, that
(20:18):
doesn't mean seeking after lots of money or or having
that be kind of our you know, be all, end
all focus for that to be something that we're trying
to amass. That's not part of the philosophy of our show, right, Like,
that's not how you and I approach money personally. And
the reason we talk about giving our money away is
because we do feel that it is an important aspect
of personal finance. Right. Personal finance isn't just about making
(20:38):
sure that you get the best deal, making sure you're
earning as much as possible at work, making sure that
you know how to invest it, but also has to
do with making sure that we're being thoughtful and generous
when when it comes to others, especially, you know, to
others in need. Yeah, we don't want to have that
Scrooge McDuck mentality, right, and be like swimming in our
money when other people around us are in need and
we could use that money really well. And so yeah,
on that note, Matt, the question has been asking our
(21:00):
holes have been written about what to do with your
stimulus money and whether there's a moral obligation on our
part to use it well and to give it some
of it away. So do people who don't need this
individual stimulus check have any sort of obligation to give
some of this money away. I appreciate the heart in
that question, and so when I first heard about these
checks being sent out to all Americans, I kind of
(21:20):
had this similar thought that, well, why am I getting
a check for my family when we don't really need it.
It feels a little weird. I hated knowing that a
family like ours, who still gainfully employed at the same time,
would be getting money when potentially a third of Americans
might be out of work. Right, So I would say
that if you want to give a portion or even
all of your stimulus check away to a nonprofit, then
(21:43):
do it. If you're unsolid financial footing and you can
afford to give all that money away, I think that's admirable.
And at the same time, many nonprofits are feeling the
pain in this downturn too. They're also acutely hit by
the economy going into a tailspan. So, but the one
thing I would caution is to not do it out
of guilt. I think sometimes that can be a purely
reactionary thing, and we might decide that we want to
(22:05):
give it away because we feel guilty. But I don't
think we should feel guilty about this stimulus money. And
I don't think we should feel guilty about a tax
refund and give out of guilt. But I think if
we give from a good place, a good heart, then
we of course would encourage giving. Yeah, And our goal
also isn't too guilt trip anybody for not feeling guilt
for receiving their stimuluship. Right, some people like I haven't
(22:26):
even thought about it, like that don't even crossed my mind.
I was just like, who, well, I mean, here's the
thing is that hopefully nobody feels any guilt right or
sense of shame for receiving their stimulus check. And of
course there shouldn't be any emotions at all aside to
you receiving like your tax refund check. And so maybe
a healthy way to think of your stimulus check specifically
is this right? Think about it as if essentially the
(22:46):
government is saying that they think that you know how
to best use and spend that money in your corner
of the universe. Maybe in your specific neighborhood you can
see who needs help better than the federal government can.
Like this makes sense there in Washington. You are on
the ground, live on your street, you know, in your neighborhood.
Now you see the businesses, the families that are hurting
right by you exactly. So if you see a need,
if you know of someone or someplace in particular restaurants,
(23:09):
you know that need help, then that should direct where
your money goes. If if you're unsure of what to
do with that money, just look around look for the need,
because that will allow you to be efficient and to
put that money towards you know, businesses and individuals effectively,
while also you know, you know that you'll have a
sort of an altruistic heart behind that giving or spending. Yeah, man,
I think it is important to note what the intention
(23:31):
behind these stimulus payments are. The government has set up
a lot of aid for small businesses, The government has
set up a lot of aid for people who are unemployed.
The Cares Act has also provided relief for people and
their student loans and said you don't have to pay
for six months. So there is a lot of specifically
targeted money going out towards the people in the greatest need.
(23:51):
But these stimulus payments were specifically created in order for
individual Americans to feel like they had the ability, the
extra ability to spend more in this time. That's because
of the American economy is driven by consumer spending, and
so the fact that it feels like free money from
the government that actually incentivizes our behavior. They want us
(24:11):
to think of it like free money, and they want
us to go and spend it. So buying goods and
services from your favorite nearby business is a good use
of this money. And so I would say, because of
that intention, because of the thought process behind sending this
money to you know, most Americans, that you shouldn't feel
undeserving of the funds from this bill, and if you
(24:31):
don't necessarily need it, giving it away, supporting local businesses,
those are great places to put it. But also because
of that intention, you shouldn't feel guilt and shame. Yeah,
And you know, on a practical note, under normal economic conditions,
we've discussed our dislike for gift cards, but given the
crisis that we're in, they have actually become a fantastic
way for us to support our local businesses. We currently
(24:53):
have more gift cards than we have ever had in
our entire life, except for maybe when Kate and I
got married, Remember like when you get married, Yeah, gets,
I don't know, gift certificates, gift cards they kind of
like show up you have like a bulging zip like
bag of gift cards at that point in time exactly.
But but since then, this is an all time high
for us. But also that's not the only way that
you can directly help local businesses. Go fund me. They
(25:13):
have a page where you can go and you can
search for local businesses to support, and you can just
do that by entering your zip code will link to
that page in our show notes, Man, I love this
direct approach and it's a great way for you to
help businesses while keeping it local as well. You know.
Plus it keeps me from from getting too much weight
because how much takeout is gonna be too much takeout?
Like I sort of feel this this pressure as a
(25:36):
citizen of my local community to support all of all
my favorite establishments. But we don't normally eat out nearly
this much, and so you know, being able to delay
some of that through gift cards or being able just
to send some of that money directly to some of
these restaurants in particular, Man, has been a great way.
Actually hopped on there. I saw one of our favorite
local places, the Earl. They're at the top of the
list right there, and a lot of folks are chipping in, uh,
(25:57):
and they're really close to meeting their goal. It's really
happy to see that. It's one of our local favorite
spots to go see an awesome show. Right. It's a
little gruny, maybe a touch CD, but they've also got
a really good burger, especially ceed when you're there. Yeah,
let alone if you and I both show up. So
many shows are through the years. It's such a good place.
So yeah, those establishments that have a special tie to
(26:18):
your heart, that you have a special relationship with, those
are the places we should be specifically targeting and supporting
in this time. That's right, man. It's not just about
investing and being smart with our money, but we also
want to make sure that we're kind of spending it
and putting it towards things that matter to us. Yes,
so really the last thing to say. We talked about
giving it away. We talked about the moral dilemma, and
I think typically what we would say to someone who
(26:39):
does come into some sort of windfall money Matt right,
is whether it's a tax refund or the stimulus check
in normal times, we would say, take ten percent of
it and blow it, like, have fun with at least
a portion of it, because in part prioritizing today over
your future isn't bad, right, That's a huge part of
the ethos behind the show. That's right. We want to
enjoy the moment. We want to enjoy what we have.
(27:02):
We want to enjoy the craft beer in front of
us while we're saving well for the future. And I
feel like for our listeners in particular, who are in
a really good financial spot, who have their savings ducks
in a row, who are able to continue to invest
during this downturn and it's actually going to make them
wealthier over the long term. Well, it almost feels like
a bit of a civic duty right now, right that
(27:23):
we should be spending and supporting the businesses we love
the most. I don't think we can feel comfortable across
the board telling everyone to go out and spend all
that stimulus money. But for yeah, some of our listeners,
that is going to be the best way that they
can use it by spending and giving it away. And again,
you're not talking about spending that entire amount, like you know,
you just said ten percent. I think if we can
spend a small portion of this windfall towards something that
(27:46):
we feel like is more of a splurge. Um, then
that's a that's a healthy thing to do with your money.
And it's it's a double win, right, It's a win
win situation if you can splurge and spend that money
on a company that you want to support. I know,
for me personally, I've been eye in this bice cold
made by this American company called Salsa Bicycles. Have you
ever heard of them before? No, But it doesn't sound
like an American company. It sounds like a South America company.
(28:08):
It's like the South of the Border bike. No. That
makes some some really amazing bikes. Uh. And I've kind
of been I you know, I've I've been talking about
this for a year. I'm sure our listeners are like,
just buy the stupid bike, du But I tend to
over research and take my time with these kind of purchases.
But I'm hoping to kind of siphon a portion of
that money towards a bike that I ride by myself.
You know, We've got the cargo bike where the kids
(28:28):
can ride on it, but I don't really have a
solid multi speed bike that I can ride around town
kind of go places on my own without you know
this giant cargo area behind me at the seventy pound
bike that you're hauling is so heavy, and I don't
have like the easist either, so it's all it's all muscle. Um.
I enjoy right in that bike around with the girls,
but sometimes I just want to go out there by myself.
So I'll keep you posted if I actually pull the trigger.
(28:50):
I'll check out their bikes too. I've never heard of them.
But enough about me, man, let's talk about Joel. Have
you thought any about what you might put some of
your stimulus check towards. I like eating out more than
you do, so definitely more of my money is going
to go towards that, continuing to support the restaurants we
love and care about the breweries too. So yeah, I
haven't thought of any bigger ticket items yet, but we'll see.
I don't know. I'll talk it over with with Emily.
(29:11):
Maybe will come up something. Oh well, I haven't talked
about the bike with Kate, so she's like, wait to
present alright, as a family. How about that? All right?
That works too? That works too, all right, Matt. Well, yeah,
speaking of breweries, we're drinking a beer from one of
our favorite local breweries Today on the show. The beer
that we had was Space Lettuce. It's a double. I
p A from our buds at Monday Night. What was
(29:31):
your take on this beer? Man? Man? This is such
a good, like classic I p a. Uh, Space Lettuce
is quickly becoming one of my favorite go toos now
that Monday Night is caning this beer. I don't I
don't think they're doing it year round, but they're doing
it fairly regularly. I'll say that, and I'll say, there's
so much in a name. So this beer is called
space Lettuce, and I feel like like the lettuce makes
(29:52):
me think of cabbage, which then makes me think of
like stinky hops, you know what I'm saying. And so like,
as I drink this beer, it kind of makes me
think that this beer is good. Me like, like like I'm
eating my veggies. You know what I'm gonna go with that?
You like that? Yeah, that's at least one serving of vegetables. Absolutely,
And so I feel like this is a really well
balanced beer. This is a double. So this isn't one
that you can or maybe should drink every day, but
(30:14):
at least once a week, I feel a nice craft beer.
It's all right to kind of dip your toes into
the double I P A water and get something that's
a little bit bigger. I really like this beer. Um,
this is when I know that you and I both
we have we've got a bunch of these in our fridge. Yeah,
because it's such a good go to solid It's so good, dude. Yeah.
So I think this is in my mind, kind of
in between the old school style of I P A
and the new school style nice. It's a mix of
(30:34):
juicy and sticky. It's got this clear, pale orange color. Man.
I think it's got these intergalactic flavors that then I'm
a huge fan of. So yeah, space Lettuce for Monday Night.
If you see it on shelves at your grocery store
or package store, you should totally pick it up. Yeah,
and we've done a beer giveaway with them before. Look
for one of those coming up here in the future.
We'll we'll have to swing by there, grab a bunch
(30:55):
of their cans and yeah, we'll do another one of
those giveaways to to one lucky listener out there. What's
better and free beer? Very little? Yeah, I can't pick
of anything around off the top of my head. But
all right, Matt, that's gonna do it for this episode.
And for folks who want to read the show notes
that we have, well those are up at how to
money dot com. And if you are listening to this
episode and you know somebody who might need a little
help with their their personal finances, maybe they need some
(31:18):
direction as to what they should be doing with their
stimulus check or their tax refund in addition to the
rest of their personal finances, send them our way. We
would be honored if you you told a friend, told
someone you know about our podcast how to Money. Sometimes
it can be kind of awkward and it can be
weird to talk to somebody else about their money. Uh
that's where a third party like us can can play
(31:39):
a role. You know, this this podcast can be something
that you both talk about and you don't have to
get all up in their business. If your friends Sally
or Jim is terrible with money, you don't have to
tell them that they're terrible. You can just be like, oh,
just listen to this podcast with Matt and Joelan. You know,
I think I can help. But if it's harder to
have that one on one combo, yeah, absolutely, man, all right,
that's gonna be it for this episode until next time. Buddy,
best Friends Out, best Friends Out m
Welcome to How the Money. I'm Joel and I and Matt,
and today we're discussing what to do with stimulus checks
and tax refunds. That's right, Joel, We're going to talk
(00:28):
about what to do with a little infusion of cash
into our bank accounts. Man. But first we wanted to
acknowledge that while we talk about personal finances and money
every episode, a lot of individuals have lost their lives
due to the coronavirus. Hopefully the worst is behind us,
as it looks like we may have hit our peak
last week. But our hearts go out to all the
(00:51):
individuals whose health has been impacted by this virus, and
we feel for the families who have suffered losses. And
we're thankful for everyone who is putting their lives at
risk right now as well, all the nurses, all the doctors,
all those who have essential jobs keeping food on the shelves,
first responders, keeping us safe. We're thankful for all of
you out there as well. Yeah, man, I think we're
(01:11):
all so ready to be done with this virus and
hopefully we're out of the wood soon on the health
side of this, But you know, the money side is
another thing. That's had an impact, and and it has
been getting worse and worse as the unemployment numbers go
up and and the stimulus build. These stimulus checks that
we should be starting to to receive in our accounts
any day now, those are going to have a major
(01:31):
impact on our ability as individual Americans to weather this
storm and to stay financially solvent. And of course the
negative financial impact is all because of this virus that
we just can't control, which is which is just a
weird place to be in. Yeah, man, so weird. Hopefully
these checks, along with the other stimulus measures that were
part of the Cares Act, will will allow our economy
to bounce back, right, Like this is something that some
(01:53):
of the different economists are pointing to, like that they're
they're talking about the shape of the rebound. I don't
know if you've seen some of those articles you versus
V or yeah, you versus the V. Yeah, the different
letters of the alphabet letter not exactly. Well, that's what
they're saying, like you or a V sort of shape
is that's ideal, right, because that means we're kind of
bouncing back pretty quick. A w is is is if
we basically have like a second wave, like another cycle
(02:17):
of people getting sick of the economy going through a
rough patch, and that's kind of, uh, you know, not
ideal situation. And they they're talking about l how that's
like the worst case situation. It's pretty basically where it
drops and then you know, that's kind of world we've been.
And then if it sits there for you know, for
the foreseeable future, hopefully that won't be the case, right
with these different economic measures that have been taken. Between
(02:38):
that and hopefully getting a better hold and better control
over the virus and how to treat it in ways
that we know that we should most definitely be taking precautions. Now.
I feel like early on, a lot of folks, you know,
like they're still you know, going on the belt line.
Like that's something here in Atlanta where there's just tons
of folks, in particular young folks just kind of out
and about, still living their life, hanging out on patios
with their friends. But everyone is very well aware of
(03:01):
the dangerous to that, and I mean it's basically illegal now,
like Atlanta's under lockdown. And maybe that's like a little
too long, but you know, we certainly have seen how
that's now necessary and how that's a good thing. Yeah,
and Matt, we're gonna get into kind of how people
should think about this money being you know, transferred to
their bank account essentially. And we realized too, it's April fifteenth.
That's typically tax Day in the US. Not so this year.
(03:24):
It's hyper rare to have tax Day not beyond April fifteen.
It's been pushed back three months, which is good news
for people who especially oh the I R s and
need to keep more cash in their pockets. But traditionally
April tax Day, and what that normally means is that, yeah,
you're gonna a lot of folks do get a check
in the mail completely not in the mail, it just
shows up in your bank account, right. Yeah, So we're
gonna talk about what to do with that. But Matt,
(03:45):
first we should mention the beer that we're having on
the show today. We're drinking Space Lettuce by Monday Night
Brewing and this is a double I P A from
from our friends just around the corner. Yeah, Man, we've
had several of their beers on lately, and that's in
an effort to make sure that we're supporting our local brewery.
They're one of our favorites. If you've never had a
money Night brewery and you are in the Southeast, let
them up and see if you can get your hand
(04:05):
on some of their beer. All right, Matt, let's get
onto the subject at hand. We've already kind of been
introducing it and talking about it, but we're talking about
what to do with stimulus checks and tax refunds, and
there are two big windfalls that might be hitting our
accounts any day. Some people have filed their taxes early,
they have received a tax refund already. That's me, I
already got my refund. Well's you haven't spent it already yet.
(04:25):
Right now, you're waiting for this episode to come out
to know what to do with your money. I have
to wait and defer to myself. But for most people,
it's typically just once a year that they experienced a
lumps on payment like this, and the typical tax refund
is about three thousand bucks. And with the addition of
the stimulus checks being sent to most individuals and households
across the country, we're looking at more of a windfall
(04:46):
than normal, and there's more opportunity for us to potentially
handle this poorly, So what should you prioritize with that money? Well,
we've got some thoughts. All the part of it depends
on your specific situation. We will discuss a lot of
nuance in today's episode for kind of how different people
who have different varying factors in their lives, like how
how they should consider this money as it flows into
their account and how they should be handling it. Yeahual receiving,
(05:09):
you know, a large windfall like this, a little cash
infusion of money, it doesn't happen all that often, so
it's no surprise that we're not at all that create
at doing something smart with that money. So must of
just think of it as just a bonus check that
we should spend like a percent of it. And for
for people who diligently prioritize saving and investing like all
(05:29):
throughout the year, that might be okay. But for most people,
a more thoughtful approach is going to be in order.
We don't want to blow the easiest chance we get
to start an emergency fund or paid down some of
our pesky high interest rate debts and all the tax
refund front, it's important to question whether or not we
should be getting you know, any money at all. You know,
a lot of people are used to giving that tax
(05:50):
refund check, but ultimately it's not ideal because it is
kind of in essence in interest free loan that we're
giving to the government, We're letting them hold our money
the entire year and then they give it back to us.
And so if you are one of those people who's
receiving several thousand dollars back this year after you filed
your taxes, well it might be time for you to
make some adjustments to your tax withholding. The goal should
(06:10):
be to not receive a refund or to receive a
very very small refund. And so if that's not the
case for you, well you can run some calculations and
figure out what adjustments you need to make via the
I R S Tax withholding calculator. Estimator will link to
that in our show notes. But man, if we make
those adjustments, it allows us to keep more of our
earned income in our pockets every single month, as opposed
(06:31):
to getting this one big check and kind of figuring
out what to do with it. It can allow us
to save throughout the year, as opposed to getting this
windfall sum of money that's not necessarily ideal because often
when we get that windfall sum of money, the emotional
effect is like, cool, it's it's found money and I
can do whatever I want with it. But if it's
kind of money that trickles in every single month, I
feel like we're a little more judicious with it. Typically,
(06:52):
that's that hard earned money that you've earned yourself versus this, yeah,
freebe that you get from the government. It's not a freebee,
but it feels like it. Yeah, well, at least not
in the sense of your tax refund. Obviously, the stimulus
check is meant to feel more like that. We'll get
to that later in this episode. And Jel, you mentioned
adjusting your withholdings. You know, some of the reasons or
instances when you would want to make some of those
adjustments might be when you get married, maybe if you
(07:13):
have a kid, maybe you've picked up a second job,
like if you've got a side hustle that you're starting
to make and come from, or maybe if you've lost
your job and you've been unemployed for the year. I mean,
a lot of people are going to be in that boat.
And so you know, if you're listening to this and
you're collecting that unemployment check, there's a good chance that
it's not the same amount that you were making before,
and so making some adjustments to your withholding might make
(07:35):
sense in order for you to to not receive one
of these quote unquote massive bonuses next year around tax time.
But for most of our listeners, they probably are in
the position like most America, that they are getting the
small windfall from taxes, and even if they're not, even
if they're smart and have done their withholdings well, many
of them will be getting this this stimulus check depending
on how much money they make, because it phases out
the more money you make. But a lot of our
(07:55):
listeners will be getting that stimulus check, and so either way,
there's some sort of windfall coming to to most listeners.
So we do have to kind of talk about how
people handle that. Yeah, man, that's so true. That's the
reality that we're in right now. Some of us are
receiving tax refund checks and a lot of us, if
not most of us, are going to receive a stimulus
check as well. So we still need to discuss how
to approach this lump sum amounts of money showing up
(08:16):
and we're gonna get to our thoughts on that right
after the break. All right, we're back. We're talking about
stimulus checks and tax refunds and matt Before we get
into all the good things that the people can do
and should do with their stimulus money and their tax
(08:37):
refund what, in your opinion, is like the dumbest thing
they can do with it? Good question. The first thing
my mind goes to is like going to Vegas and
like putting them on like slots. However that supports the
local economy there. It actually doesn't sound like that dumb
of a thing. And lighting it on fire was the thing.
I lighting it on fire, you know, maybe you actually
ran out of TP at home. Would be a poor
(08:59):
use of all our bills. Burying it in the ground.
Over the course of history, that's always been like a
terrible thing to do. Someone's gonna find it. Take it.
Every want to bury in the field, You're gonna be
in their backyard. With the middle detector, you're gonna find,
You're gonna find their loose change, all that kind of stuff.
Although I have heard of folks doing that before. Like
if you've got a large parcel of land, maybe maybe
burying the uh the one else gold coins at different
spots around the property. That's real life for some people. Yeah.
(09:21):
Not the smartest move, though, So let's get into the
actual smart moves that people should make and and what
they should be doing with their stimulus money and their
tax refund. We would say the first thing to prioritize
is cash in an emergency fund. Even people who feel
like they might have the most stable job in the
world right now, well they could be just a Zoom
call away from being let go from their position. Yeah.
(09:42):
And if you didn't already have a serious dislike for
for Zoom by this point, like that would be the
final nail in the coffin. Right, Privacy issues I could
deal with, But I got fired over that service, so
I'm done with it. Yeah. And at least having two thousand,
four hundred and sixty seven dollars set aside, that's kind
of the amountain mat that uh you have hold in
on as the amount that people should aim for, at
(10:03):
least as a beginner emergency fund. Having that money set
aside to handle the bumps in the road that will
come to you financially inevitably is advisable. But a few
months of living expenses set aside is even better. And
since we are in an economic recession, we're in a downturn,
cash is even more valuable now than it otherwise would
be right. It can help you pay rent or your mortgage,
and can keep stress at pay. So in times like this,
(10:25):
cash is most definitely not trash. We would suggest that
having a padded emergency fund, having that money set aside
for expenses that you might not be able to cover
in the case of a job loss, that is definitely
one of the number one priorities right now. Well, I
like that cash is not trash. Should coin that some
people hay cash to trash, but because of like recurring
expenses that we always have that all of us have,
(10:45):
I just don't understand that mentality, Like I'm not in
love with cash. I mean, they're obviously we love investing
and buying rental properties and investing in the stock market,
but there's a need for cash to certainly. Man, Well,
it's all about context, right, Like I can see way
more folks being like I don't have that much money
in cash. I've got all these other options for me
to to tap, you know, if if I do have
an emergency where I can tap those funds. But you know,
(11:06):
given the current state that things are in right now, yeah,
cash is king, and I wanted to mention that two thousand,
four hundred and sixty seven dollars that's not a number
that we came up with. This is a number that
a bunch of researchers the line would have been two thousand.
So off you love that it seem like you're getting
a deal exact, but researchers have decided that that is
the dollar amount that a lot of people need to
(11:27):
have in order to whether some of these smaller hurdles. Obviously,
given the context, given the environments that were in currently,
I would venture to think that two four six seven,
how that may not even be enough, you know, Like
I know for us our family, like we're kind of
aiming for closer to six months in our emergency fund
right now, just to whether the uncertainty ahead of us,
like we don't exactly know what the economic landscape is
(11:48):
gonna look like, we don't know what our health is
gonna look like. I'm self employed, and so my income
isn't ever a guaranteed thing, and so I know, for us,
having more margin there definitely gives us a little more
piece of mind. And another reason too, you know that
is good to have maybe a fatter emergency fund sitting around,
is due to medical costs. A lot more folks are
getting sick. After all. This is, you know, first and
(12:09):
foremost a health crisis, So make sure that you have
some extra funds set aside to handle whatever your co
pay or your out of pocket maximums, you know, whatever
they might be, and not just for you, but for
everyone you're responsible for, for your entire family. Although that
being said, we wanted to mention that the good news
is that some of the major insurance companies out there,
like Etna, Signa and Humana, they all said that they
(12:30):
are going to be waving the consumer costs associated with
COVID nineteen treatment. So if you're with one of those providers,
you can at least have that to kind of fall
back on, yeah, emergency fund, making sure you have that
bare minimum, and then expanding on that to making sure
you have hopefully months worth of expenses on hand in
an online savings account that pays you a decent rate
of interest, And by decent rate of interest, it's really
not that much these days, you know, we've seen the
(12:52):
savings account rates plummeting as a FED has cut their rate,
and you know what, it's just tough time out there
for savers as well. How for the next thing we
would suggest that you do with the lump sum of
money is to make sure that at minimum you're getting
the company match inside of your retirement account. It feels
like a tough time and for investors, but in actuality
for all of our younger listeners, for anybody out there
(13:13):
in the wealth building phase of their life, this is
the best time for you to be investing and so
taking some of that money to ensure that you're at
least at minimum getting your company match in your four
oh one K Well, that's free money and you definitely
need to make sure you're taking advantage of that. There's
nowhere on earth that you're able to double your money
or with some companies get like that fift return, So
(13:33):
make sure you're taking advantage of it. Don't miss out.
By the way, we are hearing from more and more listeners,
and we're seeing that more and more companies are taking
away the matching benefit during this time. But don't fret
because as things get back to normal, those four one
came matching benefits will be reinstituted. They are a key
cornerstone of benefits the companies offer, and they're able to
retain top talent by offering matching retirement account benefits like this.
(13:56):
So yeah, just if you don't have it for the
time being, don't worry. In all lihood you're gonna have
it back in the near future. And if you still
do have matching, make sure you're not missing out on it. Joel,
I'm top talent. How come I've never had a company match? Uh?
Your your company is not very generous, dude. That is
because your company is you. Yeah, you, well, you and
me as well. We got the little podcast here, but
(14:16):
we don't make enough money to have fancy benefits like that. Well,
at least we get to drink here on the job, right,
That's true. That's a sweet little perk that you and
I have instituted. We don't have company matches yet on
our fur oh one case, through the podcast, no HR
person to tell us, no, you know, HR person to
tell us that, like, no, you shouldn't be drinking while podcast.
But you and I we responsibly enjoy a craft beer
and that's definitely a perk that we enjoy of what
(14:38):
we get to do here, man, But I couldn't agree more.
After an emergency fund, you know, making sure that you
are getting that four one K match, that is always
going to be your next order of business. But after that,
you want to look too, high interest debt, like to
pay off high interest loans or credit card debt. A
good rule of thumb is to look for interest rates
that are about maybe five percent higher than the current
(14:59):
ten year trail is rer rate. So what that means
for today is that you want to pay off any
debts that are about six percent or higher. And the
reason for that is the likelihood of you, you know,
being able to earn more than that currently in the market,
it's pretty slim. However, there is a caveat here. In
a normal economy with stable employment, ditching high interest rate
debt it is going to be one of the first
(15:20):
moves that you should make because it's near impossible to
invest your money and get an eighteen percent return right
unless you buy into those infomercials on TV or bitcoin
or tesla, you know that one time that people say
about bitcoin, and so you do get that sort of
return by paying down credit card debt. But right now,
it's a time of intense instability, and as we discussed earlier,
when we're talking about emergency funds, cash on hand becomes
(15:42):
even more meaningful and important than it normally would be
during these times. Yes, so paying down high interest rate debt, Matt,
We're all about it. But if it comes at the
expense of your emergency fund and you're not gonna have
enough cash on hand to at least have that minimum
of two thousand, four d sixty seven bucks on hand,
then we would say hold on to that money to
(16:03):
make sure you have a little bit of patting. And
the next place you want to prioritize putting that stimulus
money putting your tax refund is other retirement accounts. So
next look to hs A s roth iras your four
one K, putting it even more above and beyond that
matching contribution, and also taxable brokerage accounts. If your job
is solid, you've got solid savings, start investing more. Now
(16:24):
is a great time to be investing even more of
your money and take advantage of the tax breaks associated
with funding these accounts too. It's unfortunate right that our
economy is at such a low point, But if you
have been saving diligently for quite a while, and you
have this cash on hand and you you you've basically
been saving for rainy day, really really well, this gives
you a greater flexibility to be able to invest even
(16:46):
more for the long haul, even more for your future.
And you're doing so at a time too, while the
market is on sale, and that makes it an even
better move. So, yeah, the more you can invest, but
invest from a position of strength, then we would say
go for it. A few weeks ago, you know, I
discussed how we were both you know, looking to invest
a lot of money in our retirement accounts into our
(17:06):
roth iraise making sure are we could clarify them a
lot of money doesn't mean millions. We're talking about thousands,
hopefully talking about the maximum roth iireum out which six
thousand dollars. Right, But like that's something that Kate and
I did and like, honestly, man, like warm buff gonna
buy a company right now, that company is undervalued. I'm
going to purchase that entire company. Now we're talking about
(17:26):
stocks that are in index funds, started talking about hundreds
of different companies right, like we mentioned weeks ago, Like
this is something that Kate and I have done, and
I hope I don't regret it. I do think it
was a wise move, right given given the circumstances. But again,
we just don't know where the economy is going. We
don't know what our personal situation is going to look
like nobody does. And so that is why cash is
(17:47):
so important. That's why an emergency fund that's fully stocked,
you know, like we're talking, you know, maybe six months
or even more worth the living expenses covered. So we
know a lot of folks are looking to be opportunistic,
they're wanting to buy while the markets down. But at
the same time, make sure that you are on more
than solid footing. Let's make sure that you're gonna be
able to weather the storm and come out on the
(18:07):
other side unscathed. Well, Matt, if it turns out you
made a bad move, I've got some money buried in
the backyard that you can have access to. Just put
me out that metal detector and I can find that
that gold bullion exactly. I'll give you the treasure map
some hunting. I would love that. That sounds like fun.
So what we've talked about so far as far as
what to do with our money. Has been a very
mathematically correct, like logical approach. Right as as far as
(18:28):
what you should do, we're kind of talking through like
the flow chart almost of how you need to you know,
have an emergency fund, how to get that company match
paid on high interest debts, like all those sorts of things. However,
after the break, we're gonna talk about some more maybe
value driven ways to spend that money, ways to appropriate
that money, and we'll get to that, yeah, right after
the break. All right, Matt, we're back. We're talking about
(18:55):
what to do with your stimulus money, what to do
with your tax refund. And we did just cover a
lot of, you know, an important personal finance stuff, but
let's kind of take a moral philosophical angle on this too.
And that's something I think probably we include a little
bit here and there, but it's not the tact that
we take frequently, but I think it's important that we
do bring this up, especially on today's episode. And so
(19:16):
what about giving your money away? What about giving away
a portion of this stimulus money or your tax refund?
And so, Matt, we've talked about this before a long
time ago. I'm sure I don't know early on in
the podcast about how to give your money away, and
that's something that we feel strongly about that the more
money we give away that we donate, the more resources
that we bring in that we used to help other people.
(19:36):
It helps create a healthy detachment from our money, and
it also gives us a chance to see that the
money that we have can make an impact that's bigger
than ourselves. And a tiny little side benefit is that
giving money away to nonprofit organizations also gives us a
tax break. Two. But while the tax break is nice,
that's not why we do it. We truly believe that
if you've been fortunate and you've been given more than
(19:57):
you need, that it's important to give some of wealth away. Yeah, well,
just the very act of giving our money away, it's
just a good practice for us to develop. Right. Our
show it's called How the Money. It's all about money,
and while it is so important in our lives, personal
finance it's a big deal because they can have a
big impact on how you spend your life if you
understand the principles behind a personal finance right. However, that
(20:18):
doesn't mean seeking after lots of money or or having
that be kind of our you know, be all, end
all focus for that to be something that we're trying
to amass. That's not part of the philosophy of our show, right, Like,
that's not how you and I approach money personally. And
the reason we talk about giving our money away is
because we do feel that it is an important aspect
of personal finance. Right. Personal finance isn't just about making
(20:38):
sure that you get the best deal, making sure you're
earning as much as possible at work, making sure that
you know how to invest it, but also has to
do with making sure that we're being thoughtful and generous
when when it comes to others, especially, you know, to
others in need. Yeah, we don't want to have that
Scrooge McDuck mentality, right, and be like swimming in our
money when other people around us are in need and
we could use that money really well. And so yeah,
on that note, Matt, the question has been asking our
(21:00):
holes have been written about what to do with your
stimulus money and whether there's a moral obligation on our
part to use it well and to give it some
of it away. So do people who don't need this
individual stimulus check have any sort of obligation to give
some of this money away. I appreciate the heart in
that question, and so when I first heard about these
checks being sent out to all Americans, I kind of
(21:20):
had this similar thought that, well, why am I getting
a check for my family when we don't really need it.
It feels a little weird. I hated knowing that a
family like ours, who still gainfully employed at the same time,
would be getting money when potentially a third of Americans
might be out of work. Right, So I would say
that if you want to give a portion or even
all of your stimulus check away to a nonprofit, then
(21:43):
do it. If you're unsolid financial footing and you can
afford to give all that money away, I think that's admirable.
And at the same time, many nonprofits are feeling the
pain in this downturn too. They're also acutely hit by
the economy going into a tailspan. So, but the one
thing I would caution is to not do it out
of guilt. I think sometimes that can be a purely
reactionary thing, and we might decide that we want to
(22:05):
give it away because we feel guilty. But I don't
think we should feel guilty about this stimulus money. And
I don't think we should feel guilty about a tax
refund and give out of guilt. But I think if
we give from a good place, a good heart, then
we of course would encourage giving. Yeah, And our goal
also isn't too guilt trip anybody for not feeling guilt
for receiving their stimuluship. Right, some people like I haven't
(22:26):
even thought about it, like that don't even crossed my mind.
I was just like, who, well, I mean, here's the
thing is that hopefully nobody feels any guilt right or
sense of shame for receiving their stimulus check. And of
course there shouldn't be any emotions at all aside to
you receiving like your tax refund check. And so maybe
a healthy way to think of your stimulus check specifically
is this right? Think about it as if essentially the
(22:46):
government is saying that they think that you know how
to best use and spend that money in your corner
of the universe. Maybe in your specific neighborhood you can
see who needs help better than the federal government can.
Like this makes sense there in Washington. You are on
the ground, live on your street, you know, in your neighborhood.
Now you see the businesses, the families that are hurting
right by you exactly. So if you see a need,
if you know of someone or someplace in particular restaurants,
(23:09):
you know that need help, then that should direct where
your money goes. If if you're unsure of what to
do with that money, just look around look for the need,
because that will allow you to be efficient and to
put that money towards you know, businesses and individuals effectively,
while also you know, you know that you'll have a
sort of an altruistic heart behind that giving or spending. Yeah, man,
I think it is important to note what the intention
(23:31):
behind these stimulus payments are. The government has set up
a lot of aid for small businesses, The government has
set up a lot of aid for people who are unemployed.
The Cares Act has also provided relief for people and
their student loans and said you don't have to pay
for six months. So there is a lot of specifically
targeted money going out towards the people in the greatest need.
(23:51):
But these stimulus payments were specifically created in order for
individual Americans to feel like they had the ability, the
extra ability to spend more in this time. That's because
of the American economy is driven by consumer spending, and
so the fact that it feels like free money from
the government that actually incentivizes our behavior. They want us
(24:11):
to think of it like free money, and they want
us to go and spend it. So buying goods and
services from your favorite nearby business is a good use
of this money. And so I would say, because of
that intention, because of the thought process behind sending this
money to you know, most Americans, that you shouldn't feel
undeserving of the funds from this bill, and if you
(24:31):
don't necessarily need it, giving it away, supporting local businesses,
those are great places to put it. But also because
of that intention, you shouldn't feel guilt and shame. Yeah,
And you know, on a practical note, under normal economic conditions,
we've discussed our dislike for gift cards, but given the
crisis that we're in, they have actually become a fantastic
way for us to support our local businesses. We currently
(24:53):
have more gift cards than we have ever had in
our entire life, except for maybe when Kate and I
got married, Remember like when you get married, Yeah, gets,
I don't know, gift certificates, gift cards they kind of
like show up you have like a bulging zip like
bag of gift cards at that point in time exactly.
But but since then, this is an all time high
for us. But also that's not the only way that
you can directly help local businesses. Go fund me. They
(25:13):
have a page where you can go and you can
search for local businesses to support, and you can just
do that by entering your zip code will link to
that page in our show notes, Man, I love this
direct approach and it's a great way for you to
help businesses while keeping it local as well. You know.
Plus it keeps me from from getting too much weight
because how much takeout is gonna be too much takeout?
Like I sort of feel this this pressure as a
(25:36):
citizen of my local community to support all of all
my favorite establishments. But we don't normally eat out nearly
this much, and so you know, being able to delay
some of that through gift cards or being able just
to send some of that money directly to some of
these restaurants in particular, Man, has been a great way.
Actually hopped on there. I saw one of our favorite
local places, the Earl. They're at the top of the
list right there, and a lot of folks are chipping in, uh,
(25:57):
and they're really close to meeting their goal. It's really
happy to see that. It's one of our local favorite
spots to go see an awesome show. Right. It's a
little gruny, maybe a touch CD, but they've also got
a really good burger, especially ceed when you're there. Yeah,
let alone if you and I both show up. So
many shows are through the years. It's such a good place.
So yeah, those establishments that have a special tie to
(26:18):
your heart, that you have a special relationship with, those
are the places we should be specifically targeting and supporting
in this time. That's right, man. It's not just about
investing and being smart with our money, but we also
want to make sure that we're kind of spending it
and putting it towards things that matter to us. Yes,
so really the last thing to say. We talked about
giving it away. We talked about the moral dilemma, and
I think typically what we would say to someone who
(26:39):
does come into some sort of windfall money Matt right,
is whether it's a tax refund or the stimulus check
in normal times, we would say, take ten percent of
it and blow it, like, have fun with at least
a portion of it, because in part prioritizing today over
your future isn't bad, right, That's a huge part of
the ethos behind the show. That's right. We want to
enjoy the moment. We want to enjoy what we have.
(27:02):
We want to enjoy the craft beer in front of
us while we're saving well for the future. And I
feel like for our listeners in particular, who are in
a really good financial spot, who have their savings ducks
in a row, who are able to continue to invest
during this downturn and it's actually going to make them
wealthier over the long term. Well, it almost feels like
a bit of a civic duty right now, right that
(27:23):
we should be spending and supporting the businesses we love
the most. I don't think we can feel comfortable across
the board telling everyone to go out and spend all
that stimulus money. But for yeah, some of our listeners,
that is going to be the best way that they
can use it by spending and giving it away. And again,
you're not talking about spending that entire amount, like you know,
you just said ten percent. I think if we can
spend a small portion of this windfall towards something that
(27:46):
we feel like is more of a splurge. Um, then
that's a that's a healthy thing to do with your money.
And it's it's a double win, right, It's a win
win situation if you can splurge and spend that money
on a company that you want to support. I know,
for me personally, I've been eye in this bice cold
made by this American company called Salsa Bicycles. Have you
ever heard of them before? No, But it doesn't sound
like an American company. It sounds like a South America company.
(28:08):
It's like the South of the Border bike. No. That
makes some some really amazing bikes. Uh. And I've kind
of been I you know, I've I've been talking about
this for a year. I'm sure our listeners are like,
just buy the stupid bike, du But I tend to
over research and take my time with these kind of purchases.
But I'm hoping to kind of siphon a portion of
that money towards a bike that I ride by myself.
You know, We've got the cargo bike where the kids
(28:28):
can ride on it, but I don't really have a
solid multi speed bike that I can ride around town
kind of go places on my own without you know
this giant cargo area behind me at the seventy pound
bike that you're hauling is so heavy, and I don't
have like the easist either, so it's all it's all muscle. Um.
I enjoy right in that bike around with the girls,
but sometimes I just want to go out there by myself.
So I'll keep you posted if I actually pull the trigger.
(28:50):
I'll check out their bikes too. I've never heard of them.
But enough about me, man, let's talk about Joel. Have
you thought any about what you might put some of
your stimulus check towards. I like eating out more than
you do, so definitely more of my money is going
to go towards that, continuing to support the restaurants we
love and care about the breweries too. So yeah, I
haven't thought of any bigger ticket items yet, but we'll see.
I don't know. I'll talk it over with with Emily.
(29:11):
Maybe will come up something. Oh well, I haven't talked
about the bike with Kate, so she's like, wait to
present alright, as a family. How about that? All right?
That works too? That works too, all right, Matt. Well, yeah,
speaking of breweries, we're drinking a beer from one of
our favorite local breweries Today on the show. The beer
that we had was Space Lettuce. It's a double. I
p A from our buds at Monday Night. What was
(29:31):
your take on this beer? Man? Man? This is such
a good, like classic I p a. Uh, Space Lettuce
is quickly becoming one of my favorite go toos now
that Monday Night is caning this beer. I don't I
don't think they're doing it year round, but they're doing
it fairly regularly. I'll say that, and I'll say, there's
so much in a name. So this beer is called
space Lettuce, and I feel like like the lettuce makes
(29:52):
me think of cabbage, which then makes me think of
like stinky hops, you know what I'm saying. And so like,
as I drink this beer, it kind of makes me
think that this beer is good. Me like, like like I'm
eating my veggies. You know what I'm gonna go with that?
You like that? Yeah, that's at least one serving of vegetables. Absolutely,
And so I feel like this is a really well
balanced beer. This is a double. So this isn't one
that you can or maybe should drink every day, but
(30:14):
at least once a week, I feel a nice craft beer.
It's all right to kind of dip your toes into
the double I P A water and get something that's
a little bit bigger. I really like this beer. Um,
this is when I know that you and I both
we have we've got a bunch of these in our fridge. Yeah,
because it's such a good go to solid It's so good, dude. Yeah.
So I think this is in my mind, kind of
in between the old school style of I P A
and the new school style nice. It's a mix of
(30:34):
juicy and sticky. It's got this clear, pale orange color. Man.
I think it's got these intergalactic flavors that then I'm
a huge fan of. So yeah, space Lettuce for Monday Night.
If you see it on shelves at your grocery store
or package store, you should totally pick it up. Yeah,
and we've done a beer giveaway with them before. Look
for one of those coming up here in the future.
We'll we'll have to swing by there, grab a bunch
(30:55):
of their cans and yeah, we'll do another one of
those giveaways to to one lucky listener out there. What's
better and free beer? Very little? Yeah, I can't pick
of anything around off the top of my head. But
all right, Matt, that's gonna do it for this episode.
And for folks who want to read the show notes
that we have, well those are up at how to
money dot com. And if you are listening to this
episode and you know somebody who might need a little
help with their their personal finances, maybe they need some
(31:18):
direction as to what they should be doing with their
stimulus check or their tax refund in addition to the
rest of their personal finances, send them our way. We
would be honored if you you told a friend, told
someone you know about our podcast how to Money. Sometimes
it can be kind of awkward and it can be
weird to talk to somebody else about their money. Uh
that's where a third party like us can can play
(31:39):
a role. You know, this this podcast can be something
that you both talk about and you don't have to
get all up in their business. If your friends Sally
or Jim is terrible with money, you don't have to
tell them that they're terrible. You can just be like, oh,
just listen to this podcast with Matt and Joelan. You know,
I think I can help. But if it's harder to
have that one on one combo, yeah, absolutely, man, all right,
that's gonna be it for this episode until next time. Buddy,
best Friends Out, best Friends Out m
Hosts And Creators
Joel Larsgaard
Matthew Altmix
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Betrayal: Weekly
Betrayal Weekly is back for a brand new season. Every Thursday, Betrayal Weekly shares first-hand accounts of broken trust, shocking deceptions, and the trail of destruction they leave behind. Hosted by Andrea Gunning, this weekly ongoing series digs into real-life stories of betrayal and the aftermath. From stories of double lives to dark discoveries, these are cautionary tales and accounts of resilience against all odds. From the producers of the critically acclaimed Betrayal series, Betrayal Weekly drops new episodes every Thursday. Please join our Substack for additional exclusive content, curated book recommendations and community discussions. Sign up FREE by clicking this link Beyond Betrayal Substack. Join our community dedicated to truth, resilience and healing. Your voice matters! Be a part of our Betrayal journey on Substack. And make sure to check out Seasons 1-4 of Betrayal, along with Betrayal Weekly Season 1.