June 16, 2025 • 51 mins
Let’s kick off the week with some fresh listener questions we have lined up for you! And don't just stand on the sidelines- if you have a question you’d like us to answer, toss your voice memo our way. It only takes about 90 seconds to record and you can find a step by step guide over at HowToMoney.com/ask . Regardless of how random or bizarre you might think it is, we want to hear it!
1 - Is Matt planning to take his old clunker on his 2 week road trip?
2 - After getting married, what are the practical steps in combining our finances?
3 - I’m considering dropping my escrow… what are the pros and cons?
4 - Paying for daycare with a credit card now comes with an additional fee… is the juice worth the squeeze?
5 - What is the new, inflation adjusted, dollar amount for Money Gear #1?!
Want more How To Money in your life? Here are some additional ways to get ahead with your personal finances:
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- Join a thriving community of fellow money in the HTM Facebook group.
- Find the best credit card for you with our new credit card tool!
- Massively reduce your cell phone bill each month by switching to a discount provider like Mint Mobile.
During this episode we enjoyed a whiteferrari by The Veil! And please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe if you’re not already a regular listener, and give us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money!
Best friends out!
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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 Matt. I'm just kidding.
I'm Joel, and you're oh, you're.
Speaker 2 (00:05):
Actually gonna we're we're gonna run with it. I am Matt.
Speaker 1 (00:08):
That's right. Today we're answering your listener questions.
Speaker 2 (00:29):
You know what, buddy, just to completely throw I wonder
if folks actually thought, wait a minute, is that is
that Matt? They're like, no, that's that's Joel. He's just
lying to us. Some people say our voices sound alike.
So they do sound alike, and okay, here's what really
think they do? Well, they sound less alike for two reasons. One,
we are in a better acoustically treated room. Back in
(00:49):
the early days, when both of our mikes would pick
up both of our voices, our voices did kind of
meld together. Secondly, okay, three things. Secondly, we got better mics. Thirdly,
I actually, here's a little peak behind the curtain. I
put a slight pan on our voices. And so as
you are listening to this, and some listeners may have
picked up on this, they might notice that my voice
(01:09):
right now is coming through your left earbud slightly more
than your right earbud, which is where Joel's talking out
of right now, that's right. So Joel's on your right
side of your shoulder. I'm on the left side.
Speaker 1 (01:20):
And you know, on the right side is always the angel.
Speaker 2 (01:22):
I don't know which one is the angel and which
one's the little devil.
Speaker 1 (01:27):
I think it's obvious.
Speaker 2 (01:28):
Now this is our ask how many episode we're going
to hear from listeners asking questions, for instance, road trips
and used cars? Can they kill Mingle?
Speaker 1 (01:37):
We'll see.
Speaker 2 (01:37):
Another listener is asking for some specific steps when it
comes to combining his finances with his new wife, and
another is asking whether or not he is in a
good position to drop Escrow insurance.
Speaker 1 (01:49):
There with his mortgage. We'll get to those plus more
on today's episode.
Speaker 2 (01:53):
Sounds good, Yeah, man, got anything for us? Any any tips?
Speaker 1 (01:58):
Questions?
Speaker 2 (01:59):
Well, I was gonna say I was just emailing a
listener who he shared the newsletter with five buddies, which
means that he received a free beer on us on
Joel and Matt, And he said, yeah, actually, I just
I missed it because I assumed it was a late
tip because bartending is.
Speaker 1 (02:18):
His side hustle.
Speaker 2 (02:18):
So he's like, oh, I just did a wedding and
all of the tips always say beer because.
Speaker 1 (02:24):
It's a Venmo tips, and that's what we put when
we send you money on Venmo.
Speaker 2 (02:27):
Exactly sharing our news so two things. Check out the
how to Money newsletter how toomoney dot com forward slash
newsletter and sign up, and you share it with your
friends or family members. You'll get special perks from from
Joel and I.
Speaker 1 (02:39):
But eventually you can win the coveted how to Money socks.
Speaker 2 (02:42):
Yeah, you know nobody has taken us up on the
virtual hang.
Speaker 1 (02:47):
Nobody shared the newsletter that many times. Is it fifty
or forty? Well, I know I want to say we
dropped it, oh.
Speaker 2 (02:52):
Because we're like, oh man, nobody wants to. Nobody wants
to talk about it.
Speaker 1 (02:54):
If you share the newsletter enough, you get to spend
quality virtual time with us.
Speaker 2 (02:57):
Okay, here's my question for you. If you we're not
interested in personal finance. I know it's impossible to imagine,
but try to if in a world interested in personal finance,
if you didn't have real estate on the side, what
would your side hustle be. Because the reason I thought
on this is because I pictured him standing there pouring
up beers, serving glasses of wine. Chatting with guests at
(03:18):
the wedding, and I thought, man, that's what Jol.
Speaker 1 (03:19):
Needs to do.
Speaker 2 (03:20):
I feel like you would be so happy in that scenario,
just serving it up, chatting with folks, having a great time.
Speaker 1 (03:24):
The hours of bartending are not conducive to my lifestyle.
That's the worst. Like the actual job itself, I've never
done it, but I've always been I've always wanted to
because like just being Sam malonea cheers slinging beers and
talking to the crowd like that, that sounds pretty great
to me. So yeah, I could be up for it,
especially in a world where I didn't have, you know,
a life, three kids.
Speaker 2 (03:43):
Yeah, I get it, I get it. It's also hard
to remove that from the equation.
Speaker 1 (03:46):
You should be a barista probably right just came crafting
the coffee.
Speaker 2 (03:49):
So I really do want to learn how to pull
some really excellent shots as honestly as like training because
at some point I'm going to get my own espresso
machine at home. I want to build out a little
coffee like a cocktail and coffee corner of our kitchen
that's purely dedicated.
Speaker 1 (04:05):
For that espresso martinis NonStop.
Speaker 2 (04:08):
Well, I know that that seems like the logical outflow
of combining caffeine and cocktails.
Speaker 1 (04:13):
But I absolutely.
Speaker 2 (04:14):
Do not like espresso martini saying they're terrible. Yeah, I mean,
I don't know what it is about them that people
are drawn to you. I think it's just a weird
about an end drink. Yeah, that we've folks have been
experiencing over the past few years, no doubt.
Speaker 1 (04:26):
All right, that's all I got. Okay, you good? Yeah,
all right, right, let's mention the beer we're having. This
one's called White Ferrari. It's by the Veil Brewing Company
out of Virginia. We'll give our thoughts later. If you
have a money question, go Tohata money dot com, slash ask,
or just literally record your question on the voice memo
app of your phone and email it over to us.
Hopefully we can take it really soon. On the show, Matt,
let's kick this off. Let's take a question now from
(04:47):
a listener who wants to know about taking a road trip.
Should he rent a car or use the one he's got?
And actually it's kind of a question named towards you
as well. Angel and Matt.
Speaker 3 (04:59):
This is Rob me and Ellicate City, Maryland. I know
you both are big fans of driving high mileage, paid
off vehicles.
Speaker 1 (05:07):
I am right there with you, Matt.
Speaker 3 (05:09):
I know that you have a big summer road trip
coming up, and I'm curious whether you will take your
high mileage vehicle on that trip or if you'll rent
a car. I always struggle with the whole idea of
how confident am I that the hauler can make it
there and back with the family. Intel appreciate your perspective
and hope you have a great trip.
Speaker 1 (05:29):
Rob is so polite.
Speaker 2 (05:30):
He calls it a high mileage vehicle as opposed to
a clunker.
Speaker 1 (05:35):
Do you remember that, Rob?
Speaker 2 (05:35):
You make me feel good about my vehicle.
Speaker 1 (05:37):
It's just a high mileage. He's totally pc You remember
during the Obama administration there was something called cash for Clunkers,
a government program or get paid. That's right, And like
they didn't I didn't realize that I was a government
Broy didn't avoid the term. Yeah, yeah, he was. Well,
so that's because.
Speaker 2 (05:50):
They're trying to encourage you to offload. It was all
about the the evy green transportation man.
Speaker 1 (05:55):
That's right. I think I love this question, and it's
something that I I was curious to know before, because
I didn't, I hadn't asked you this yet. I was like,
are you going to take your head talked about it
or are you going to rent one? Especially given the
length of your road trip? And you know, when it
comes down to it, Matt, we know that opting for
a used car makes so much sense just from a
(06:16):
financial perspective. But if you're scared that you that your
used car, especially if it's getting really long in the tooth,
is going to hold up on a longer drive. So
I mean, yeah, you are going on this pretty extensive
road trip. We're not talking about a couple hundred miles,
We're talking about thousands of miles. So what are your thoughts?
Speaker 2 (06:32):
I think that's I mean, that's a large consideration as well,
the fact that I mean, like we're looking at driving
and we don't know our our exact itinerary just yet,
but we're at least going to be driving around three
thousand miles, if not more.
Speaker 1 (06:43):
This is over the course of a couple of weeks.
Speaker 2 (06:45):
And so first of all, there's the depreciation, right there
are estimates that cars appreciate at twenty cents a mile.
Speaker 1 (06:51):
I'm guessing that hours is probably less at this point.
Speaker 2 (06:53):
But if you run the math, we're talking about losing
six hundred dollars at least in value on the car
by putting it through its paces this degree. You say
that yours would depreciate less, and that's just because it's older.
Is older more to depreciate. So if you're talking about
a three year old used car will one, you're probably
not as worried about it it breaking down on you
or something like that exactly, But you're also going to
(07:13):
trade offs. Yeah, depreciate will cost you more putting those
miles on it, And so I will say I just
want ahead and second that out there. But I'm not
really thinking about the depreciation all that much.
Speaker 1 (07:22):
This is our vehicle.
Speaker 2 (07:23):
We're not necessarily looking I guess another way to think
about it too, is just instead of thinking about it
as depreciation, maybe I should be thinking about it as
wear and tear on the vehicle. But even still, I'm
not thinking about it through that lens as much. It's
more about the peace of mind.
Speaker 3 (07:38):
Uh.
Speaker 2 (07:38):
That means a lot more on a road trip like
this with a pretty tight itinerary. I mean we've got
stops in different cities. We don't want to roll in late.
We want it to unfold. I guess it's the way
we want it.
Speaker 1 (07:49):
To especial, especially for that private audience with the pope
that you've got.
Speaker 2 (07:53):
But the reason I mentioned this is because, like like
Rob said, when you've got the family in tow, I don't, man,
there aren't a lot of things that are more stressful
than having to make a major repair while on the
road while trying to travel and hit up multiple states,
multiple cities, multiple sites, things that we have tickets to, right, Like,
that's another thing. It's not like just checking in late.
It's a matter of, oh, man, are we going to
(08:14):
miss our tour? You know, things like that.
Speaker 1 (08:16):
Emily was taking the kids on a few hundred mile
trip and I was going to catch up to him
a few days later, and the alternator went bust, And
so that's always a possibility, like you can never And
it's a possibility too with a rental car. You might say, hey, great,
this thing's two years old, it's got twenty thousand miles
on it.
Speaker 2 (08:35):
But it's much less likely, I would say, that's compared
to like one hundred and fifty thousand mile.
Speaker 1 (08:39):
You're playing the odds long in.
Speaker 2 (08:41):
The is there an equivalent to long in the tooth
when it comes to vehicles, like long in the oodometers,
long in the radiator, something like that.
Speaker 1 (08:47):
So I had to race down there and we man,
we got so lucky with being able to replace the
alternator that day somewhere. Yeah, on a Saturday, nonetheless, when
a lot of shops are closed. But that's the kind
of thing that, yeah, can throw kink in into the plans.
I was going to pick them up and bring them
home and it was just going to be like trips
off for the time being, massive hassle. And so yeah,
I think you have to take those things at a consideration.
(09:09):
And if you're the kind of family that prioritizes high
mileage non clunker vehicles, Rob, those are the kind of
questions you have to have to wrestle with. And I think, Matt,
if you were to decide to take your own van,
you'd probably want to have it at least looked over
thoroughly before you win. Sure the fresh oil change right,
check in the tires, fluid levels, spark plugs, all that
kind of stuff would be why same thing for you, Rob,
(09:29):
if you're going to opt to go that route, just
make sure your your beautifully vintage vehicle is at least
up to snuff from everything that you can ascertain. I
think the nice thing about renting a car, especially when
you're going on a really long road tip, is that
you benefit from the from the unlimited mileage that you're
(09:50):
able to get through the rental car company.
Speaker 2 (09:52):
Right.
Speaker 1 (09:52):
So again, if you're driving a few hundred miles of
the course of a few weeks, you get less benefit. Right,
You're getting less bang for your buck. The risk is
a whole lot less too. But since Matt, you're driving
at least three thousand miles, you're probably going to do
more than that. I think the price of the rental
looks far more attractive because you're like beating the crap
out of the rental car and not your own. You
(10:13):
just get every dollar you spend on It just matters
more because of all the mileage you're avoiding putting on
your vehicle. And so I'd be leaning in that direction,
especially with the kind of travels you guys have planned
and totally that the time sensitive nature of not wanting
to screw that up.
Speaker 2 (10:27):
Yeah, one argument for folks taking their own car, and
this isn't something that we especially feel but I have
I have heard folks push back and say, well, I
want to take my vehicle like they have more like
they're more car people. This is because that they have
an emotional attachment to their car. That was one of
my dad's arguments for because I was trying to talk
them into getting an EV and he's like, well, I
can't drive that out to the Midwest and visit family.
(10:48):
I'm like, well, you just you rent a car when
you do that once or twice a year. He's like, right,
I want to be able to take my car. And
so that's the consideration that I know some folks have
in their minds, but that in this case this doesn't apply.
I'm like, no, it's not about the vehicle that we're
traveling as opposed to what we're doing as a family.
But for some people, part of what they're doing as
a family is the vehicle or they're traveling in.
Speaker 1 (11:09):
I get that, especially when you have an older car
that doesn't have some of the new fangled tech accessories.
Renting the car might.
Speaker 2 (11:18):
Prove good in that not even considered the entertainment says
so much is what I assume your friend?
Speaker 1 (11:23):
Yeah, yeah, no, I think There's also this.
Speaker 2 (11:25):
Like as a frugal versus cheap element to this question
as well, because if it was just me, Let's say,
for some reason, I was planning on doing this two
week road trip, Yes, but I was maybe planning on
doing it solo. Well, in that case, I would be
much more willing to take a well maintained, older vehicle
that I already owned, as opposed to straight up for anyone,
because you know, getting stranded on the side of the
(11:46):
interstate or even some country back road where it's just
me my backpack, it's no big deal.
Speaker 1 (11:50):
Says a little more fun and serendipitous when you're solo
than it does been.
Speaker 2 (11:53):
Like, I would even be willing to like consider hitchhiking,
which I've never done before, because I'm like, oh, kind
of sounds like an adventure, But putting the family through
an ordeal like that is not something that I would
be interested in doing that. Those are the kind of
memories that I think, I don't know, they would certainly stick.
Speaker 1 (12:08):
Yeah, I posted picks of our my hitchhiking adventures before
the chainsaw. Yeah from the whole bud light commercials. Yeah,
good times is fun. People are more reticent to pick
you up when you're with shady characters like my friend
Josh indeed. But yeah, I think you're right. I mean,
I think when one person is and you can kind
of roll with the punches, that's one thing. But kids
are not just the vehicle of the punches. Yeah, it's
(12:29):
it's the party. It's who you're rolling with as well.
That is something you got to take into acount. I
think it's similar like the idea of staying at a hostel.
I'm a ful, I don't care. That's fine. I'm in
my forties and I'm still down with that, but my
wife not as much, and so like you have to
kind of play around everybody's goals and dreams. I think
I would be willing to stay.
Speaker 2 (12:48):
I could stay in a hostele too, as long as
I had a comfortable bed. I think for me that's
kind of what it comes down to now. I don't
want to sleep on like someone's couch where it's slanted
and angled.
Speaker 1 (12:58):
As long as it's quiet.
Speaker 2 (13:00):
It it's a there's a comfortable mattress, and I have
control over the temperature, I think I would be able
to get a great night sleep.
Speaker 1 (13:06):
Yeah. Side note slight Tangent. Okay, so where you rent
your car matters to Matt, So you have you have
you talked through that, like where you're gonna go to
rent this car? Well, you're for sure renting a car, Yeah.
Speaker 2 (13:16):
For sure renting, and I am. We've kind of dragged
our feet because we haven't nailed down the itinerary yet,
and so because of that, we don't exactly know whether
we're coming back, like, oh, are we going to be
coming back on that Monday or that maybe that Tuesday,
or is it going to be more like that Wednesday
or Thursday. I have looked around a little bit though,
and of course looked over at Priceline.
Speaker 1 (13:35):
So what are the what are the rates?
Speaker 2 (13:36):
It's roughly a one thousand bucks okay, basically a thousand
bucks of all the different places I look, except for
the fact, I will say so looking on Priceline and
preparation for our trip, but also for Rob's question, I
was really shocked to see this what price Line called
an express deal and it was substantially less, so all
the other.
Speaker 1 (13:55):
Better than Costco, better than Yeah, well, I know you
like Costco, but I like Auto slash Tube by them.
Speaker 2 (14:01):
Oh I haven't checked out. I should definitely check out
autoslash is it dot.
Speaker 1 (14:05):
Com for all folks, and it's because they will continually
shop the price, that's right. Yeah, yeah, Okay, so I
got some homework to do. But here's the deal.
Speaker 2 (14:12):
The express deal specifically that I saw on Priceline was
for a rental and they don't name it, of course,
but it is only if I were to go pick
that up at the airport as opposed to a more
convenient pickup. And when we're talking, it was over well
over three hundred dollars. It was pretty close to five
hundred dollars in savings, oh wow, over the course of
two weeks, So it was like thirty three dollars a
(14:34):
day versus like eighty seven or something like that. That
was something I was not expecting, and I was almost
gonna pounce on it because I was like, well, shoot,
maybe this is some sort of lightning deal, limited time only,
but it's non refundable. So that was the main catch
with this one. And so once we nail down the itinerary, though,
I'm going to hopefully see if that's still available because
that's the kind of those are the kind of hoops
(14:56):
that I'm willing to jump through. Sure, if we're looking
at savings, not magnet, I'll.
Speaker 1 (15:00):
Drive you down there to pick it up. And so, yeah,
I think that's that's actually a really that's a really
good tip there too, because if you it's one thing
to look at a bunch of different rental car companies,
but it's another thing to look at different locations. And
so let's say you live twenty five thirty fifty minutes
from an airport, and you might be able to go
save a bunch of money getting it at the airport
(15:20):
location as opposed to the neighborhood location that's closest to you.
That's yeah, that's a hoop that's probably worth jumping through.
For a whole lot of people, that's big savings. So
I think one last thing that's probably worth mentioning is
when you rent a car, you might be able to
prioritize fuel economy. So for even if you're choosing a
similar kind of make right, like you have a minivan,
(15:41):
I'm sure you're probably gonna rent another minivan. You're not
gonna rent like a compact, Like no, yeah, it's not
gonna work out very well, but you might find that
the rental car gets an extra five six miles to
the gallon on the interstate, and when you're talking about
driving the distances you are, that could probably save a
decent chunk of change when you're as well. So I
would take all those things into consideration. But I think
(16:03):
the biggest thing, kind of like you alluded to at
the very beginning, is the peace of mind and the
being like, hey, we're gonna be able to hit our
spots the acts of God. Things always happen, right. There's
no way to completely ensure that nothing goes wrong with
even the rental vehicle. But I think for a lot
of people, depending on the price, depending on all those
different variables, that can make a lot of sense to
rent the car on that road trip instead of using
(16:25):
your own.
Speaker 2 (16:25):
That's right, Yeah, so Rob, we wish you the best
of travels if that's also something that you're planning to do. Joe,
we got more to get to, including a listener who
has a question about putting childcare on a credit card
for the benefits.
Speaker 1 (16:37):
We'll get to that and more right after this. All right,
we're back, Matt. We got more money questions we got
to get to, and listeners who just need to know
things about finances, and we're here to help. This next
question comes from a listener who just got married.
Speaker 4 (16:59):
Hey guys, this is justin from Kokemo, Indiana. I just
got married six days ago and my wife and I
are planning to combine our finances. I know this is
a topic you've discussed in the past, but I can
only find the content where you discuss the philosophy of
combining finances, but not the strategy. What are your suggestions
(17:20):
for going about creating a joint checking account, deciding how
much of each paycheck should be put into that combined account.
Should we keep our own separate accounts for personal spending money,
that type of stuff. Additionally, I've been using WINEAP for
over five years and I love it. She is not
(17:40):
interested in using WINEAP, so I'm just curious from the
budget app standpoint, what's the best way to view all
of our information in the same spot where I don't
have to put in her transactions for her.
Speaker 1 (17:56):
Any information you have would be greatly helpful.
Speaker 4 (17:59):
If you're ever north of Cocomo, come check out the
Coterie in Cocomo, Indiana. It is a cocktail bar, but
we have a huge selection of craft beers and the
best burgers in Indiana. Thanks so much.
Speaker 2 (18:11):
Okay, two things. What was it called the coterie, the coderie,
the couttery, and then also Cocomo. That sounds like a
place that should be, like in Hawaii or something.
Speaker 1 (18:19):
There was this band that he used to come to
my elementary school and they wud sing a song about Cocomo.
But I don't think they were sing when you were
talking about this code, so I don't think so. But
thank you for the recommendation. Justin sounds like an awesome place.
We're all about cocktails, burgers in addition to delicious craft beer.
Equal opportunity in bibers. Heck yeah.
Speaker 2 (18:37):
But briefly, I will say so, I know this is
in Justin's question, But the philosophy is that by combining
your finances helps you too to get on the same page.
You're you're paddling together in the same direction when you
combine your finances, and all the stats point to improved
happiness levels. It points to the ability to move towards
those mutual goals faster. But that being said, I think
(18:58):
that's what all. That's all we'll say on the philosophical
reasons why you should combine your money. Justin however, is
asking about the strategy.
Speaker 1 (19:06):
Joe's let's get to it. Let's do it. Let's do it.
So let's talk some logistics. And I do think that
the simplest thing to do is to combine your accounts,
to have one account that rules them all. Allah Lord
of the Rings is funnel everything, all of your income,
all of your spending through a single checking in saving
these account that has both of your names on it.
(19:27):
It's quite possible to keep your individual accounts and to
set up transfers to a shared main account, but I
just don't think it's as effective. And I know some
people mad, especially if it's like a second marriage. They're
just a little more reticent to combine all the way,
especially if they've been burned. So this isn't like a
judgment or hey, you've got to do things exactly the
way Matt and Joel tell you to do it, or
(19:48):
you're not doing it right. There are different ways to
make this happen and to make it work for you,
But I do think that the most effective way is
to have everything go into an account and let that
be the center what you call Matt the grand central station.
Of your finances, right, that's right. And I just think
that's a really effective way, both kind of mentally and
(20:09):
financially to do things. And I think the other way
i'd maybe encourage you to do that is to say
that you just got married, right, just a few days ago,
and you said some bows. They're pretty significant, right, I'm
gonna love you sickness and health till the day I die.
You're going to care for each other until the end
of time, right, So combining accounts, I think it's really
(20:31):
interesting to me that some people buck that. They're like,
I'm going to marry this person, but and I want
to say all these things when I marry them, but
we're not going to combine accounts. And I just I
don't necessarily understand that way of thinking. Again, unless it's
like this is my second or third marriage or something
like that. But I would suggest either using one of
your current bank accounts if you have a great online bank,
and adding the other as a co owner of that account,
(20:52):
or opening up a new account if your current bank suck.
If you're with one of the giant banks that we
talk trash about all the time, this is a great
time to create a fresh art bank account where you
get to go with one of the people that we say,
one of the institutions that is top notch and paying
good rates and has better customer service, and go with
them instead of going with the bank you've been with totally.
Speaker 2 (21:12):
All money going into that account, all money leaving that account.
You've got like this United Combined financial home base.
Speaker 1 (21:19):
I don't think you.
Speaker 2 (21:19):
Need individual accounts for spending money. Again, you can, but
something as simple as each of you having your own
credit card that feeds into why nop for record keeping,
I think that can work just fine.
Speaker 1 (21:29):
There's like less to keep track of it. It's like
it's simple, yeah, I've got this credit card, you've got
that credit card, but both of them going to wine apps,
so it's easy to keep track.
Speaker 2 (21:35):
Of hing or I mean, I think for a lot
of folks that's how they're able to have spending that
the other one doesn't know about it when it comes
to gifts that kind of thing. But otherwise, I think
even just having your own card and you just I mean,
you're using wineapps, so you've got different financial goals that
you've got set up in there. Two accounts is what
some folks are going to advise that. We think it's unnecessary.
I think it's potentially clunky. It also doesn't provide for
(21:58):
that individual legal protection for assets if the marriage.
Speaker 1 (22:01):
Were to dissolve, Like Joel said, for folks who have
just more difficult backgrounds. Some folks think that, hey, I've
got this account that's online with my money in it.
But in many states that doesn't protect your money. That
doesn't mean, oh, I've got this individual save us account
with my name and you have one with your name.
It would be a preu that want to cover yours right.
But in community proper state property states in particular, that
(22:23):
money's still going to get dibbat up fifty to fifty.
Speaker 2 (22:25):
And he mentioned too that his wife doesn't she's not
into why AB. I think it's totally okay to divvy
up responsibilities based on your respective strengths and your interests.
I think that you justin you're maybe more of a
nerd accountant CPA type who likes to listen to personal
finance podcasts.
Speaker 1 (22:41):
I get it. If you are in charge of tracking.
Speaker 2 (22:44):
And spending and why AB works best for you, I
think that's great, utilize it, But I think you're the
ability for y'all just to get on the same page.
Like she doesn't need to be sitting there right there
next to you as you're making the updates and providing
her the feedback, or as you're talking about some of
the different that you're both working towards. That can be
something that you predominantly focus on. Certainly, keep her informed
(23:05):
to the extent that she wants to be informed, But
beyond that, I think there's plenty of other things in.
Speaker 1 (23:10):
Life that you should be focusing on as opposed to
the numbers. By the way, I think I just made
like a legal comment, and I just want people to
know I'm not a lawyer, and I don't know very
much about that stuff, but I do know that you
should look into the laws in your state to be
aware of when you keep money separate, Like are you
actually protected in some way, form or fashion by doing that,
because in many cases you're not. That's true. And you
(23:31):
just talked about kind of the mutual involvement, Matt and
and I think you and I would both say that
both parties should be involved, both should play a role
and have a say in the finances. You know, we
want you to come to an agreement about goals and
savings rates and even investment options to kind of so
that both of you at least have an idea. Maybe
one of you has is leading the charge on that,
(23:53):
but that you're you're having discussions about it openly together. Yeah,
because then those shared goals are going to help determine
just how hard you work towards each individual component of
personal finances like investing, saving, spending, giving, And then those
goals are going to shift and morph over the years,
causing you to rethink things, right, dialing back or increasing
contributions amounts and given years. I think it's okay to
(24:17):
have like an eighty twenty or even like a ninety
ten responsibility split where it's like, hey, I'm in charge
here for the most part when it comes to finances
because it's what I'm interested in and you trust me,
and so I'm the wine ab guy and you don't
care about that stuff. I think it's totally fine. And
that's actually how a lot of relationships work. It's not
a fifty to fifty split. Similar how you might split
(24:37):
up like cooking duties. Maybe it's like, now I'm the
chef in this house, right, and you do the dishes
and that's pretty common, pretty normal. It's a fifty to
fifty split on cooking, I would say is more abnormal
but admirable if that works for you. But I think
one hundred to zero that's just not healthy. And that
can lead to marital issues down the road, and that
can lead one party to feeling like they're completely left
(24:57):
out in the dark on all the financial decision that
get made. And so I even if they want to
be left in the dark, it doesn't put you, It
doesn't put that partner in a strong position because then
you need to be clued in at least a little bit,
even if somebody like the other partner is pulling the
majority of the way. Yep, I agree.
Speaker 2 (25:13):
I'm thinking about how justin, I'm picturing maybe something that
is maybe a little more ninety ten. And I want you,
justin to find different ways to talk about some of
the different savings goals, some of the shared life goals
that you have with your wife in a way that
gets her excited. Because what I don't want you to
do is say, hey, Matt and Joel said this, and
if you are, she's like, who are those guys? I mean,
(25:35):
if you are all about why nap. It means that
you are into the numbers, which means you are going
to be most likely incredibly successful in reaching some of
your financial goals. It means you also know your savings rate.
Don't tell your wife that, Like, don't don't be like, oh,
guess what our net worth is pumped up to. I'm
guessing that's probably not something that she's going to be
(25:55):
all that interested interested in, as opposed to, well, what
does that mean for us being able to eat out?
Speaker 3 (26:01):
Like?
Speaker 2 (26:01):
Does that mean that we can take like, is it
our date nights back on the table because our savings
rate hit hit x percentage? Does this mean that we'll
be able to go visit my sister next summer even
though she lives on the other side of the world, Like,
find the things that she is interested in and help
bring personal finances alive because of some of these things
that you want to do in real life. As opposed
to just focusing on the numbers, I think that's really.
Speaker 1 (26:22):
Important to disinterested party. That's the best way to get
them at least a little interested in in what you
guys are trying to accomplish to Again makes me think
of a recent conversation you and I had about your
your workouts with Kate because you were like, oh, man,
I found this like nerdy details about strength training for women,
and you're like, but I'm not going to tell her
(26:42):
because she won't care, and she doesn't care, it'll probably
make her hate it more.
Speaker 2 (26:45):
Yeah, exactly, that's that's so true. And I was geeking
out because I'm like, oh, give me the data. It
was something that we've talked to Michael Easter, friend of
the show, right, but he's got a great fitness kind
of newsletter, lifestyle sort of stuff, and he just was
taking on women and muscle mass and longevity and caneser
just all of these different things. And guess who wasn't
going to be interested in that at all?
Speaker 1 (27:07):
Yeah, my wife. You want to make her cringe and
eyroll share that with.
Speaker 2 (27:11):
Her instead, I was like, you know, what I need
to do is to continue doing the thing that we've
been doing. Yeah, that she's been all about, which is
us working out together, me providing her the instruction, commenting
on her technique so that she doesn't get hurt. Like,
these are the things that she cares about as opposed
to the data. Yeah, the science.
Speaker 1 (27:27):
Yeah, she's not into that not everyone, not everyone cares
at that level, and it makes me think too, it's
important to have like regular check ins, right, especially especially
in the beginning. Put it on the calendar and make
it fun, so like whether it's over your favorite craft
beer after like before you watch a movie or something
like that. This do the twenty minute money check in.
You know, I think you might feel like those money
(27:47):
dates are overkilled because of how in sync you are
with your finances. But she she's going to need to
be let in in some way, and I think having
those on the calendar will be a way to do that. Matt,
you text Kate like, that's the way you involve her
in finances is like, hey, here's where things stand for
this month, and so it's a monthly thing.
Speaker 2 (28:04):
In a similar way, she's not going to log in
or she's not going to open up the file and
dive in to excel. But what she will do is
look at her phone when I am sitting there on
the computer, and I send her an update on spending
that much. And you probably felt early on, well, we
need to have more sit down meetings. But especially it's
running on all cylinders at this point, you don't feel
(28:25):
like a text message suffice is at this point, but
early on you might need a little more face to
face and to allocate a little more time for And
of course like once a year we'll have a big
sit down where we are spending some time on it,
diving into the numbers. But yeah, beyond that, it's just like, okay,
let's just tie this to some of the different goals
and priorities that we have.
Speaker 1 (28:43):
Last thing I wanted to mention real quick is just
to not forget to change the beneficiaries on your accounts
because you might not need a will yet maybe that's
coming down the pike, but make sure that you have
you've listed each other as beneficiaries in the back end
of your retirement accounts. That just supersedes a will in
most cases anyway. But that just makes sure that your
(29:03):
money if you were to pass goes to your new
spouse instead of going to whoever else you already had
listed on your account. You've probably already done it, but
just a reminder, it's really important thing to do. That's right, Joel.
Speaker 2 (29:15):
Let's get to our next question from a listener who
has a mortgage. He's not here to brag, but he
has an enviable mortgage rate.
Speaker 5 (29:22):
Hi, Matt and Joel. This is Steve from Plainfield, Illinois.
I was calling because I recently received a letter from
my mortgage company telling me that I have the option
to cancel my escrow because my loan to value ratio
has dropped below sixty five percent and I've been making
payments on time.
Speaker 1 (29:41):
I just didn't know if that was the right thing
to do or not.
Speaker 5 (29:43):
I didn't even know that this was an option. Just
give you some big basics about my mortgage. I still
owe about one hundred and fifteen thousand with that sweet
sweet two point seventy five percent, so that means that
my escrow payments are actually slightly more than my principle
and interest in each month. In terms of what is
sent to escrow, I pay about fifty four hundred and
(30:05):
property taxes and about fifteen hundred insurance. It adds up
to just under seven thousand in scrow on a yearly basis.
So I just didn't know if there was some any
upsides or downsides to canceling the escrow and just paying
the insurance and property taxes. Myself, I figured I'm the
type of person that would be able to plant that
money into a high yield savings account and you know,
(30:28):
just benefit from the interest.
Speaker 1 (30:31):
But I didn't know if there's anything I was overlooking, So.
Speaker 5 (30:33):
I'd appreciate any insights you have. Thank you very much,
Best listener out.
Speaker 1 (30:38):
Matt Some listeners might be might have just heard that
and said, what makes you think you're the best Steve.
Speaker 2 (30:42):
But well, if you said best Steve, then he only
limits offending all the Steves.
Speaker 1 (30:47):
That's right, that's right.
Speaker 2 (30:48):
It's like best Wayne, but that last week or a
couple weeks ago.
Speaker 1 (30:51):
Yeah, best Wayne out.
Speaker 2 (30:52):
It's not long ago, Steve. You should have gone with
best Steve out.
Speaker 1 (30:54):
That's right, that's right. But you might be the best
listener Steve, but I think two point seventy five. Yeah,
a lot of people heard that, especially in today's environment.
They're like, you lucky son of a gun. Yeah, that's
a so good. It really is sweet. Like give me
that mortgage rate straight into the veins, Matthew. And congrats
to Steve on being able to make substantially more in
(31:14):
savings and you're paying towards your mortgage debt. That is
just like a rarity upon rarities, right, and we just
I think mostly at the time, we didn't realize just
how good we had it those sub three percent mortgage rates.
Now we do, and to be able to make more
in just a straight up hiled saying us, it's crazy,
it's incredible to make a spread on money. Yeah, that's nuts.
Speaker 2 (31:34):
But let's talk about ditching escrow, because the argument for
sticking with the escrow model is that it's easier from
a budgeting perspective. Right, you know your monthly payment amount,
you pay it like clockwork. There's actual real benefits to that, right,
like the fact that this is not something that takes
up space in your brain, on your it's not on
your mind, and that's because it's incumbent on your mortgage
provider to pay the taxes and the insurance. Because those
(31:56):
bills tend to be pretty hefty. Some folks might find
themselves in position of not having the cash on hand
when when it's needed, and so having your mortgage to
escrow it essentially forces you to do the right thing
without you having to think about it. It prevents you
from getting too used to a smaller monthly payment that
doesn't then reflect the real underlying costs. So first of all,
(32:17):
you need to make sure that you're the kind of
person who doesn't just see a smaller payment is just
like sweet, Now I got more money to spend towards this. None,
of course, you need to be organized about it, you
need to be on top of it. And you're supersized
socking that money my vacation budget thanks to you know,
ditching escrow, and then the tax bill comes around and
you're like, oh, crap, like that that's position you don't
want to want to find yourself in. And with property
(32:39):
tax and insurance bills going up, you're having an escrow
account means you won't have to come up with the
one thousand dollars plus more than you thought you'd need
in one fell swoop because those two bills came in
much higher than you assumed, which is happening to a
lot of people right now.
Speaker 1 (32:53):
Right. So if your if your tax bill from last
year was six thousand bucks, and you're like, it's probably
gonna go up, maybe I'll just like save seven thousand
dollars conservatively, I'd save eight right, Like I would be
I would be a little more conservative, just because I
wouldn't want to screw that up and not have the
cash on hand. To pay that tax bill. That would
be a tough situation to find myself in. And I
(33:13):
would also note that while it might be a really
good idea to dit chess Crow, it's not going to
be a massive money win. So this is kind of
a yeah, could it be better for you? Might be
it might be the best way to go. You'll be
able to keep money which would have otherwise been held
by your mortgage company in your savings, and yes, you're
going to earn interest on that, but I think at
the end of the day or at the end of
(33:33):
a year, you might be talking about one hundred bucks
or so in savings. So you know, while we'll dig
in further, just know that this is more of a
minor optimization question, and we're fans of optimizing. But yeah,
the stakes aren't gargang to in here. Yeah, I guess
it does depend on what you're paying.
Speaker 2 (33:47):
So I mean, I guess Steve said he's got like
maybe around seven thousand dollars in total. Again, not that
you have seven thousand dollars that's earning that annualized three
and a half to four percent a year, but like
you're building that up, so it's not as simple as
running with the rates, what the return would be on
eight seven eight thousand dollars at the end of the year,
because it's something that you're building up towards, it's.
Speaker 1 (34:07):
Not quite that much.
Speaker 2 (34:09):
But it also does depend on how much your your
property taxes are and what you're paying on insurance. Because
if you are in some communities where it's like, dude,
you have no idea how much I pay in property taxes,
I could see that being more of an argument to
drop escrow and instead banking that money, because if you
were to do that right, if you're thinking ahead, you
are sticking that money in your savings account, you will
(34:30):
earn interest on that money. And it might sound like
we're not fans of ditching escrow, we're actually I'm actually
for it.
Speaker 1 (34:37):
And one of.
Speaker 2 (34:38):
My favorite reasons is because if like you are a
diligent saver, if you're a type A person, you've checked
all the boxes and you are going to do this properly.
But on top of that, it's going to make you
more aware of how much you're paying for insurance and taxes,
making it more likely that you're going to appeal your
tax bill. It's going to make it more likely that
you'll shop around with different insurance companies. It's going to
make you more civically engaged in your city or your town,
(34:59):
or your state, whatever, if you are paying attention to
these things as opposed to being like, oh, whatever, it
just gets paid. I don't have to worry about it. No, No,
you do have to worry about it. And when you're
more directly connected, I think it makes you more responsive
to some of the different fluctuations and prices. There really
is a most likely not fluctuations, but just increasing prices.
Speaker 1 (35:17):
Yeah, and there really is a price sensitivity when it
comes to like how you feel the pain that you
feel because you're paying it out of your own checking
account instead of paying it over twelve months through your
escraal account, through your mortgage payment. That just feels like
it's baked in. It makes me think of like budget billing, right,
That's the vibes I get when when we talk about
paying your mortgage through ESCO's correlated man you are and
(35:38):
so you're just you're less likely, like you said, to
kind of challenge the property tax rate the bill that
you got if if it is abnormally high or something
like that. And there are easy ways to do that,
by the way, like out of sight, like own. Well,
but yeah, I think similarly to that budget billing you
on your electric bill, you're less likely to change your
thermostat because it's a straight up a hundred eighty five
(36:00):
dollars payment every single month. But if in the summer
you get a three hundred and twenty dollars bill from
your electricity company, you're like, well, well, I need to
think about what I'm doing with the thermostat. Same is true.
I think for property tax and for insurance, you're much
more likely to chopper on a save. Yeah, I totally agree.
Speaker 2 (36:19):
I will say one of the other benefits of paying
your taxes and paying your insurance on your own is
the fact that if you are totally on top of it,
it's less likely for things to fall through the cracks.
And that's something we've talked about on the show here before.
But maybe it's time for It's like, this is confession
time now for Matt, because when you're expecting your mortgage
(36:39):
servicer to completely take care of it, that's not typically
something you'll worry about.
Speaker 1 (36:43):
Jean, Is it right?
Speaker 2 (36:44):
You're like, oh, I don't have to worry about that
ascro's got it. And in the case of some of
these mortgage servicers, when they are selling, so it's the
company that underwrote the mortgage typically doesn't always service the loan,
right they end up selling it to one of these
companies who is then trying to market you some other
Helock products. They've got a little bit of a slicker interface,
more bells and whistles. To be able to offer you
(37:05):
another website. You have to come up with the username
and passwords into it's like, hey, by the way, we're
transferring your mortgage over to this new servicer. Well, that
happened to me. And something that happened Joel was that
one of a tax bill, property tax bill for one
of my properties, rental property, did not get paid. And
so you're thinking, okay, well, no big deal. I'm sure
the mortgage servicer was notified. They were not notified. And
(37:29):
you would also say, well, I bet they sent you
a notice. Well, yes, they did send me a notice,
but they sent me one notice. One notice after we
moved to the new place. And it happened to be
earlier this year when we were in the middle of
renovating our home. So our life was a little unorganized.
I'll say, like, let's just say, bills and things arriving
(37:50):
in the mail were getting buried under other things.
Speaker 1 (37:52):
And guess what. I had a property tax bill that
was sent.
Speaker 2 (37:56):
To a collections agency or our collections purchased that from
the city, and I couldn't believe it. I was like this, Well,
first of all, I thought it was a scam because
I'm like, no, I don't have a lien on my house. No, indeed,
I did have a lien on my house, and so
this is just this is when you don't want to
be like Matt little warning out there. And of course
(38:17):
I immediately got it and made sure that it was
legit paid it off, but I ended up having to
pay a couple hundred more because of interest accrued, but
because they paid most of it but not all of it,
so it was the balance. But then also the collections
company they packed a couple hundred bucks on there for their.
Speaker 1 (38:35):
Fee as well, because they're doing good work out there.
Speaker 2 (38:37):
Oh my gosh, so super annoying. And I was so
angry at the new mortgage servicer that completely it fell
through the cracks, right, And so the more folks who
were involved, including a mortgage servicer. That doesn't necessarily mean
that they can't make a mistake. I guess that is
what I'm saying. If I'm going to already keep up
with it, I might be looking to drop. And this
is something we've I've harped on about before in the past,
(38:59):
but I'm more likely now to drop ASCO more than
ever before.
Speaker 1 (39:03):
Yeah, that's all I'm so, Steve, as an individual can
make a mistake, but so can the mortgage company, and
it's important to recognize that and to stay on it.
Speaker 2 (39:10):
And so if you're at this point, I'm more likely
to trust myself than the mortgage mortgage company. If you're
gonna be the cop on the beat anyway, even though
I did make a mistake, I might as well do it,
do it yourself and take some of the other perks
that come along with ditching escro. So, Steve, if you
find yourself in that camp and you're like, no, I
got this, I'll be I won't have a problem saving
up the cash and paying those bills directly, then go
for it. I don't see the downside. I think for
some people who are perpetually disorganized. Matt, which here you go, thanks.
Speaker 1 (39:33):
For giving me an out. That's not you. That's definitely
not you. You were just disorganized for a short season.
So yeah, thanks for the question, Steve. We'll get We
got more to get to you, Matt, including what about
paying for childcare with a credit card. We'll talk about that.
Oh and we have a new emergency fund number you
should be shooting for. We'll talk about that too right
after this. All right, buddy, we are back from the break.
(40:02):
It is now signed for the Facebook question of the Week,
which is from Jessica. She wrote, my kid's daycare announced
that they will now be offering two options for payment,
automatic withdrawal from a paycheck with no fees, or by
credit card with a two point sixty five percent surcharge.
Until now, we paid with the credit card with no
surcharge to help earn reward points, and honestly, it's our
(40:22):
biggest single expense that we put on the credit card,
so it gets us a good chunk of points every month.
Speaker 2 (40:27):
We have the Chase Safire Preferred which for this payment
is just one point per dollar. So if I pay
right now, we pay eight hundred and twelve dollars a
month with a two point six five percent charge that
is twenty one dollars fifty cents a month more, which
sounds crazy, I know, But if it gets us more points,
is it worth it. I'm leaning towards no, but I
guess you could view it as a twenty one dollars
(40:48):
vacation savings plan, and if we use the points to
the most effectiveness, it could be worth more.
Speaker 1 (40:54):
I don't know.
Speaker 2 (40:55):
Help me out, all these smart people. Also, we pay
off our entire card balance every month. We have a
fully fund an emergency satings plan we say for retirement.
Speaker 1 (41:01):
Blah blah blah. All that, Joel.
Speaker 2 (41:03):
What you think, yeah, which you think about? Well, specifically,
what do you think about businesses starting to they're passing
the buck, you know, they're making us feel the pain
that the credit card processors have been sticking them with.
Speaker 1 (41:15):
I think it makes total and complete sense. And Jessica's
Daycare is not alone here, right, because small businesses like
that pay a lot to accept credit cards. And while
you know, many find it worthwhile to accept credit cards
despite the additional expense, they're saying, like, listen, if I
don't accept credit cards, people won't patronize my business, and
so it's a cost of doing business that I'm just
(41:36):
going to eat. Well, other companies are saying no, no, no, no, Yeah,
I mean yes, I'll accept credit cards, but I need
to pass that cost along, and consumers are getting more
and more used to it. Individuals are like, all right,
I guess the small business like, I'll if I really
want to use the credit card, I'll pay the fee.
And so those credit card exchange fees, I think they
could be like the third highest line item for restaurants
(41:58):
for instance, in particular, so a lot of small restaurants
like the credit card charges eat them alive, and if
people paid in cash, they would be doing better. And
I will say many businesses make more money by accepting
credit cards because people tend to spend more. So that
is part of the reason that they accept credit cards too. Yeah,
it comes with a fee, but it means that people
are actually going to spend more at my place of business,
(42:20):
then hey, it makes sense it's worth the trade off.
But that's far less likely with a daycare in particular. Right,
So I get that they're not willing to eat that
cost anymore. They're trying to pass it on. But as
the person with kids in that daycare, it's I get
why it's a little bit annoying at least because you're like, man,
this used to be this was my vacation, say explained,
(42:40):
they didn't cost me a dime, and now it's going
to cost me money.
Speaker 2 (42:42):
The rules are a change, and so from like an
ongoing standpoint, I would not be looking to pay for
daycare with that credit card on a recurring regular basis. However,
one exception to that would be if you've got a
new card that's got a certain spend threshold. Right, So
if you're trying to hit a spending threshold for a
welcome offer, if you're looking at a certain number of
certain thousand dollars over the course of the first three months,
(43:04):
that sort of thing, then that is one hundred percent.
An instance where I would continue to pay the two
point was six y five percent because what you're receiving
is in far excess of what it is that the
daycare is then charging.
Speaker 1 (43:17):
So let's say the daycare was charging one point eight percent, Well,
I would keep using your credit card to pay it.
No brainer, because you can get a two percent cash
back credit card pretty easily, and so I would like
the City Double Cash or the Fidelity Card and I would, well,
just use that card, and no matter what, you're always
going to be coming out ahead, even if it's only
slightly ahead. And so maybe just the ease of being
(43:40):
able to pay with a credit card on top of
that makes it worth it, even though if it makes sense,
it's it's a negligible it's a negligible win. So but
if the cost of using the credit card outweighs the
rewards using that credit card, then it just doesn't make sense.
And I think she's sort of calculating the fact that
points that she would earn are going to be worth
more because of the just the what they're worth when
(44:01):
it comes to redeeming those points, which is typically not
true unless you're really really good.
Speaker 2 (44:05):
You've got to be on the gate, Like, yeah, you've
got to be completely on top of the points game.
But even still, I think that the likelihood of you
coming on ahead is is slim compared to what the
guaranteed rate that you're paying is well.
Speaker 1 (44:17):
And on top of that, we've talked regularly about the
deflation of points and miles, and so you're you're like,
you have an idea of how maybe skilled you're gonna
be able to be in using those points. But if
those if those points get deflated over what you know,
why you're hanging on to them before you before you
use them, then you might find that your calculations were
off as well. One last ditch suggestion would be to
(44:39):
use a different credit card that does offer more cash back,
the like Bank of America's Customized Cash card and Citi's
Custom Cash. Those are cards I was gonna mention you
mentioned the double Cash if you're one point eight percent,
but the City Custom Cash you're looking.
Speaker 2 (44:51):
At five percent, right, which is that could offset? I
mean it does offset. It just depends if you're willing
to well jump through.
Speaker 1 (44:58):
Those oops could offset because there are limits right every
single month, So I do think the Custom Cash has
a five hundred dollars a month limit. The Bank of
America one has a twenty five hundred dollars a quarter limit.
So for Jessica, that boa Customized Cash might be the
best because you might be able to put literally every
single single dollar of the custom assed cash. Is that
(45:18):
is that three percent?
Speaker 2 (45:20):
Because then you're looking at being capped at five hundred Still,
I think the custom Cash actually comes out ahead.
Speaker 1 (45:25):
Sligh Okay, So run the numbers. On the numbers, I
would say, because yeah, one pays less percentage and has
a higher cap and vice versa. But yeah, is the
juice worth of the squeeze? It depends if you can
out earn with rewards that you don't have to like
jump through hoops to spend. And specifically, it's if it's
a cash back for spending any particular category and this
(45:45):
is your highest category using that card for that purpose especially,
I think it can make sense. But you just want, yeah,
want to look into the details, look into the fine print,
know which credit card is actually going to allow you
to come out ahead, because yeah, most of them will not.
Speaker 2 (45:58):
Let's take another quick one from myelin or mailing. She wrote,
what is the new emergency funds number? I can't remember?
And the money gear page on the website hasn't been
updated yet.
Speaker 1 (46:10):
That's on us for slackers. But now I will say
it is updated, updated, It is updated.
Speaker 2 (46:15):
Yeah, So thirty forty five, that's the number used to
be two four six seven, two four six seven. Now
it's thirty forty five.
Speaker 1 (46:22):
Yeah. Well, and that's because we adjusted it for inflation,
because that number first came out in the year twenty nineteen,
and the reason for that was what economists said, if
you have twenty four hundred and sixty seven dollars in
the bank, you're going to be prepared enough for the
vast majority of potential financial emergencies. It's that that amount is,
of course not going to be enough for a prolonged
(46:43):
job loss, but it's it's going to be enough to
handle most emergencies that come your way that you need
money to deal with unforeseen expenses. Yeah, but we were like,
it's twenty twenty five. How much do eggs cost versus
in twenty twenty five versus twenty nineteen. Experienced some serious
inflation in the past six years. Yeah, so we wanted
to update that number. We did, and now it's officially
updated on the website as well. Yeah, three zero four five.
Speaker 2 (47:06):
And I will say, there's nothing like magical about that number. Like, yes,
the economists did say that, oh, this is the amount,
but like they're also I mean, there's a range here,
so there's not anything financially or like from an accounting
standpoint that's super magic about that number. But I think
the most of the power comes from it being a
specific number. Yeah, and for you to have a goal,
something that you are shooting for, and like, literally, I
(47:29):
want folks out there who are hearing this for the
first time to set aside three thousand, forty five dollars,
not three grand.
Speaker 1 (47:35):
I don't want want them to shoot for that.
Speaker 2 (47:37):
The specificity of it matters, That's what matters exactly, And
knowing that you've got that set aside, I think that's
that's where most of the power comes from. When it
comes to that first money gear.
Speaker 1 (47:45):
There used to be this like church event map that
started at like a specific time and I can't even
remember seven twenty two.
Speaker 2 (47:52):
Yeah, oh yeah, I remember that, and that like, that's
so funny. Nobody forgot. I thought it wait to show
up for years.
Speaker 1 (47:58):
Yeah. And I think the same is true of this,
of this budgeting number, of this emergency fund number. It's like, wait,
how much do I need it?
Speaker 5 (48:04):
Again?
Speaker 1 (48:04):
Oh, you're not gonna forget because it's not like roughly
five grand or something like that. It's it's a it's
a highly specific number. And I think that that stickiness,
the way it bolts into our brains is really helpful
because and it just makes it more likely that we're
gonna achieve it, because we have something highly specific to
focus on instead of something more generic. That's rights.
Speaker 2 (48:22):
Let's quickly get to the beer that you and I
enjoyed today, which was called a white Ferrari. This is
a hazy double I p a by the veil. It
is not the only white Ferrari I can afford out
of Richmond, Virginia. Which you think about this one? People
drive white Ferrari's. I think they only came in red.
Speaker 1 (48:38):
I can tell you. I guess they come in black,
two white, one, though I'm sure they exist in white
probably somewhere.
Speaker 2 (48:42):
White feels more like Lamborghini to me, yeah, than Ferrari.
Speaker 1 (48:45):
Ferraris are red.
Speaker 2 (48:46):
Yeah, this plastic testaosa. This isn't isn't that literally translated
as redhead? Maybe Italian?
Speaker 1 (48:51):
I think I don't know. No, I regret saying that.
I don't know. But this beer was. It was fantastic.
It was so good. It was it was deep, it
was velvety. It was slightly bitter on the back end,
which you don't always get in kind of one of
those hazy East Coast styles. But I mean, the veil
just continues to crush on ipa.
Speaker 2 (49:10):
It was really good and it was also a bit dry.
It wasn't like like one of these tropical, fruity, juicy hazes.
And so because of that, the dryness made me think
of And now that I think about it, I think
it's because of the fact that it's called white ferrari,
but it reminded me of white pepper. You know that
you've gotten all these different kinds of like fancy peppers
and like crack it fresh or whatever, and pepper always
(49:31):
has like this, It's got like a dry kind of spice.
I think of white pepper for some reason.
Speaker 1 (49:36):
I don't know why. I bet pepper.
Speaker 2 (49:37):
I feel like it had this dry, hoppy, even a little.
Speaker 1 (49:40):
Peppery action going on. Yeah, I wish we got more
of their beers because I feel like that's one of
the that's one of the better East Coast breweries, the Veil. Yeah,
and I just want to try like all the beers
they brew. So maybe one of these days, well one
of these days we'll take a road trip up the
coasts in a white Ferrari go to the Veil. What
do you think Maybe this is like one of the
things you know we were talking earlier about, like different
(50:00):
side hustles we have. I wonder if just like the
days of visiting all the different breweries, is that just
like in the rear view to continue the White Ferrari metaphor, Yeah, no,
I don't think so. I've not set out to go
to a brewery for like specifically for that reason. But
if there's it's it comes down to what's close by,
right Like if I'm with the family and if I
can look something up and I'm like, oh, is this
(50:21):
a decent brewery, well, then we'll hit it up, especially
if they've got a cool outdoor space. I'm actually looking
forward to that. We're talking about the road trip earlier
in the episode, There's Drowned Lands is a brewery in
New York, Okay that I came across their stuff because
they had it at a local shop here in Marietta.
But the I literally put it on the on the map,
(50:41):
I green flagged love it because I was just like, oh,
that sounds like cool.
Speaker 2 (50:44):
First of all, it's a cool sounding brewery, but then
also they had a nice look an outdoor space for
the kids to run around and be free.
Speaker 1 (50:50):
That's huge rust at this point.
Speaker 2 (50:51):
Yeah, man, you know they want that full sized Jenga
set A little bit of cornhole. I don't know what
they do.
Speaker 1 (50:59):
Yeah, dicks, all sorts of a lot of things. Kids
are easy to please. All right, that's gonna do it.
For this episode. We'll link to some of the resources
we mentioned in the show notes up on our site
at how to mooney dot com. That's right, buddy, So
until next time, Best friends out, best friends out. Yeah.
(51:26):
Have you have you seen yourself add two birds? What
did you call them?
Welcome to How the Money. I'm Matt. I'm just kidding.
I'm Joel, and you're oh, you're.
Speaker 2 (00:05):
Actually gonna we're we're gonna run with it. I am Matt.
Speaker 1 (00:08):
That's right. Today we're answering your listener questions.
Speaker 2 (00:29):
You know what, buddy, just to completely throw I wonder
if folks actually thought, wait a minute, is that is
that Matt? They're like, no, that's that's Joel. He's just
lying to us. Some people say our voices sound alike.
So they do sound alike, and okay, here's what really
think they do? Well, they sound less alike for two reasons. One,
we are in a better acoustically treated room. Back in
(00:49):
the early days, when both of our mikes would pick
up both of our voices, our voices did kind of
meld together. Secondly, okay, three things. Secondly, we got better mics. Thirdly,
I actually, here's a little peak behind the curtain. I
put a slight pan on our voices. And so as
you are listening to this, and some listeners may have
picked up on this, they might notice that my voice
(01:09):
right now is coming through your left earbud slightly more
than your right earbud, which is where Joel's talking out
of right now, that's right. So Joel's on your right
side of your shoulder. I'm on the left side.
Speaker 1 (01:20):
And you know, on the right side is always the angel.
Speaker 2 (01:22):
I don't know which one is the angel and which
one's the little devil.
Speaker 1 (01:27):
I think it's obvious.
Speaker 2 (01:28):
Now this is our ask how many episode we're going
to hear from listeners asking questions, for instance, road trips
and used cars? Can they kill Mingle?
Speaker 1 (01:37):
We'll see.
Speaker 2 (01:37):
Another listener is asking for some specific steps when it
comes to combining his finances with his new wife, and
another is asking whether or not he is in a
good position to drop Escrow insurance.
Speaker 1 (01:49):
There with his mortgage. We'll get to those plus more
on today's episode.
Speaker 2 (01:53):
Sounds good, Yeah, man, got anything for us? Any any tips?
Speaker 1 (01:58):
Questions?
Speaker 2 (01:59):
Well, I was gonna say I was just emailing a
listener who he shared the newsletter with five buddies, which
means that he received a free beer on us on
Joel and Matt, And he said, yeah, actually, I just
I missed it because I assumed it was a late
tip because bartending is.
Speaker 1 (02:18):
His side hustle.
Speaker 2 (02:18):
So he's like, oh, I just did a wedding and
all of the tips always say beer because.
Speaker 1 (02:24):
It's a Venmo tips, and that's what we put when
we send you money on Venmo.
Speaker 2 (02:27):
Exactly sharing our news so two things. Check out the
how to Money newsletter how toomoney dot com forward slash
newsletter and sign up, and you share it with your
friends or family members. You'll get special perks from from
Joel and I.
Speaker 1 (02:39):
But eventually you can win the coveted how to Money socks.
Speaker 2 (02:42):
Yeah, you know nobody has taken us up on the
virtual hang.
Speaker 1 (02:47):
Nobody shared the newsletter that many times. Is it fifty
or forty? Well, I know I want to say we
dropped it, oh.
Speaker 2 (02:52):
Because we're like, oh man, nobody wants to. Nobody wants
to talk about it.
Speaker 1 (02:54):
If you share the newsletter enough, you get to spend
quality virtual time with us.
Speaker 2 (02:57):
Okay, here's my question for you. If you we're not
interested in personal finance. I know it's impossible to imagine,
but try to if in a world interested in personal finance,
if you didn't have real estate on the side, what
would your side hustle be. Because the reason I thought
on this is because I pictured him standing there pouring
up beers, serving glasses of wine. Chatting with guests at
(03:18):
the wedding, and I thought, man, that's what Jol.
Speaker 1 (03:19):
Needs to do.
Speaker 2 (03:20):
I feel like you would be so happy in that scenario,
just serving it up, chatting with folks, having a great time.
Speaker 1 (03:24):
The hours of bartending are not conducive to my lifestyle.
That's the worst. Like the actual job itself, I've never
done it, but I've always been I've always wanted to
because like just being Sam malonea cheers slinging beers and
talking to the crowd like that, that sounds pretty great
to me. So yeah, I could be up for it,
especially in a world where I didn't have, you know,
a life, three kids.
Speaker 2 (03:43):
Yeah, I get it, I get it. It's also hard
to remove that from the equation.
Speaker 1 (03:46):
You should be a barista probably right just came crafting
the coffee.
Speaker 2 (03:49):
So I really do want to learn how to pull
some really excellent shots as honestly as like training because
at some point I'm going to get my own espresso
machine at home. I want to build out a little
coffee like a cocktail and coffee corner of our kitchen
that's purely dedicated.
Speaker 1 (04:05):
For that espresso martinis NonStop.
Speaker 2 (04:08):
Well, I know that that seems like the logical outflow
of combining caffeine and cocktails.
Speaker 1 (04:13):
But I absolutely.
Speaker 2 (04:14):
Do not like espresso martini saying they're terrible. Yeah, I mean,
I don't know what it is about them that people
are drawn to you. I think it's just a weird
about an end drink. Yeah, that we've folks have been
experiencing over the past few years, no doubt.
Speaker 1 (04:26):
All right, that's all I got. Okay, you good? Yeah,
all right, right, let's mention the beer we're having. This
one's called White Ferrari. It's by the Veil Brewing Company
out of Virginia. We'll give our thoughts later. If you
have a money question, go Tohata money dot com, slash ask,
or just literally record your question on the voice memo
app of your phone and email it over to us.
Hopefully we can take it really soon. On the show, Matt,
let's kick this off. Let's take a question now from
(04:47):
a listener who wants to know about taking a road trip.
Should he rent a car or use the one he's got?
And actually it's kind of a question named towards you
as well. Angel and Matt.
Speaker 3 (04:59):
This is Rob me and Ellicate City, Maryland. I know
you both are big fans of driving high mileage, paid
off vehicles.
Speaker 1 (05:07):
I am right there with you, Matt.
Speaker 3 (05:09):
I know that you have a big summer road trip
coming up, and I'm curious whether you will take your
high mileage vehicle on that trip or if you'll rent
a car. I always struggle with the whole idea of
how confident am I that the hauler can make it
there and back with the family. Intel appreciate your perspective
and hope you have a great trip.
Speaker 1 (05:29):
Rob is so polite.
Speaker 2 (05:30):
He calls it a high mileage vehicle as opposed to
a clunker.
Speaker 1 (05:35):
Do you remember that, Rob?
Speaker 2 (05:35):
You make me feel good about my vehicle.
Speaker 1 (05:37):
It's just a high mileage. He's totally pc You remember
during the Obama administration there was something called cash for Clunkers,
a government program or get paid. That's right, And like
they didn't I didn't realize that I was a government
Broy didn't avoid the term. Yeah, yeah, he was. Well,
so that's because.
Speaker 2 (05:50):
They're trying to encourage you to offload. It was all
about the the evy green transportation man.
Speaker 1 (05:55):
That's right. I think I love this question, and it's
something that I I was curious to know before, because
I didn't, I hadn't asked you this yet. I was like,
are you going to take your head talked about it
or are you going to rent one? Especially given the
length of your road trip? And you know, when it
comes down to it, Matt, we know that opting for
a used car makes so much sense just from a
(06:16):
financial perspective. But if you're scared that you that your
used car, especially if it's getting really long in the tooth,
is going to hold up on a longer drive. So
I mean, yeah, you are going on this pretty extensive
road trip. We're not talking about a couple hundred miles,
We're talking about thousands of miles. So what are your thoughts?
Speaker 2 (06:32):
I think that's I mean, that's a large consideration as well,
the fact that I mean, like we're looking at driving
and we don't know our our exact itinerary just yet,
but we're at least going to be driving around three
thousand miles, if not more.
Speaker 1 (06:43):
This is over the course of a couple of weeks.
Speaker 2 (06:45):
And so first of all, there's the depreciation, right there
are estimates that cars appreciate at twenty cents a mile.
Speaker 1 (06:51):
I'm guessing that hours is probably less at this point.
Speaker 2 (06:53):
But if you run the math, we're talking about losing
six hundred dollars at least in value on the car
by putting it through its paces this degree. You say
that yours would depreciate less, and that's just because it's older.
Is older more to depreciate. So if you're talking about
a three year old used car will one, you're probably
not as worried about it it breaking down on you
or something like that exactly, But you're also going to
(07:13):
trade offs. Yeah, depreciate will cost you more putting those
miles on it, And so I will say I just
want ahead and second that out there. But I'm not
really thinking about the depreciation all that much.
Speaker 1 (07:22):
This is our vehicle.
Speaker 2 (07:23):
We're not necessarily looking I guess another way to think
about it too, is just instead of thinking about it
as depreciation, maybe I should be thinking about it as
wear and tear on the vehicle. But even still, I'm
not thinking about it through that lens as much. It's
more about the peace of mind.
Speaker 3 (07:38):
Uh.
Speaker 2 (07:38):
That means a lot more on a road trip like
this with a pretty tight itinerary. I mean we've got
stops in different cities. We don't want to roll in late.
We want it to unfold. I guess it's the way
we want it.
Speaker 1 (07:49):
To especial, especially for that private audience with the pope
that you've got.
Speaker 2 (07:53):
But the reason I mentioned this is because, like like
Rob said, when you've got the family in tow, I don't, man,
there aren't a lot of things that are more stressful
than having to make a major repair while on the
road while trying to travel and hit up multiple states,
multiple cities, multiple sites, things that we have tickets to, right, Like,
that's another thing. It's not like just checking in late.
It's a matter of, oh, man, are we going to
(08:14):
miss our tour? You know, things like that.
Speaker 1 (08:16):
Emily was taking the kids on a few hundred mile
trip and I was going to catch up to him
a few days later, and the alternator went bust, And
so that's always a possibility, like you can never And
it's a possibility too with a rental car. You might say, hey, great,
this thing's two years old, it's got twenty thousand miles
on it.
Speaker 2 (08:35):
But it's much less likely, I would say, that's compared
to like one hundred and fifty thousand mile.
Speaker 1 (08:39):
You're playing the odds long in.
Speaker 2 (08:41):
The is there an equivalent to long in the tooth
when it comes to vehicles, like long in the oodometers,
long in the radiator, something like that.
Speaker 1 (08:47):
So I had to race down there and we man,
we got so lucky with being able to replace the
alternator that day somewhere. Yeah, on a Saturday, nonetheless, when
a lot of shops are closed. But that's the kind
of thing that, yeah, can throw kink in into the plans.
I was going to pick them up and bring them
home and it was just going to be like trips
off for the time being, massive hassle. And so yeah,
I think you have to take those things at a consideration.
(09:09):
And if you're the kind of family that prioritizes high
mileage non clunker vehicles, Rob, those are the kind of
questions you have to have to wrestle with. And I think, Matt,
if you were to decide to take your own van,
you'd probably want to have it at least looked over
thoroughly before you win. Sure the fresh oil change right,
check in the tires, fluid levels, spark plugs, all that
kind of stuff would be why same thing for you, Rob,
(09:29):
if you're going to opt to go that route, just
make sure your your beautifully vintage vehicle is at least
up to snuff from everything that you can ascertain. I
think the nice thing about renting a car, especially when
you're going on a really long road tip, is that
you benefit from the from the unlimited mileage that you're
(09:50):
able to get through the rental car company.
Speaker 2 (09:52):
Right.
Speaker 1 (09:52):
So again, if you're driving a few hundred miles of
the course of a few weeks, you get less benefit. Right,
You're getting less bang for your buck. The risk is
a whole lot less too. But since Matt, you're driving
at least three thousand miles, you're probably going to do
more than that. I think the price of the rental
looks far more attractive because you're like beating the crap
out of the rental car and not your own. You
(10:13):
just get every dollar you spend on It just matters
more because of all the mileage you're avoiding putting on
your vehicle. And so I'd be leaning in that direction,
especially with the kind of travels you guys have planned
and totally that the time sensitive nature of not wanting
to screw that up.
Speaker 2 (10:27):
Yeah, one argument for folks taking their own car, and
this isn't something that we especially feel but I have
I have heard folks push back and say, well, I
want to take my vehicle like they have more like
they're more car people. This is because that they have
an emotional attachment to their car. That was one of
my dad's arguments for because I was trying to talk
them into getting an EV and he's like, well, I
can't drive that out to the Midwest and visit family.
(10:48):
I'm like, well, you just you rent a car when
you do that once or twice a year. He's like, right,
I want to be able to take my car. And
so that's the consideration that I know some folks have
in their minds, but that in this case this doesn't apply.
I'm like, no, it's not about the vehicle that we're
traveling as opposed to what we're doing as a family.
But for some people, part of what they're doing as
a family is the vehicle or they're traveling in.
Speaker 1 (11:09):
I get that, especially when you have an older car
that doesn't have some of the new fangled tech accessories.
Renting the car might.
Speaker 2 (11:18):
Prove good in that not even considered the entertainment says
so much is what I assume your friend?
Speaker 1 (11:23):
Yeah, yeah, no, I think There's also this.
Speaker 2 (11:25):
Like as a frugal versus cheap element to this question
as well, because if it was just me, Let's say,
for some reason, I was planning on doing this two
week road trip, Yes, but I was maybe planning on
doing it solo. Well, in that case, I would be
much more willing to take a well maintained, older vehicle
that I already owned, as opposed to straight up for anyone,
because you know, getting stranded on the side of the
(11:46):
interstate or even some country back road where it's just
me my backpack, it's no big deal.
Speaker 1 (11:50):
Says a little more fun and serendipitous when you're solo
than it does been.
Speaker 2 (11:53):
Like, I would even be willing to like consider hitchhiking,
which I've never done before, because I'm like, oh, kind
of sounds like an adventure, But putting the family through
an ordeal like that is not something that I would
be interested in doing that. Those are the kind of
memories that I think, I don't know, they would certainly stick.
Speaker 1 (12:08):
Yeah, I posted picks of our my hitchhiking adventures before
the chainsaw. Yeah from the whole bud light commercials. Yeah,
good times is fun. People are more reticent to pick
you up when you're with shady characters like my friend
Josh indeed. But yeah, I think you're right. I mean,
I think when one person is and you can kind
of roll with the punches, that's one thing. But kids
are not just the vehicle of the punches. Yeah, it's
(12:29):
it's the party. It's who you're rolling with as well.
That is something you got to take into acount. I
think it's similar like the idea of staying at a hostel.
I'm a ful, I don't care. That's fine. I'm in
my forties and I'm still down with that, but my
wife not as much, and so like you have to
kind of play around everybody's goals and dreams. I think
I would be willing to stay.
Speaker 2 (12:48):
I could stay in a hostele too, as long as
I had a comfortable bed. I think for me that's
kind of what it comes down to now. I don't
want to sleep on like someone's couch where it's slanted
and angled.
Speaker 1 (12:58):
As long as it's quiet.
Speaker 2 (13:00):
It it's a there's a comfortable mattress, and I have
control over the temperature, I think I would be able
to get a great night sleep.
Speaker 1 (13:06):
Yeah. Side note slight Tangent. Okay, so where you rent
your car matters to Matt, So you have you have
you talked through that, like where you're gonna go to
rent this car? Well, you're for sure renting a car, Yeah.
Speaker 2 (13:16):
For sure renting, and I am. We've kind of dragged
our feet because we haven't nailed down the itinerary yet,
and so because of that, we don't exactly know whether
we're coming back, like, oh, are we going to be
coming back on that Monday or that maybe that Tuesday,
or is it going to be more like that Wednesday
or Thursday. I have looked around a little bit though,
and of course looked over at Priceline.
Speaker 1 (13:35):
So what are the what are the rates?
Speaker 2 (13:36):
It's roughly a one thousand bucks okay, basically a thousand
bucks of all the different places I look, except for
the fact, I will say so looking on Priceline and
preparation for our trip, but also for Rob's question, I
was really shocked to see this what price Line called
an express deal and it was substantially less, so all
the other.
Speaker 1 (13:55):
Better than Costco, better than Yeah, well, I know you
like Costco, but I like Auto slash Tube by them.
Speaker 2 (14:01):
Oh I haven't checked out. I should definitely check out
autoslash is it dot.
Speaker 1 (14:05):
Com for all folks, and it's because they will continually
shop the price, that's right. Yeah, yeah, Okay, so I
got some homework to do. But here's the deal.
Speaker 2 (14:12):
The express deal specifically that I saw on Priceline was
for a rental and they don't name it, of course,
but it is only if I were to go pick
that up at the airport as opposed to a more
convenient pickup. And when we're talking, it was over well
over three hundred dollars. It was pretty close to five
hundred dollars in savings, oh wow, over the course of
two weeks, So it was like thirty three dollars a
(14:34):
day versus like eighty seven or something like that. That
was something I was not expecting, and I was almost
gonna pounce on it because I was like, well, shoot,
maybe this is some sort of lightning deal, limited time only,
but it's non refundable. So that was the main catch
with this one. And so once we nail down the itinerary, though,
I'm going to hopefully see if that's still available because
that's the kind of those are the kind of hoops
(14:56):
that I'm willing to jump through. Sure, if we're looking
at savings, not magnet, I'll.
Speaker 1 (15:00):
Drive you down there to pick it up. And so, yeah,
I think that's that's actually a really that's a really
good tip there too, because if you it's one thing
to look at a bunch of different rental car companies,
but it's another thing to look at different locations. And
so let's say you live twenty five thirty fifty minutes
from an airport, and you might be able to go
save a bunch of money getting it at the airport
(15:20):
location as opposed to the neighborhood location that's closest to you.
That's yeah, that's a hoop that's probably worth jumping through.
For a whole lot of people, that's big savings. So
I think one last thing that's probably worth mentioning is
when you rent a car, you might be able to
prioritize fuel economy. So for even if you're choosing a
similar kind of make right, like you have a minivan,
(15:41):
I'm sure you're probably gonna rent another minivan. You're not
gonna rent like a compact, Like no, yeah, it's not
gonna work out very well, but you might find that
the rental car gets an extra five six miles to
the gallon on the interstate, and when you're talking about
driving the distances you are, that could probably save a
decent chunk of change when you're as well. So I
would take all those things into consideration. But I think
(16:03):
the biggest thing, kind of like you alluded to at
the very beginning, is the peace of mind and the
being like, hey, we're gonna be able to hit our
spots the acts of God. Things always happen, right. There's
no way to completely ensure that nothing goes wrong with
even the rental vehicle. But I think for a lot
of people, depending on the price, depending on all those
different variables, that can make a lot of sense to
rent the car on that road trip instead of using
(16:25):
your own.
Speaker 2 (16:25):
That's right, Yeah, so Rob, we wish you the best
of travels if that's also something that you're planning to do. Joe,
we got more to get to, including a listener who
has a question about putting childcare on a credit card
for the benefits.
Speaker 1 (16:37):
We'll get to that and more right after this. All right,
we're back, Matt. We got more money questions we got
to get to, and listeners who just need to know
things about finances, and we're here to help. This next
question comes from a listener who just got married.
Speaker 4 (16:59):
Hey guys, this is justin from Kokemo, Indiana. I just
got married six days ago and my wife and I
are planning to combine our finances. I know this is
a topic you've discussed in the past, but I can
only find the content where you discuss the philosophy of
combining finances, but not the strategy. What are your suggestions
(17:20):
for going about creating a joint checking account, deciding how
much of each paycheck should be put into that combined account.
Should we keep our own separate accounts for personal spending money,
that type of stuff. Additionally, I've been using WINEAP for
over five years and I love it. She is not
(17:40):
interested in using WINEAP, so I'm just curious from the
budget app standpoint, what's the best way to view all
of our information in the same spot where I don't
have to put in her transactions for her.
Speaker 1 (17:56):
Any information you have would be greatly helpful.
Speaker 4 (17:59):
If you're ever north of Cocomo, come check out the
Coterie in Cocomo, Indiana. It is a cocktail bar, but
we have a huge selection of craft beers and the
best burgers in Indiana. Thanks so much.
Speaker 2 (18:11):
Okay, two things. What was it called the coterie, the coderie,
the couttery, and then also Cocomo. That sounds like a
place that should be, like in Hawaii or something.
Speaker 1 (18:19):
There was this band that he used to come to
my elementary school and they wud sing a song about Cocomo.
But I don't think they were sing when you were
talking about this code, so I don't think so. But
thank you for the recommendation. Justin sounds like an awesome place.
We're all about cocktails, burgers in addition to delicious craft beer.
Equal opportunity in bibers. Heck yeah.
Speaker 2 (18:37):
But briefly, I will say so, I know this is
in Justin's question, But the philosophy is that by combining
your finances helps you too to get on the same page.
You're you're paddling together in the same direction when you
combine your finances, and all the stats point to improved
happiness levels. It points to the ability to move towards
those mutual goals faster. But that being said, I think
(18:58):
that's what all. That's all we'll say on the philosophical
reasons why you should combine your money. Justin however, is
asking about the strategy.
Speaker 1 (19:06):
Joe's let's get to it. Let's do it. Let's do it.
So let's talk some logistics. And I do think that
the simplest thing to do is to combine your accounts,
to have one account that rules them all. Allah Lord
of the Rings is funnel everything, all of your income,
all of your spending through a single checking in saving
these account that has both of your names on it.
(19:27):
It's quite possible to keep your individual accounts and to
set up transfers to a shared main account, but I
just don't think it's as effective. And I know some
people mad, especially if it's like a second marriage. They're
just a little more reticent to combine all the way,
especially if they've been burned. So this isn't like a
judgment or hey, you've got to do things exactly the
way Matt and Joel tell you to do it, or
(19:48):
you're not doing it right. There are different ways to
make this happen and to make it work for you,
But I do think that the most effective way is
to have everything go into an account and let that
be the center what you call Matt the grand central station.
Of your finances, right, that's right. And I just think
that's a really effective way, both kind of mentally and
(20:09):
financially to do things. And I think the other way
i'd maybe encourage you to do that is to say
that you just got married, right, just a few days ago,
and you said some bows. They're pretty significant, right, I'm
gonna love you sickness and health till the day I die.
You're going to care for each other until the end
of time, right, So combining accounts, I think it's really
(20:31):
interesting to me that some people buck that. They're like,
I'm going to marry this person, but and I want
to say all these things when I marry them, but
we're not going to combine accounts. And I just I
don't necessarily understand that way of thinking. Again, unless it's
like this is my second or third marriage or something
like that. But I would suggest either using one of
your current bank accounts if you have a great online bank,
and adding the other as a co owner of that account,
(20:52):
or opening up a new account if your current bank suck.
If you're with one of the giant banks that we
talk trash about all the time, this is a great
time to create a fresh art bank account where you
get to go with one of the people that we say,
one of the institutions that is top notch and paying
good rates and has better customer service, and go with
them instead of going with the bank you've been with totally.
Speaker 2 (21:12):
All money going into that account, all money leaving that account.
You've got like this United Combined financial home base.
Speaker 1 (21:19):
I don't think you.
Speaker 2 (21:19):
Need individual accounts for spending money. Again, you can, but
something as simple as each of you having your own
credit card that feeds into why nop for record keeping,
I think that can work just fine.
Speaker 1 (21:29):
There's like less to keep track of it. It's like
it's simple, yeah, I've got this credit card, you've got
that credit card, but both of them going to wine apps,
so it's easy to keep track.
Speaker 2 (21:35):
Of hing or I mean, I think for a lot
of folks that's how they're able to have spending that
the other one doesn't know about it when it comes
to gifts that kind of thing. But otherwise, I think
even just having your own card and you just I mean,
you're using wineapps, so you've got different financial goals that
you've got set up in there. Two accounts is what
some folks are going to advise that. We think it's unnecessary.
I think it's potentially clunky. It also doesn't provide for
(21:58):
that individual legal protection for assets if the marriage.
Speaker 1 (22:01):
Were to dissolve, Like Joel said, for folks who have
just more difficult backgrounds. Some folks think that, hey, I've
got this account that's online with my money in it.
But in many states that doesn't protect your money. That
doesn't mean, oh, I've got this individual save us account
with my name and you have one with your name.
It would be a preu that want to cover yours right.
But in community proper state property states in particular, that
(22:23):
money's still going to get dibbat up fifty to fifty.
Speaker 2 (22:25):
And he mentioned too that his wife doesn't she's not
into why AB. I think it's totally okay to divvy
up responsibilities based on your respective strengths and your interests.
I think that you justin you're maybe more of a
nerd accountant CPA type who likes to listen to personal
finance podcasts.
Speaker 1 (22:41):
I get it. If you are in charge of tracking.
Speaker 2 (22:44):
And spending and why AB works best for you, I
think that's great, utilize it, But I think you're the
ability for y'all just to get on the same page.
Like she doesn't need to be sitting there right there
next to you as you're making the updates and providing
her the feedback, or as you're talking about some of
the different that you're both working towards. That can be
something that you predominantly focus on. Certainly, keep her informed
(23:05):
to the extent that she wants to be informed, But
beyond that, I think there's plenty of other things in.
Speaker 1 (23:10):
Life that you should be focusing on as opposed to
the numbers. By the way, I think I just made
like a legal comment, and I just want people to
know I'm not a lawyer, and I don't know very
much about that stuff, but I do know that you
should look into the laws in your state to be
aware of when you keep money separate, Like are you
actually protected in some way, form or fashion by doing that,
because in many cases you're not. That's true. And you
(23:31):
just talked about kind of the mutual involvement, Matt and
and I think you and I would both say that
both parties should be involved, both should play a role
and have a say in the finances. You know, we
want you to come to an agreement about goals and
savings rates and even investment options to kind of so
that both of you at least have an idea. Maybe
one of you has is leading the charge on that,
(23:53):
but that you're you're having discussions about it openly together. Yeah,
because then those shared goals are going to help determine
just how hard you work towards each individual component of
personal finances like investing, saving, spending, giving, And then those
goals are going to shift and morph over the years,
causing you to rethink things, right, dialing back or increasing
contributions amounts and given years. I think it's okay to
(24:17):
have like an eighty twenty or even like a ninety
ten responsibility split where it's like, hey, I'm in charge
here for the most part when it comes to finances
because it's what I'm interested in and you trust me,
and so I'm the wine ab guy and you don't
care about that stuff. I think it's totally fine. And
that's actually how a lot of relationships work. It's not
a fifty to fifty split. Similar how you might split
(24:37):
up like cooking duties. Maybe it's like, now I'm the
chef in this house, right, and you do the dishes
and that's pretty common, pretty normal. It's a fifty to
fifty split on cooking, I would say is more abnormal
but admirable if that works for you. But I think
one hundred to zero that's just not healthy. And that
can lead to marital issues down the road, and that
can lead one party to feeling like they're completely left
(24:57):
out in the dark on all the financial decision that
get made. And so I even if they want to
be left in the dark, it doesn't put you, It
doesn't put that partner in a strong position because then
you need to be clued in at least a little bit,
even if somebody like the other partner is pulling the
majority of the way. Yep, I agree.
Speaker 2 (25:13):
I'm thinking about how justin, I'm picturing maybe something that
is maybe a little more ninety ten. And I want you,
justin to find different ways to talk about some of
the different savings goals, some of the shared life goals
that you have with your wife in a way that
gets her excited. Because what I don't want you to
do is say, hey, Matt and Joel said this, and
if you are, she's like, who are those guys? I mean,
(25:35):
if you are all about why nap. It means that
you are into the numbers, which means you are going
to be most likely incredibly successful in reaching some of
your financial goals. It means you also know your savings rate.
Don't tell your wife that, Like, don't don't be like, oh,
guess what our net worth is pumped up to. I'm
guessing that's probably not something that she's going to be
(25:55):
all that interested interested in, as opposed to, well, what
does that mean for us being able to eat out?
Speaker 3 (26:01):
Like?
Speaker 2 (26:01):
Does that mean that we can take like, is it
our date nights back on the table because our savings
rate hit hit x percentage? Does this mean that we'll
be able to go visit my sister next summer even
though she lives on the other side of the world, Like,
find the things that she is interested in and help
bring personal finances alive because of some of these things
that you want to do in real life. As opposed
to just focusing on the numbers, I think that's really.
Speaker 1 (26:22):
Important to disinterested party. That's the best way to get
them at least a little interested in in what you
guys are trying to accomplish to Again makes me think
of a recent conversation you and I had about your
your workouts with Kate because you were like, oh, man,
I found this like nerdy details about strength training for women,
and you're like, but I'm not going to tell her
(26:42):
because she won't care, and she doesn't care, it'll probably
make her hate it more.
Speaker 2 (26:45):
Yeah, exactly, that's that's so true. And I was geeking
out because I'm like, oh, give me the data. It
was something that we've talked to Michael Easter, friend of
the show, right, but he's got a great fitness kind
of newsletter, lifestyle sort of stuff, and he just was
taking on women and muscle mass and longevity and caneser
just all of these different things. And guess who wasn't
going to be interested in that at all?
Speaker 1 (27:07):
Yeah, my wife. You want to make her cringe and
eyroll share that with.
Speaker 2 (27:11):
Her instead, I was like, you know, what I need
to do is to continue doing the thing that we've
been doing. Yeah, that she's been all about, which is
us working out together, me providing her the instruction, commenting
on her technique so that she doesn't get hurt. Like,
these are the things that she cares about as opposed
to the data. Yeah, the science.
Speaker 1 (27:27):
Yeah, she's not into that not everyone, not everyone cares
at that level, and it makes me think too, it's
important to have like regular check ins, right, especially especially
in the beginning. Put it on the calendar and make
it fun, so like whether it's over your favorite craft
beer after like before you watch a movie or something
like that. This do the twenty minute money check in.
You know, I think you might feel like those money
(27:47):
dates are overkilled because of how in sync you are
with your finances. But she she's going to need to
be let in in some way, and I think having
those on the calendar will be a way to do that. Matt,
you text Kate like, that's the way you involve her
in finances is like, hey, here's where things stand for
this month, and so it's a monthly thing.
Speaker 2 (28:04):
In a similar way, she's not going to log in
or she's not going to open up the file and
dive in to excel. But what she will do is
look at her phone when I am sitting there on
the computer, and I send her an update on spending
that much. And you probably felt early on, well, we
need to have more sit down meetings. But especially it's
running on all cylinders at this point, you don't feel
(28:25):
like a text message suffice is at this point, but
early on you might need a little more face to
face and to allocate a little more time for And
of course like once a year we'll have a big
sit down where we are spending some time on it,
diving into the numbers. But yeah, beyond that, it's just like, okay,
let's just tie this to some of the different goals
and priorities that we have.
Speaker 1 (28:43):
Last thing I wanted to mention real quick is just
to not forget to change the beneficiaries on your accounts
because you might not need a will yet maybe that's
coming down the pike, but make sure that you have
you've listed each other as beneficiaries in the back end
of your retirement accounts. That just supersedes a will in
most cases anyway. But that just makes sure that your
(29:03):
money if you were to pass goes to your new
spouse instead of going to whoever else you already had
listed on your account. You've probably already done it, but
just a reminder, it's really important thing to do. That's right, Joel.
Speaker 2 (29:15):
Let's get to our next question from a listener who
has a mortgage. He's not here to brag, but he
has an enviable mortgage rate.
Speaker 5 (29:22):
Hi, Matt and Joel. This is Steve from Plainfield, Illinois.
I was calling because I recently received a letter from
my mortgage company telling me that I have the option
to cancel my escrow because my loan to value ratio
has dropped below sixty five percent and I've been making
payments on time.
Speaker 1 (29:41):
I just didn't know if that was the right thing
to do or not.
Speaker 5 (29:43):
I didn't even know that this was an option. Just
give you some big basics about my mortgage. I still
owe about one hundred and fifteen thousand with that sweet
sweet two point seventy five percent, so that means that
my escrow payments are actually slightly more than my principle
and interest in each month. In terms of what is
sent to escrow, I pay about fifty four hundred and
(30:05):
property taxes and about fifteen hundred insurance. It adds up
to just under seven thousand in scrow on a yearly basis.
So I just didn't know if there was some any
upsides or downsides to canceling the escrow and just paying
the insurance and property taxes. Myself, I figured I'm the
type of person that would be able to plant that
money into a high yield savings account and you know,
(30:28):
just benefit from the interest.
Speaker 1 (30:31):
But I didn't know if there's anything I was overlooking, So.
Speaker 5 (30:33):
I'd appreciate any insights you have. Thank you very much,
Best listener out.
Speaker 1 (30:38):
Matt Some listeners might be might have just heard that
and said, what makes you think you're the best Steve.
Speaker 2 (30:42):
But well, if you said best Steve, then he only
limits offending all the Steves.
Speaker 1 (30:47):
That's right, that's right.
Speaker 2 (30:48):
It's like best Wayne, but that last week or a
couple weeks ago.
Speaker 1 (30:51):
Yeah, best Wayne out.
Speaker 2 (30:52):
It's not long ago, Steve. You should have gone with
best Steve out.
Speaker 1 (30:54):
That's right, that's right. But you might be the best
listener Steve, but I think two point seventy five. Yeah,
a lot of people heard that, especially in today's environment.
They're like, you lucky son of a gun. Yeah, that's
a so good. It really is sweet. Like give me
that mortgage rate straight into the veins, Matthew. And congrats
to Steve on being able to make substantially more in
(31:14):
savings and you're paying towards your mortgage debt. That is
just like a rarity upon rarities, right, and we just
I think mostly at the time, we didn't realize just
how good we had it those sub three percent mortgage rates.
Now we do, and to be able to make more
in just a straight up hiled saying us, it's crazy,
it's incredible to make a spread on money. Yeah, that's nuts.
Speaker 2 (31:34):
But let's talk about ditching escrow, because the argument for
sticking with the escrow model is that it's easier from
a budgeting perspective. Right, you know your monthly payment amount,
you pay it like clockwork. There's actual real benefits to that, right,
like the fact that this is not something that takes
up space in your brain, on your it's not on
your mind, and that's because it's incumbent on your mortgage
provider to pay the taxes and the insurance. Because those
(31:56):
bills tend to be pretty hefty. Some folks might find
themselves in position of not having the cash on hand
when when it's needed, and so having your mortgage to
escrow it essentially forces you to do the right thing
without you having to think about it. It prevents you
from getting too used to a smaller monthly payment that
doesn't then reflect the real underlying costs. So first of all,
(32:17):
you need to make sure that you're the kind of
person who doesn't just see a smaller payment is just
like sweet, Now I got more money to spend towards this. None,
of course, you need to be organized about it, you
need to be on top of it. And you're supersized
socking that money my vacation budget thanks to you know,
ditching escrow, and then the tax bill comes around and
you're like, oh, crap, like that that's position you don't
want to want to find yourself in. And with property
(32:39):
tax and insurance bills going up, you're having an escrow
account means you won't have to come up with the
one thousand dollars plus more than you thought you'd need
in one fell swoop because those two bills came in
much higher than you assumed, which is happening to a
lot of people right now.
Speaker 1 (32:53):
Right. So if your if your tax bill from last
year was six thousand bucks, and you're like, it's probably
gonna go up, maybe I'll just like save seven thousand
dollars conservatively, I'd save eight right, Like I would be
I would be a little more conservative, just because I
wouldn't want to screw that up and not have the
cash on hand. To pay that tax bill. That would
be a tough situation to find myself in. And I
(33:13):
would also note that while it might be a really
good idea to dit chess Crow, it's not going to
be a massive money win. So this is kind of
a yeah, could it be better for you? Might be
it might be the best way to go. You'll be
able to keep money which would have otherwise been held
by your mortgage company in your savings, and yes, you're
going to earn interest on that, but I think at
the end of the day or at the end of
(33:33):
a year, you might be talking about one hundred bucks
or so in savings. So you know, while we'll dig
in further, just know that this is more of a
minor optimization question, and we're fans of optimizing. But yeah,
the stakes aren't gargang to in here. Yeah, I guess
it does depend on what you're paying.
Speaker 2 (33:47):
So I mean, I guess Steve said he's got like
maybe around seven thousand dollars in total. Again, not that
you have seven thousand dollars that's earning that annualized three
and a half to four percent a year, but like
you're building that up, so it's not as simple as
running with the rates, what the return would be on
eight seven eight thousand dollars at the end of the year,
because it's something that you're building up towards, it's.
Speaker 1 (34:07):
Not quite that much.
Speaker 2 (34:09):
But it also does depend on how much your your
property taxes are and what you're paying on insurance. Because
if you are in some communities where it's like, dude,
you have no idea how much I pay in property taxes,
I could see that being more of an argument to
drop escrow and instead banking that money, because if you
were to do that right, if you're thinking ahead, you
are sticking that money in your savings account, you will
(34:30):
earn interest on that money. And it might sound like
we're not fans of ditching escrow, we're actually I'm actually
for it.
Speaker 1 (34:37):
And one of.
Speaker 2 (34:38):
My favorite reasons is because if like you are a
diligent saver, if you're a type A person, you've checked
all the boxes and you are going to do this properly.
But on top of that, it's going to make you
more aware of how much you're paying for insurance and taxes,
making it more likely that you're going to appeal your
tax bill. It's going to make it more likely that
you'll shop around with different insurance companies. It's going to
make you more civically engaged in your city or your town,
(34:59):
or your state, whatever, if you are paying attention to
these things as opposed to being like, oh, whatever, it
just gets paid. I don't have to worry about it. No, No,
you do have to worry about it. And when you're
more directly connected, I think it makes you more responsive
to some of the different fluctuations and prices. There really
is a most likely not fluctuations, but just increasing prices.
Speaker 1 (35:17):
Yeah, and there really is a price sensitivity when it
comes to like how you feel the pain that you
feel because you're paying it out of your own checking
account instead of paying it over twelve months through your
escraal account, through your mortgage payment. That just feels like
it's baked in. It makes me think of like budget billing, right,
That's the vibes I get when when we talk about
paying your mortgage through ESCO's correlated man you are and
(35:38):
so you're just you're less likely, like you said, to
kind of challenge the property tax rate the bill that
you got if if it is abnormally high or something
like that. And there are easy ways to do that,
by the way, like out of sight, like own. Well,
but yeah, I think similarly to that budget billing you
on your electric bill, you're less likely to change your
thermostat because it's a straight up a hundred eighty five
(36:00):
dollars payment every single month. But if in the summer
you get a three hundred and twenty dollars bill from
your electricity company, you're like, well, well, I need to
think about what I'm doing with the thermostat. Same is true.
I think for property tax and for insurance, you're much
more likely to chopper on a save. Yeah, I totally agree.
Speaker 2 (36:19):
I will say one of the other benefits of paying
your taxes and paying your insurance on your own is
the fact that if you are totally on top of it,
it's less likely for things to fall through the cracks.
And that's something we've talked about on the show here before.
But maybe it's time for It's like, this is confession
time now for Matt, because when you're expecting your mortgage
(36:39):
servicer to completely take care of it, that's not typically
something you'll worry about.
Speaker 1 (36:43):
Jean, Is it right?
Speaker 2 (36:44):
You're like, oh, I don't have to worry about that
ascro's got it. And in the case of some of
these mortgage servicers, when they are selling, so it's the
company that underwrote the mortgage typically doesn't always service the loan,
right they end up selling it to one of these
companies who is then trying to market you some other
Helock products. They've got a little bit of a slicker interface,
more bells and whistles. To be able to offer you
(37:05):
another website. You have to come up with the username
and passwords into it's like, hey, by the way, we're
transferring your mortgage over to this new servicer. Well, that
happened to me. And something that happened Joel was that
one of a tax bill, property tax bill for one
of my properties, rental property, did not get paid. And
so you're thinking, okay, well, no big deal. I'm sure
the mortgage servicer was notified. They were not notified. And
(37:29):
you would also say, well, I bet they sent you
a notice. Well, yes, they did send me a notice,
but they sent me one notice. One notice after we
moved to the new place. And it happened to be
earlier this year when we were in the middle of
renovating our home. So our life was a little unorganized.
I'll say, like, let's just say, bills and things arriving
(37:50):
in the mail were getting buried under other things.
Speaker 1 (37:52):
And guess what. I had a property tax bill that
was sent.
Speaker 2 (37:56):
To a collections agency or our collections purchased that from
the city, and I couldn't believe it. I was like this, Well,
first of all, I thought it was a scam because
I'm like, no, I don't have a lien on my house. No, indeed,
I did have a lien on my house, and so
this is just this is when you don't want to
be like Matt little warning out there. And of course
(38:17):
I immediately got it and made sure that it was
legit paid it off, but I ended up having to
pay a couple hundred more because of interest accrued, but
because they paid most of it but not all of it,
so it was the balance. But then also the collections
company they packed a couple hundred bucks on there for their.
Speaker 1 (38:35):
Fee as well, because they're doing good work out there.
Speaker 2 (38:37):
Oh my gosh, so super annoying. And I was so
angry at the new mortgage servicer that completely it fell
through the cracks, right, And so the more folks who
were involved, including a mortgage servicer. That doesn't necessarily mean
that they can't make a mistake. I guess that is
what I'm saying. If I'm going to already keep up
with it, I might be looking to drop. And this
is something we've I've harped on about before in the past,
(38:59):
but I'm more likely now to drop ASCO more than
ever before.
Speaker 1 (39:03):
Yeah, that's all I'm so, Steve, as an individual can
make a mistake, but so can the mortgage company, and
it's important to recognize that and to stay on it.
Speaker 2 (39:10):
And so if you're at this point, I'm more likely
to trust myself than the mortgage mortgage company. If you're
gonna be the cop on the beat anyway, even though
I did make a mistake, I might as well do it,
do it yourself and take some of the other perks
that come along with ditching escro. So, Steve, if you
find yourself in that camp and you're like, no, I
got this, I'll be I won't have a problem saving
up the cash and paying those bills directly, then go
for it. I don't see the downside. I think for
some people who are perpetually disorganized. Matt, which here you go, thanks.
Speaker 1 (39:33):
For giving me an out. That's not you. That's definitely
not you. You were just disorganized for a short season.
So yeah, thanks for the question, Steve. We'll get We
got more to get to you, Matt, including what about
paying for childcare with a credit card. We'll talk about that.
Oh and we have a new emergency fund number you
should be shooting for. We'll talk about that too right
after this. All right, buddy, we are back from the break.
(40:02):
It is now signed for the Facebook question of the Week,
which is from Jessica. She wrote, my kid's daycare announced
that they will now be offering two options for payment,
automatic withdrawal from a paycheck with no fees, or by
credit card with a two point sixty five percent surcharge.
Until now, we paid with the credit card with no
surcharge to help earn reward points, and honestly, it's our
(40:22):
biggest single expense that we put on the credit card,
so it gets us a good chunk of points every month.
Speaker 2 (40:27):
We have the Chase Safire Preferred which for this payment
is just one point per dollar. So if I pay
right now, we pay eight hundred and twelve dollars a
month with a two point six five percent charge that
is twenty one dollars fifty cents a month more, which
sounds crazy, I know, But if it gets us more points,
is it worth it. I'm leaning towards no, but I
guess you could view it as a twenty one dollars
(40:48):
vacation savings plan, and if we use the points to
the most effectiveness, it could be worth more.
Speaker 1 (40:54):
I don't know.
Speaker 2 (40:55):
Help me out, all these smart people. Also, we pay
off our entire card balance every month. We have a
fully fund an emergency satings plan we say for retirement.
Speaker 1 (41:01):
Blah blah blah. All that, Joel.
Speaker 2 (41:03):
What you think, yeah, which you think about? Well, specifically,
what do you think about businesses starting to they're passing
the buck, you know, they're making us feel the pain
that the credit card processors have been sticking them with.
Speaker 1 (41:15):
I think it makes total and complete sense. And Jessica's
Daycare is not alone here, right, because small businesses like
that pay a lot to accept credit cards. And while
you know, many find it worthwhile to accept credit cards
despite the additional expense, they're saying, like, listen, if I
don't accept credit cards, people won't patronize my business, and
so it's a cost of doing business that I'm just
(41:36):
going to eat. Well, other companies are saying no, no, no, no, Yeah,
I mean yes, I'll accept credit cards, but I need
to pass that cost along, and consumers are getting more
and more used to it. Individuals are like, all right,
I guess the small business like, I'll if I really
want to use the credit card, I'll pay the fee.
And so those credit card exchange fees, I think they
could be like the third highest line item for restaurants
(41:58):
for instance, in particular, so a lot of small restaurants
like the credit card charges eat them alive, and if
people paid in cash, they would be doing better. And
I will say many businesses make more money by accepting
credit cards because people tend to spend more. So that
is part of the reason that they accept credit cards too. Yeah,
it comes with a fee, but it means that people
are actually going to spend more at my place of business,
(42:20):
then hey, it makes sense it's worth the trade off.
But that's far less likely with a daycare in particular. Right,
So I get that they're not willing to eat that
cost anymore. They're trying to pass it on. But as
the person with kids in that daycare, it's I get
why it's a little bit annoying at least because you're like, man,
this used to be this was my vacation, say explained,
(42:40):
they didn't cost me a dime, and now it's going
to cost me money.
Speaker 2 (42:42):
The rules are a change, and so from like an
ongoing standpoint, I would not be looking to pay for
daycare with that credit card on a recurring regular basis. However,
one exception to that would be if you've got a
new card that's got a certain spend threshold. Right, So
if you're trying to hit a spending threshold for a
welcome offer, if you're looking at a certain number of
certain thousand dollars over the course of the first three months,
(43:04):
that sort of thing, then that is one hundred percent.
An instance where I would continue to pay the two
point was six y five percent because what you're receiving
is in far excess of what it is that the
daycare is then charging.
Speaker 1 (43:17):
So let's say the daycare was charging one point eight percent, Well,
I would keep using your credit card to pay it.
No brainer, because you can get a two percent cash
back credit card pretty easily, and so I would like
the City Double Cash or the Fidelity Card and I would, well,
just use that card, and no matter what, you're always
going to be coming out ahead, even if it's only
slightly ahead. And so maybe just the ease of being
(43:40):
able to pay with a credit card on top of
that makes it worth it, even though if it makes sense,
it's it's a negligible it's a negligible win. So but
if the cost of using the credit card outweighs the
rewards using that credit card, then it just doesn't make sense.
And I think she's sort of calculating the fact that
points that she would earn are going to be worth
more because of the just the what they're worth when
(44:01):
it comes to redeeming those points, which is typically not
true unless you're really really good.
Speaker 2 (44:05):
You've got to be on the gate, Like, yeah, you've
got to be completely on top of the points game.
But even still, I think that the likelihood of you
coming on ahead is is slim compared to what the
guaranteed rate that you're paying is well.
Speaker 1 (44:17):
And on top of that, we've talked regularly about the
deflation of points and miles, and so you're you're like,
you have an idea of how maybe skilled you're gonna
be able to be in using those points. But if
those if those points get deflated over what you know,
why you're hanging on to them before you before you
use them, then you might find that your calculations were
off as well. One last ditch suggestion would be to
(44:39):
use a different credit card that does offer more cash back,
the like Bank of America's Customized Cash card and Citi's
Custom Cash. Those are cards I was gonna mention you
mentioned the double Cash if you're one point eight percent,
but the City Custom Cash you're looking.
Speaker 2 (44:51):
At five percent, right, which is that could offset? I
mean it does offset. It just depends if you're willing
to well jump through.
Speaker 1 (44:58):
Those oops could offset because there are limits right every
single month, So I do think the Custom Cash has
a five hundred dollars a month limit. The Bank of
America one has a twenty five hundred dollars a quarter limit.
So for Jessica, that boa Customized Cash might be the
best because you might be able to put literally every
single single dollar of the custom assed cash. Is that
(45:18):
is that three percent?
Speaker 2 (45:20):
Because then you're looking at being capped at five hundred Still,
I think the custom Cash actually comes out ahead.
Speaker 1 (45:25):
Sligh Okay, So run the numbers. On the numbers, I
would say, because yeah, one pays less percentage and has
a higher cap and vice versa. But yeah, is the
juice worth of the squeeze? It depends if you can
out earn with rewards that you don't have to like
jump through hoops to spend. And specifically, it's if it's
a cash back for spending any particular category and this
(45:45):
is your highest category using that card for that purpose especially,
I think it can make sense. But you just want, yeah,
want to look into the details, look into the fine print,
know which credit card is actually going to allow you
to come out ahead, because yeah, most of them will not.
Speaker 2 (45:58):
Let's take another quick one from myelin or mailing. She wrote,
what is the new emergency funds number? I can't remember?
And the money gear page on the website hasn't been
updated yet.
Speaker 1 (46:10):
That's on us for slackers. But now I will say
it is updated, updated, It is updated.
Speaker 2 (46:15):
Yeah, So thirty forty five, that's the number used to
be two four six seven, two four six seven. Now
it's thirty forty five.
Speaker 1 (46:22):
Yeah. Well, and that's because we adjusted it for inflation,
because that number first came out in the year twenty nineteen,
and the reason for that was what economists said, if
you have twenty four hundred and sixty seven dollars in
the bank, you're going to be prepared enough for the
vast majority of potential financial emergencies. It's that that amount is,
of course not going to be enough for a prolonged
(46:43):
job loss, but it's it's going to be enough to
handle most emergencies that come your way that you need
money to deal with unforeseen expenses. Yeah, but we were like,
it's twenty twenty five. How much do eggs cost versus
in twenty twenty five versus twenty nineteen. Experienced some serious
inflation in the past six years. Yeah, so we wanted
to update that number. We did, and now it's officially
updated on the website as well. Yeah, three zero four five.
Speaker 2 (47:06):
And I will say, there's nothing like magical about that number. Like, yes,
the economists did say that, oh, this is the amount,
but like they're also I mean, there's a range here,
so there's not anything financially or like from an accounting
standpoint that's super magic about that number. But I think
the most of the power comes from it being a
specific number. Yeah, and for you to have a goal,
something that you are shooting for, and like, literally, I
(47:29):
want folks out there who are hearing this for the
first time to set aside three thousand, forty five dollars,
not three grand.
Speaker 1 (47:35):
I don't want want them to shoot for that.
Speaker 2 (47:37):
The specificity of it matters, That's what matters exactly, And
knowing that you've got that set aside, I think that's
that's where most of the power comes from. When it
comes to that first money gear.
Speaker 1 (47:45):
There used to be this like church event map that
started at like a specific time and I can't even
remember seven twenty two.
Speaker 2 (47:52):
Yeah, oh yeah, I remember that, and that like, that's
so funny. Nobody forgot. I thought it wait to show
up for years.
Speaker 1 (47:58):
Yeah. And I think the same is true of this,
of this budgeting number, of this emergency fund number. It's like, wait,
how much do I need it?
Speaker 5 (48:04):
Again?
Speaker 1 (48:04):
Oh, you're not gonna forget because it's not like roughly
five grand or something like that. It's it's a it's
a highly specific number. And I think that that stickiness,
the way it bolts into our brains is really helpful
because and it just makes it more likely that we're
gonna achieve it, because we have something highly specific to
focus on instead of something more generic. That's rights.
Speaker 2 (48:22):
Let's quickly get to the beer that you and I
enjoyed today, which was called a white Ferrari. This is
a hazy double I p a by the veil. It
is not the only white Ferrari I can afford out
of Richmond, Virginia. Which you think about this one? People
drive white Ferrari's. I think they only came in red.
Speaker 1 (48:38):
I can tell you. I guess they come in black,
two white, one, though I'm sure they exist in white
probably somewhere.
Speaker 2 (48:42):
White feels more like Lamborghini to me, yeah, than Ferrari.
Speaker 1 (48:45):
Ferraris are red.
Speaker 2 (48:46):
Yeah, this plastic testaosa. This isn't isn't that literally translated
as redhead? Maybe Italian?
Speaker 1 (48:51):
I think I don't know. No, I regret saying that.
I don't know. But this beer was. It was fantastic.
It was so good. It was it was deep, it
was velvety. It was slightly bitter on the back end,
which you don't always get in kind of one of
those hazy East Coast styles. But I mean, the veil
just continues to crush on ipa.
Speaker 2 (49:10):
It was really good and it was also a bit dry.
It wasn't like like one of these tropical, fruity, juicy hazes.
And so because of that, the dryness made me think
of And now that I think about it, I think
it's because of the fact that it's called white ferrari,
but it reminded me of white pepper. You know that
you've gotten all these different kinds of like fancy peppers
and like crack it fresh or whatever, and pepper always
(49:31):
has like this, It's got like a dry kind of spice.
I think of white pepper for some reason.
Speaker 1 (49:36):
I don't know why. I bet pepper.
Speaker 2 (49:37):
I feel like it had this dry, hoppy, even a little.
Speaker 1 (49:40):
Peppery action going on. Yeah, I wish we got more
of their beers because I feel like that's one of
the that's one of the better East Coast breweries, the Veil. Yeah,
and I just want to try like all the beers
they brew. So maybe one of these days, well one
of these days we'll take a road trip up the
coasts in a white Ferrari go to the Veil. What
do you think Maybe this is like one of the
things you know we were talking earlier about, like different
(50:00):
side hustles we have. I wonder if just like the
days of visiting all the different breweries, is that just
like in the rear view to continue the White Ferrari metaphor, Yeah, no,
I don't think so. I've not set out to go
to a brewery for like specifically for that reason. But
if there's it's it comes down to what's close by,
right Like if I'm with the family and if I
can look something up and I'm like, oh, is this
(50:21):
a decent brewery, well, then we'll hit it up, especially
if they've got a cool outdoor space. I'm actually looking
forward to that. We're talking about the road trip earlier
in the episode, There's Drowned Lands is a brewery in
New York, Okay that I came across their stuff because
they had it at a local shop here in Marietta.
But the I literally put it on the on the map,
(50:41):
I green flagged love it because I was just like, oh,
that sounds like cool.
Speaker 2 (50:44):
First of all, it's a cool sounding brewery, but then
also they had a nice look an outdoor space for
the kids to run around and be free.
Speaker 1 (50:50):
That's huge rust at this point.
Speaker 2 (50:51):
Yeah, man, you know they want that full sized Jenga
set A little bit of cornhole. I don't know what
they do.
Speaker 1 (50:59):
Yeah, dicks, all sorts of a lot of things. Kids
are easy to please. All right, that's gonna do it.
For this episode. We'll link to some of the resources
we mentioned in the show notes up on our site
at how to mooney dot com. That's right, buddy, So
until next time, Best friends out, best friends out. Yeah.
(51:26):
Have you have you seen yourself add two birds? What
did you call them?
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Joel Larsgaard
Matthew Altmix
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