May 2, 2025 • 34 mins
Time for a Friday Flight- our little sampling of the week’s financial news and what it means for your personal finances. There are a lot of headlines out there, but we boil them down to specific takeaways that will allow you to kick off the weekend informed and help you to get ahead with your money. In this episode we explain some relevant and helpful stories like: secondhand gifts, the #1 thing for financial well-being, how much you actually need in an emergency fund, thrifty trucks, the most affordable cars to insure, pricey parking, paying interest at the grocery store, performing a food waste audit, bye buy Temu and Shein, soaring secondary costs, how much life did that cost you?, & plummeting plane (tickets)!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Out of Money. I'm Joel, coming in hot.
That's how I roll, and I am Matt. And today
we're talking thrifty trucks, pricey parking, and soaring secondary costs.
Speaker 2 (00:28):
Maybe should I come in with a whisper? There you go.
That's right. Listeners, see they're all like backed away from
their speakers and there in their earbuds, and now I'm
trying to draw them back into the.
Speaker 1 (00:37):
If I cause damage to your electronic devices or to
your ear drums, please let me know how Out.
Speaker 2 (00:41):
Of Money shall not be held liable. This is, in
fact our Friday flight. We're going to tackle the different
personal not just the personal finance headlines, Joel, but the
all the headlines that are out there, and we're gonna
sort of massage out the personal finance wisdom that we
have discovered with the stories foreign policy or anything like that.
Though no we're not not those headlines, so we don't
(01:02):
do that.
Speaker 1 (01:02):
All right, Let's I want to start off, Matt with
a quick, frugal or cheap because our neighbors across the
street just had their their firstborn son just turned two,
and we had a birthday party with a little bouncy
house and all that stuff, and it was really fun,
fun my kids to take you back dominated that bouncy house.
I felt bad for some of the other two year
olds there, but.
Speaker 2 (01:21):
Got two hospital visits. Sorry again, Joel shall not be held.
That's right.
Speaker 1 (01:25):
You can't see me for that. But my my son
wanted to give their two year old son a bunch
of his old trucks and.
Speaker 2 (01:32):
So, ah, that's sweet.
Speaker 1 (01:33):
We had like a we keep like a little section
of stuff to give away for birthday presents, like if
we found it and it was like on a great
sale or something like that.
Speaker 2 (01:41):
We like pre buy it for the future. Yeah, you're
good about that. The birthday the present closet, birthday bind. Yeah.
So the birthday it's like the fun box in kindergartener
out a preschool. You get a you get to take
an item from the birthday bin.
Speaker 1 (01:53):
So we gave him like played out thing, right, but
un that he's gonna be excited about. But apparently the
gift he was most excited about was the pre owned
cars that my son gave him. He put them in
a separate bag and everything like that, and so that
was the most exciting President of the day.
Speaker 2 (02:10):
Was was a used gift. How is I don't know,
use use gifts to friends? Okay, Well, it completely depends
on the relationship because if you say it's cheap, I'm
blaming my son. By the way, it's all his fault.
I know these neighbors, and I know y'all are pretty
tight with them, and like you're living life together and
stuff ends up in other people's homes, and because of that,
it feels more acceptable. I think it's if this was
(02:32):
like a friend from school and you're driving over to
their house. If it's that sort of scenario, I think
you go with a new president, well you're more acquaintancey, Yeah, exactly,
when you're not as tight because I think here, here's
the deal. I think it's a younger Matt, and I
think younger Matt would have said, no, no matter what,
no matter who they are, secondhand gifts are fine. They're
gonna like it, and you kind of force it upon them.
(02:54):
But that is the very That was one of the
very definitions when we did the original Frugal Versus Cheap
episode of Cheapness is if you are imposing your quote
unquote frugality upon somebody else, that's when it and an
alchemy like way becomes cheap. Yeah, so I get that. Yeah, yeah,
that's I think I would be more predisposed to buy
new with acquaintances like you mentioned. But certainly it's a
(03:17):
good point. Certainly with my kids. I think used gifts
are fine. You just need a The presentation matters, though,
you know, like if it's like if it looks like
a used item as opposed to if it's you doll
it up a little bit, dress it up, like if
it's if it's still in the eBay box and you
haven't even like opened the box and you're like, oh, yeah,
let's see what's inside there. That feels cheap versus taking
(03:38):
the item, putting it in a gift bag or something
right to where you are demonstrating that, hey, this thing
still has value. And not only does it still have value, yes,
you've put some thought into it, and it's cool to
go secondhand as well. There's like multiple messages that you
can kind of weave into that weather with your own kids,
but also with the right neighbor or with the right
friends as well.
Speaker 1 (03:58):
I think that's a really good point. And the more
you know them, the more they know you and your idiosyncrasies,
the more they're gonna be like, oh yeah, that's kind
of par for the course for them. And guess what
turned up. The used trucks were his favorite gift. Anyway,
that's awesome, kind of awesome.
Speaker 2 (04:12):
Plus, I love the passing down of certain prized possessions
amongst kids in a neighborhood. Yeah, there's something that is
essentially getting woven, like like your lives are getting woven
together in a kind of messy way, which feels like
the heart of any sort of community, right, Like you
want an element of that for sure, Joel. Let's talk
about one of our favorite brokerages, one of our favorite
(04:33):
companies out there to invest with, Vanguard. They've got this
new study out turns out the strongest predictor of financial wellbeing.
It's not being a savvy investor, it's not being a
really good stock picker. It's also not required to have
a Mensa level IQ or anything like that. The Vanguard
study found that just having two thousand dollars in your
(04:53):
savings account, that right there is actually the strongest predictor
of financial wellbeing. And here on the show, and we
talk about emergency funds pretty often, and this highlights why
that's another underrated reality of not having enough money in
your emergency fund, feeling that, oh, I'm gonna have to
actually tap some of those investments. I'm not gonna let
them cook, not gonna let them compound over the year.
(05:16):
But in addition to that, the distraction that's created just
from living with no margin in your life as well
is detrimental to our financial wellbeing. Vanguard found that people
with no savings that they spend over six hours a
week thinking and worrying about their finances while on the job,
as opposed to just one and a half for folks
(05:36):
who have cash on hands.
Speaker 1 (05:37):
It makes sense, makes sense because you're living on the
financial precipice, that one bill that comes in kind of
knocks you flat. And it is amazing how not having
cash in the bank just makes you more susceptible, more vulnerable,
more stressed out.
Speaker 2 (05:51):
More stressed. You're looking at then you're logging in your
credit card and be like, ooh, how much credit do
I have left? Oh? When's that payment due? Okay, danget
the interest payments? About the plan is working on overdrive.
Speaker 1 (06:00):
It's yeah, it's harmful to a mess to you from
a stress standpoint. From an anxiety standpoint, this obviously has
an impact on the quality of work you do right
on your job security as well. If you're the kind
of person who is logging into their bank account to
try to figure this stuff out. If you're sleuthing on
your finances six hours a week while you're at work,
that's going to have an impact on your performance. It's
(06:20):
going to get noticed.
Speaker 2 (06:21):
It makes you think back to some of the studies too.
At some of the higher level government or military jobs
require you to have a certain level of buttoned upness
when it comes to your finances because they want you
to be less susceptible to bribery. If some carrots are
being dangled in front of you that have a whole
lot of dollar signs on them, you're going to be
more likely to be I don't know, a foreign operative.
Speaker 1 (06:44):
Yeah, it's like the goal the gold bar shoved into
your pocket doesn't matter as much. Like if you've got
enough cash on hands and you're like, no, I don't
need this. Actually is that the gold is the New
Jersey Senator. That's right, that's right. So he and his
wife both found.
Speaker 2 (06:58):
Guilty for that. Yeah, unfortunately, so well fortunately, because we
don't need to have that thing going on, right, it's
unfortunate that they it happened.
Speaker 1 (07:04):
Yes, well, fifteen percent of people in this study with
two thousand bucks said they were stressed about finances versus
fifty one percent of folks who were stressed because they
didn't have the saving So it's just interesting. It makes
complete and total sense that if you have a little
bit of money on hand, you are far less stressed out.
The value of an emergency fund just goes far beyond
having money to pay for what you need if you
(07:26):
find yourself in a financial bind. And it's just fascinating
too to see. I think some people think, well, I'll
be less stressed once I have this massive buffer built up,
once I have this much my net worth gets to
this point. Well, the truth is you're at least eradicating
the worst kinds of stresses with just a small pittance
in your in your savings camp two grant.
Speaker 2 (07:47):
That's why we talk about the basic emergency fund. That
is step number one creating some financial margin in your life.
And it used to be two thousand.
Speaker 1 (07:53):
It's not just step number one, it's money gear number one.
Speaker 2 (07:55):
I'm sorry, Yeah, so off brand. Use the proprietary language, please, sir,
four and sixty seven dollars. With inflation, especially that we've
experienced over the past several years, it is now three thousand,
forty five dollars thirty forty five. Remember that that's how
much we want you to have in your savings account.
Speaker 1 (08:11):
I like that too, because I like a specific, sticky number.
When yeah, man, that is gonna that's the thirty forty
five way to go Vanguard with two grand, but we're
gonna say thirty forty five is an even better number. Yes,
it gives you a little bit more money, but it's
still achievable for the vast majority of people.
Speaker 2 (08:27):
So, Joe, something you and I were both really excited
about last week towards the end of the week was
the unveiling of that awesome EV or specifically an electric truck.
This is a twenty thousand dollars affordable EV and it's
not even the supposedly fantastic ones that BYD is creating
over there in China, which doesn't even really matter because
I doubt we're going to see any of those. But
(08:49):
a Jeff Bezos back startup called Slate Auto is launching
a bare bones electric truck that if the current electric
vehicle and that have remain is supposedly going to cost
less than twenty thousand dollars. And evidently they're gonna start
delivering these things next year. And holy cow, man, I'm
(09:09):
so excited. I don't think I've been excited for the
Teslas are cool. Certainly when the ribbans came out, I
was They're gorgeous. Yeah, we kind of drooling over them.
I'm just like, I don't know how I'm gonna Why
do all evs have to be luxury vehicles? And that's
the difference here, because these things are incredibly cheap. The
reason being is because they are very minimalistic. They don't
(09:31):
have stereos, they don't have power windows, which was my
favorite feature.
Speaker 1 (09:35):
The fact that they don't have power at home. I
love those little roller things. I'm totally down to roll
my windows open the school, dude.
Speaker 2 (09:42):
There's no big screen in the center of the dash.
It specifically called out manual AC and heat controls like
the old school buttons, just like we are currently rocking
in our old vans. Basically, the car is a blank slate,
so it's called slate Auto, but it's you know, it's
kind of like a blank slate. Yeah, if you want
to spice it up, you can. It's got all these
(10:02):
different accessories that you can add on. You can even
turn it into a five seater suv, which I.
Speaker 1 (10:07):
Just think it's like five grand to add that one.
Speaker 2 (10:10):
I see.
Speaker 1 (10:10):
I think it's I saw that in one article about
it because I was I was concerned, or at least interested, Well,
how much is that gonna.
Speaker 2 (10:16):
TV model is going to cost you? Thirty five? Right?
Speaker 1 (10:18):
How'd you go from twenty to thirty five? Yeah, but
apparently it's it's an extra five grand to add on.
Speaker 2 (10:22):
We can get behind that twenty five thousand for a
five seater suv even just like a little truck, a
little like I can so see Kate and I having
one of these, just the putts around town. And just
given the amount of gardening that we do, to be
able to.
Speaker 1 (10:33):
Load mulch in the back of the truck bed, to
be able to put four by eight sheets of plywood
back there.
Speaker 2 (10:37):
Man, this is I love it. And it's a smaller truck.
Speaker 1 (10:40):
When you look at the size, it's not as small
as what are they what do they call the Japanese
are they the K trucks. Yeah, cars, It's not quite
as small as that, which is good for me. I
might actually be fit in it as someone who's.
Speaker 2 (10:51):
Six with six those are comically small, whereas this is
just like reasonably small, like nineteen eighties Toyota small, which
those are like the coolest trucks anyway, like the small
tell you it is from ladies.
Speaker 1 (11:01):
This is huge groundbreaking. I think I'm so glad to
see someone launching a car finally at like the lower
end of the cost spectrum for people who and I
think there's probably more people than just us two money
nerds who are interested in this.
Speaker 2 (11:16):
Matt.
Speaker 1 (11:16):
I kind of think so, especially as car costs have
been rocketing upwards and people are like, yeah, i'd be
down to do the EV thing, but they're really expensive,
and so yeah, I think this is this is going
to reach a lot of people. You and I we
both plunk down a fifty dollars deposit to purchase one.
It's refundable not to go with it, right, And you
might be thinking, wait a second, Matt and Joel, they're
always talking smack about new cars. Who are these guys
(11:39):
who really might buy this new truck when it comes out, well,
this new car would be less than half the price
of the average new car, and it would be cheaper
than the average cost of a used car.
Speaker 2 (11:52):
So I love it.
Speaker 1 (11:54):
Not that I would spend that much anyway typically, but
like the problem with new cars is that they keep
getting bigger, they keep getting fancy, yes, power, everything becomes standard.
I just think that the market is crying out for
a bare bones creation process, and and in what that
does essentially to the pricing of those automobiles, it allows
them to price them this competitively. Uh, And that no
(12:18):
frill segment of the population has been completely ignored in
the car buying population.
Speaker 2 (12:23):
So uh.
Speaker 1 (12:24):
I really think, Matt, that this has a lot of
legs to it. I'm curious to see what one looks
like in person. I'm curious to see how.
Speaker 2 (12:31):
This launch goes.
Speaker 1 (12:32):
So cool, but I have a feeling a lot of
how to money listeners are like, Yeah, I just kind
of want something that's gonna get me around and be
a little comfortable. I don't mind if I have to
stick my own Bluetooth speaker in there to listen to
my music, because.
Speaker 2 (12:43):
Guess what I'm doing that alright, that's my recommendation for
you last year, just like, oh, it's kind of annoying
that I had. I listened to it from my phone.
Doesn't get you a Bluetooth speaker, yeh. And it's so
cool that that's literally a part of their like want
to listen to music from the ground up? Oh my gosh.
Of course, Like there are just simpler, more bare bones
ways to accomplish the things that we thought required all
the technology or all the factory settings to be just
(13:06):
the defaults. I mean, we've talked about this recently too,
Just how like when did kitchens get so nice? Yeah,
and we've I don't want to change the conversation and
switch to homes, but like, think about homes from the
eighties and the seventies and the sixties even versus kitchens.
Now may we consider normal? Is it's so long luxury
twenty years ago. That's great if you can afford it,
But man, I want to see more fews out there.
Speaker 1 (13:29):
But sometimes sure, it's like I'd rather find my money
on other things.
Speaker 2 (13:32):
So yeah, yeah, I love it, And I hope that
we are not the only ones that are going to
get excited about this. I really want to see this
little company out of Troy, Michigan takeoff too. It says
Troy because that's what it said on the credit card statement. Really,
it always like says like the name of the company
and specifically where they are.
Speaker 1 (13:47):
Yeah, yeah, I was like thrilled to put fifty bucks
down on this list. And yeah, my Rivan R two,
it might be I got.
Speaker 2 (13:54):
A whole lot less attractive, less attract I'm gonna ahead
and pull that deposit back. Yeah, we'll see. By the way,
don't forget about the cost of insurance. Always check with
your insurance company before buying a new or a used
car because you might be shocked at what it costs
to ensure, especially evs these days because of the batteries.
But Clippinger, they wrote about the cheapest cars to ensure,
(14:15):
and man, guess what the car that both of us own.
It's on the top five cheapest cars. I celebrated when
I saw that. Uh, the sup Odyssey, the subrou aut Back,
Nissan Rogue fourd Escape, Jeep Wrangler. They were the other ones.
The most expensive cars to ensure were they are the
I should say, Cadillac Escalade, Dodge Charger, Tesla Model's Challenger.
(14:38):
You said charge when I say charger, Oh, no, the Challenger.
What's the difference between the two. I don't know if
they look similarly. I think they're not like luxury cars either.
I wonder if it's because there's sports cars, yeah, but
they're not like super high end, so I wonder if
it's just because they tend to get rex. I will say,
when you're driving around and you look in the riview
and somebody's riding your tail, oftentimes it is a I
feel like it is a challenger, a hard charger. But
(14:58):
the price gap between the these models, right, So the
most expensive and the least expensive can be up to
fifteen hundred dollars a year, which is so much money,
and as insurance costs rise, as they become more of
a threat to your budget, driving used cars will typically help, sure,
but driving the right used car is going to make
a massive difference as well. Matt.
Speaker 1 (15:17):
Let's talk about parking and how much parking can cost you.
These days, airport parking prices specifically are getting really bad,
and Hartsfield Jackson in Atlanta is about to start charging
seventy five dollars a day to park at their domestic
lots and one hundred dollars a day if you park
at the super super fancy I guess international lot.
Speaker 2 (15:39):
I don't know.
Speaker 1 (15:39):
I don't know how you get super fancy with parking.
Speaker 2 (15:41):
But is it called the Lexis lot.
Speaker 1 (15:43):
That's I mean you have to have Lexus kind of
money at the airport and sponsorship, right, So this is
all in an effort to raise money to fun new
parking lots, because of course new parking lots. I hate
everything about this. When I saw this story, it made
me want to like stick my in my I'm sure
a lot of business travelers are just gonna pay this
(16:04):
because that's what business travelers often do. That's what they
do when it comes to high airfares. They just kind
of fork over the money. They're not as thoughtful about
their businesses money as their own. But even they shouldn't
do this because when you look at the numbers, booking
at an off airport lot costs a fraction of the price.
I'm talking sub ten dollars a day, and it's even
(16:25):
cheaper if you book ahead. Right, So if you if
you sign up for the dates you want at an
off airport lot, you're gonna you're gonna pay as low
as like six to seven dollars a day, which is insane,
a far cry from one hundred dollars a day. And
they're even and I know this is a blaster on
the past map. You can get pretty good deals for
airport parking on Groupon. So I don't really ever use
(16:47):
group on anymore, but I have for airport parking because
it saves you even more you take it away back.
Speaker 2 (16:52):
Yeah.
Speaker 1 (16:52):
Remember I still remember when Google tried to buy Groupon
for like eight billion dollars or something, and group on
was like, now we're good.
Speaker 2 (17:00):
Remember they're probably worth a fraction of that. But I
remember scout Mob that was though. Yeah, that was like
the hips. Group on that was cool, like the mustache.
I don't even know if it was just no, don't
I don't think it does.
Speaker 1 (17:09):
So just be thoughtful when you're traveling and parking those
airport lots. Off airport lots, they're actually actually pretty convenient
with parking and then the shuttling you to the airport,
it's it's pretty easy. It's not like it's a massive
inconvenience and how much money you're gonna save is insane.
And then one other thing, Uber is offering van pools
at more airports these days. They just announced a new
(17:31):
van pool at the Atlanta Airport ten dollars to get
from like mid down Midtown down to the airport with
your luggage, which seems pretty reasonable to me.
Speaker 2 (17:39):
I agree, Joel. We got more to get to. We're
gonna talk about why everything costs more than you think,
plus other personal fundance stories. We'll get to all of
that right after this quick break. All right, we're back
that now is time for the ludicrous.
Speaker 1 (17:58):
Headline of this one comes from CNBC and it reads,
more Americans or financing groceries with buy now, Pay Later loans,
and more are paying those bills late, survey.
Speaker 2 (18:10):
Says oh Man.
Speaker 1 (18:13):
I hate to talk about buy Now, Pay Later again
because I think this is something that we like talk
back about pretty regularly. But there just aren't many headlines
that could break my heart more than this. The fact
that the survey found twenty five percent of buy Now
Pay Later users are using installment loans to pay for
groceries these days, like in essential a need, and more
(18:34):
than four and ten have paid late on one of
these loans in the past year. I feel like by
Now Pay Later, it's it's like a virus. That's spreading
and more and more people.
Speaker 2 (18:45):
It's like snuck into the under the guys of Oh,
this is going to make life easier.
Speaker 1 (18:50):
That's right, that's right, yeah, which sounds nice. Like anytime
someone's like, I'm going to make your life easier, it's
like why not cool? That sounds great, but it's actually
what do they say, like, when you do the easy thing, well,
you're gonna pay, You're gonna have to do the hard
thing later or versus like doing the hard thing up
front and then your life gets a little bit easier
down the road.
Speaker 2 (19:08):
And I think I think that should be like a
quick synopsis of what how to money is all about. Like, yeah,
over the hard thing first, that's like the philosophical approach
to how we do things here out how to money. Yeah,
And if you take the easy approach to paying for stuff,
which by now pay later is the quintessential reality of that,
then you're going to have a hard time later. And
it's the youngest and most vulnerable among us who seem
(19:28):
to be taking the bait the method. Really, it seems
seems reasonable on the surface. Sure, I'll pay for this
in for installments, and I'm not going to be charged
any interest. But it's a slippery slope because a quarter
of buy now pay later buyers take on a bunch
of these loans at once. And the truth is, we
buy more when the friction is reduced, and now when
you're unorganized as to what you got going on out
(19:49):
of your accounts as well. I think that's a part
of it that's right, And.
Speaker 1 (19:52):
So it feels like you have to do this in
order to be able to afford the things that you want,
and you're buying more than you actually need because of it,
and then when it gets into groceries, I feel like
it we've completely.
Speaker 2 (20:02):
Lost the plot. I find it interesting as well that
more than sixty percent of binolpay later users think that
on time payments is that that is going to help
boost their credit score, which might be true in the future,
but it isn't right now, at least for the majority
of the different binil pay later companies out there. It
is true with like a firm Apple pay Later, they
report as well, but there.
Speaker 1 (20:22):
Are they haven't started putting it into the credit scoring model,
and there are a.
Speaker 2 (20:25):
Whole lot of companies that aren't reporting at all. And
so it turns out most folks don't understand how these
payment plans work much less than the behavioral impact that
they have on their finances. In our advice is to
stay away and like, there's a lot of new companies
and anytime there's a new it's like the wild wild
West when it comes to payment options. And it makes
sense too that younger users are jumping on this because
(20:46):
they're more willing to experiment and try new things. But
new cool fintech, Yeah, I'll try. Why not? But as
we have more and more options before us, as our
attention is more fragmented, that leads to confusion, and it
leads to a lot of folks feeling overwhelmed and not
feeling that they have their arms wrapped around, in this case,
their finances. Yeah. Another constant reason though for higher food costs,
(21:08):
at least on our sort of monthly budgets, is the
never changing reality of wasting food families, Joel, they throw
away a third of what it is that they purchase,
which is slightly better than I thought it was a half,
So like literally I thought it was like I think
it's somewhere it was close to a half of thirty
five ish to forty percent, So depending on who you ask.
(21:28):
I actually I almost saw this as like an improvement
based on maybe where things were I don't know, at
the height of individual spending and the amount of cash
that folks surplus, cash that folks had in their household.
Speaker 1 (21:39):
I've never account I've never known a human to love
leftovers more than you do. So I know that this
disappoints you more than anything else. Obviously, it's a great
idea to eat out less. It's a good idea to
pivot to store brands and specifically to shop at ALDI.
But dude, if you're not cooking and actually eating the
food that you buy before it spoils and goes bad,
and not eating your leftovers, obviously you're gonna pay far
(22:01):
more for your food than you should. So similar to
talking about the different payment options, I think a lot
of it has to come A lot of it comes
down to the fact that we have so many different
food options, yes, available to us as well.
Speaker 2 (22:11):
Not just oh which buy now, pay later? Which payment
terms am I gonna opt for when it comes to
affording these groceries, But then when it comes to the
actual food that we are purchasing, like it's so silly
to go to the more mainstream or higher end grocery stores,
and you've got all the options before you, as opposed
to going to all the and your options are limited.
And it makes it so that when you come back
(22:33):
and you put all the things in your fridge, I
think you are more likely to use some of those
ingredients as opposed to overbuying over purchasing, because it's so
easy too, because of buy now, pay later. And then
you take all these groceries, you shove them in your
fridge and you can't see half the stuff because everything's
stacked on top of everything. That's why. That's why everyone's
got the little tub of salad at the back of
(22:53):
the fridge that's turned to mush. Yeah that you're like,
oh man, we're gonna have to toss this, or you're like,
what's that smell? And then you realize, oh, it's that
there's a lemon down there at the bottom of the
produce beIN that's turned blue. It's got the blue fuzz
on it, and they turn blue. Yeah, I guess, yeah,
But what happens is you most people are just like,
oh gross, and then they just grab the whole bag
of lemons or oranges and then they end up tossing
(23:14):
it into the trash.
Speaker 1 (23:15):
I think BNPL hate it. It's basically the wrong answer
to the right question. The right question is like, man,
my food budget, it's punching me in the face. How
do I fix this? And BNPL is positioning itself to
be like, look at us, we're over here, we'll help
you out. And yet the right answer involves going in
the opposite direction, which is to consider what you buy,
(23:37):
what you bring in, how much you're spending on groceries,
and then using what you have bought. Because that it
feels so old school. It feels so old school. But man,
old school works so much of the time. Still, you
don't need the new fangle BNPL with the flashy marketing
and stuff like that and what seems like it's going
to work out better. Ultimately, it's going to lead to
not knowing where your money is going and spending more
(24:00):
money than you're just going to lead.
Speaker 2 (24:01):
To constrained budgets. Have you heard of this thing called
a food waste audit before? Oh? I think I heard
of it, so okay, I've never I've literally never heard
of this, and came across this link to it in
the show notes. But basically, man, I love this so much.
You take a sheet of paper, you set it over
near the trash can, and every time so you just
pick like a normal week, every time you take something
out of the fridge or I guess out of the
(24:22):
pantry as well, and if it's bad or stale, and
you toss it in the trash, force yourself to write
down the item and estimate the cost. And then not
the end of the week, you tally up how much
money you are waste. Multiply by four. Maybe you've got
a monthly a monthly understanding of how much you're wasting
every single month. Mull that hey rule of one seventy three.
(24:42):
Take that monthly amount, you multiply about hundred and seventy three.
Now now we're really talking. We're taking it to the
next level, because that is, were you to not waste
that money and instead invest it in the market, that's
how much you would have on hand at the end
of ten years. So you're thrown away real money, not
just pennies. It's it's like literally taking almost literally I
should say, taking money and just putting it right in
the trash.
Speaker 1 (25:02):
I mean, I hate that. There's a step in between.
But that is what you're doing. All right, man, Let's
talk tariffs for a second. And you know, I know
you and I we've we've talked about it a lot,
hoping not to have to talk about it forever into
the future. But Amazon announced earlier this week that it's
going to it was going to display the cost of
tariffs next to certain goods for sale on the site.
(25:23):
I think it was going to be kind of in
their Amazon Hall section, which was there. It's not kind
of their competitor to Shean and Timu. But then what
they wanted to highlight was essentially the Trump impact of
higher prices that these tariffs were going to cause. And
then Jeff Bezos took a call from Donald Trump. It
appears that's no longer happening. And they were also like, actually,
it was never happening, even though there were reports that
(25:46):
it was happening. It was in the works. We changed
our mind, right, And the Wall Street Journal said, actually,
the public, I'll quote here, the public could have used
Amazon's price transparency. Tariffs are taxes and tellful to know
how policy choices affect final prices. That's right, and I agree.
I think that transparency from Amazon would have been helpful,
and I think it probably would have helped to sour
(26:07):
some consumers about tariffs because they would have been like,
wait a second, I heard all this stuff talk about tariffs,
but how much is it actually costing me? And they'd
find out with that as broken out essentially in the pricing.
We're gonna find out even if it's not broken out though.
But most companies, they don't like tariffs and they want
to show their customers, at least some of them, the
exact impact that they have on the bottom line. I
(26:28):
think we're going to see more and more of that,
and you can't blame them. On top of this, Matt
cheap Chinese goods, they're cheap no longer. Those two companies
I mentioned earlier, Timushi, in which again I've never purchased
anything from either of those sites. Apparently their prices are
going up, doubling the costs of many of the items
they sell.
Speaker 2 (26:46):
One more thing on the tariff specifically, so that was
because the Dominimus loophole, which literally expires today may second.
So it's not to say that Chinese goods you can
still buy cheap Chinese stuff online, you just can't buy
it directly from China where they're shipping it straight from
the factories where they're avoiding all the important duties and
whatever it.
Speaker 1 (27:06):
Is, because that price has got to go up, right,
So on top of that, shipping volumes to US ports
are plumbing. And even with some of the larger tariff delays,
the reality of tariffs, it's it's really only we're only
at the very infancy starting to begin to feel the impact.
So I do think we're going to see higher prices,
fewer options if this the way tariffs are currently constructed
(27:28):
remain or or if potentially they get worse.
Speaker 2 (27:30):
Yeah, and don't forget about the secondary costs of everything
that we buy as well. That's something else that we
often failed to take into account. Right, So let's say
you want to buy a TV. Obviously it requires electricity,
and then so right there you see the yellow sticker
on there when you buy it, predicting how much it's
going to cost you to watch your favorite shows every
single year. Well, there's a Wall Street journal tech writer
who highlighted a trend that we've all been subject to
(27:53):
more recurring subscriptions. So instead of paying for that new
gadget straight up getting to use it as you please.
You might pay a reduced price. It's like a hidden
price whatever, right, or a false price, maybe, I should say,
and then you pay an annual fee to unlock his
full potential. We talked about at some point. I think
it was last year that we talked about the heated
seats that aren't digitally unlocked unless you pay the subscription. Yeah,
(28:17):
or maybe it was a heated steering wheel as well.
Super annoyed. That was BMW Right, BMW What I said?
Speaker 1 (28:23):
Where Hey, yeah, no, this comes with TVID seats, but
you got to pay to access them exactly.
Speaker 2 (28:27):
Luxury brands terrists though, could cause an influx of subscriptions
in order to keep the initial price low. Because folks
are used to paying a certain amount, it's going to
feel painful to pay more upfront. So essentially, how can
we sneak these higher costs in the back door?
Speaker 1 (28:41):
I could could Apple find a way to make the
price of the iPhone.
Speaker 2 (28:44):
I guarantee you're thinking about it half as.
Speaker 1 (28:46):
Much or something, in order to in order to reduce
what they pay in tariffs and create like a subscription
model where you pay them monthly instead. It's all about
the subscription man. Yeah, yeah, yeah, because you don't pay
tariffs on subscriptions.
Speaker 2 (28:59):
Keep that in mind. Keep in mind the additional cost
before you click something to buy it, think about the
secondary costs.
Speaker 1 (29:05):
Just one basic thing that like, some of my friends
have the Whoop fitness bands, right, you and I we've
got the garment watches. Yeah, and it wasn't just because
the initial cost was lower, although it was, but the
Whoop band comes with the monthly subscription fee to access
the data that you're racking.
Speaker 2 (29:21):
It and a lot of folks are pay for it
for a year and us in order to get the
best deal, right, I don't even know how much it costs,
but I don't know whether it's but I know that
I pay zero dollars tax us all the data from
the running that I'm doing, So yeah, that factors in, right, Hey,
how much?
Speaker 1 (29:34):
What's not just like what's the initial cost? What's the
outlay right now? But think about what are the costs
down the road that I'm going to occur by buying
this thing? It really matters, Like, and I think the
more we can think about the things we buy in
that way, we're probably it's going to at least like
force our hand to think about our purchases differently, and
we might find ourselves buying less or at least pivoting
to buy other items that are going to have lower
(29:58):
secondary costs.
Speaker 2 (29:59):
That's true. Another way to help us decide what to
buy when not to buy in an era of rising
prices is to consider prices in terms of time. So
basically CPI. It's not a great metric because let's say
we were talking about TV's earlier, the TV you bought
back in the eighties, it does not compare to the
one that you can buy today. It's much better now
and it costs a whole lot less. And superabundance is
(30:22):
about how much richer we've become things to global competition
for the good book trade. Yeah, the reality that it
just takes us less time working in order to earn
incomes to pay for basics like food and energy, which
is a good thing. This is something that we love.
It shows that we can afford more of everything now.
This is like the heart of progress. But it makes
(30:42):
me think that we should all figure out our hourly rate.
And this is another topic we discussed way back in
the day is episode ninety nine, and I think going
through that exercise. It can create this subtle mental shift
because the next time you're thinking about buying something, I
think you might be more keen to think about how
long you would have to work in order to afford
that item, which could be a better way of thinking
(31:04):
about it. You know, I think that one reframe could
prevent some ill advised purchases and just to cause you
to say again, second guess, Reframe things put it in
a different light to where you're not just thinking about
how it's going to make you feel in the moment,
but what you're thinking about is what about future me
or what are the alternatives, or how much is this
actually going to cost me a little bit further down
the road, not just what I have to pay upfront
(31:26):
right now?
Speaker 1 (31:27):
The one hundred and eighty bucks feels really different than
saying that's gonna take me six hours of work, and
especially if you don't like your job.
Speaker 2 (31:34):
Yeah, that will hopefully make you think.
Speaker 1 (31:36):
Twice about whether or not you really want to buy
the thing, because if it means you got to, you
gotta go, you know, put in some additional hours in
order to and you don't always have to put in
additional hours, but you're reframing it in terms of thinking
about how much of my time is involved in getting
this item, And I just think that's a better way
to think about it. And that also is going to
make you less likely to buy things you don't need. Well,
(31:58):
at least it'll take you fewer hours of work to
buy that next plane ticket. Now, we just had Scott
Kay's our buddy on to talk about cheap travel, who
knows more about that than he does. But as he predicted,
right when the economy softens, travel is an easy item
to reduce spending on, Like you're like, hey, I don't
have as much money rolling in, or prices are higher.
(32:20):
That's just one of the first places where people naturally say,
I guess I'm not going to buy that plane ticket
and go to Connecticut instead, I'll just drive right or
I'm not going.
Speaker 2 (32:28):
To take the trip this year, or we're staying home.
Speaker 1 (32:30):
Yes, And so as demand for travel softens, the deals
get better, and we're in the midst of this time
where deals are getting better. The cost of airfare is
actually lower than it was, not just like last year
or two years ago, but it's lower than it was
fifteen years ago. So that's like a silver lining to
all the inflation we've seen recently. It's like, well, there
(32:52):
are certain parts of the market, certain segments that we're
not experiencing that, and airfare is a specific one.
Speaker 2 (32:57):
Good for travelers, not good for line stockholders, for that
is for sure.
Speaker 1 (33:02):
Because all the major airlines they're they're kind of worried
about demand in the coming months. They're they're pulling financial
outlooks that they typically offer. Business travel is seeing a
real demand pull back to, which is one of those
things that they could typically count on. Even if consumers
like you and me pull back on a vacation, they're like, well,
business traveler and they're still going to be at it. Well,
sorry Delta and United, but congrats to everybody who's listening
(33:25):
who's like a deal hungry traveler with money to spare.
Now is a better time. I literally just booked some
plane tickets last.
Speaker 2 (33:31):
Night and where are you going.
Speaker 1 (33:33):
Well, this is a family trip or taking in Hawaii
this summer, so I'm very excited.
Speaker 2 (33:36):
Oh you uh put the final leg finally pulled the trigger.
Speaker 1 (33:40):
Yes, us some miles on some of some of the
plane tickets and used cash on the rest.
Speaker 2 (33:45):
So nice, I know, you're getting nervous because you've got
a really good deal on one leg and you're just
still camped out waiting, trying to nice. Glad you got
a good deal.
Speaker 1 (33:52):
So I hope everyone else out there takes advantage of this, like, hey,
when when prices on airfare sinking and when these the
UH airline are offering more deals out there, if you've
got the spare cash to take advantage, it might be
a better time to.
Speaker 2 (34:05):
Take that trip. Very nice. Well that's gonna be it
for this episode of your favorite podcast, How to Money.
We hope everyone has a fantastic weekend. We'll see you
back here on Monday. Thought we were their fourth favorite
podcast podcast and until next time. It's really nice of them.
Best friends out, best friends Out.
Welcome to Out of Money. I'm Joel, coming in hot.
That's how I roll, and I am Matt. And today
we're talking thrifty trucks, pricey parking, and soaring secondary costs.
Speaker 2 (00:28):
Maybe should I come in with a whisper? There you go.
That's right. Listeners, see they're all like backed away from
their speakers and there in their earbuds, and now I'm
trying to draw them back into the.
Speaker 1 (00:37):
If I cause damage to your electronic devices or to
your ear drums, please let me know how Out.
Speaker 2 (00:41):
Of Money shall not be held liable. This is, in
fact our Friday flight. We're going to tackle the different
personal not just the personal finance headlines, Joel, but the
all the headlines that are out there, and we're gonna
sort of massage out the personal finance wisdom that we
have discovered with the stories foreign policy or anything like that.
Though no we're not not those headlines, so we don't
(01:02):
do that.
Speaker 1 (01:02):
All right, Let's I want to start off, Matt with
a quick, frugal or cheap because our neighbors across the
street just had their their firstborn son just turned two,
and we had a birthday party with a little bouncy
house and all that stuff, and it was really fun,
fun my kids to take you back dominated that bouncy house.
I felt bad for some of the other two year
olds there, but.
Speaker 2 (01:21):
Got two hospital visits. Sorry again, Joel shall not be held.
That's right.
Speaker 1 (01:25):
You can't see me for that. But my my son
wanted to give their two year old son a bunch
of his old trucks and.
Speaker 2 (01:32):
So, ah, that's sweet.
Speaker 1 (01:33):
We had like a we keep like a little section
of stuff to give away for birthday presents, like if
we found it and it was like on a great
sale or something like that.
Speaker 2 (01:41):
We like pre buy it for the future. Yeah, you're
good about that. The birthday the present closet, birthday bind. Yeah.
So the birthday it's like the fun box in kindergartener
out a preschool. You get a you get to take
an item from the birthday bin.
Speaker 1 (01:53):
So we gave him like played out thing, right, but
un that he's gonna be excited about. But apparently the
gift he was most excited about was the pre owned
cars that my son gave him. He put them in
a separate bag and everything like that, and so that
was the most exciting President of the day.
Speaker 2 (02:10):
Was was a used gift. How is I don't know,
use use gifts to friends? Okay, Well, it completely depends
on the relationship because if you say it's cheap, I'm
blaming my son. By the way, it's all his fault.
I know these neighbors, and I know y'all are pretty
tight with them, and like you're living life together and
stuff ends up in other people's homes, and because of that,
it feels more acceptable. I think it's if this was
(02:32):
like a friend from school and you're driving over to
their house. If it's that sort of scenario, I think
you go with a new president, well you're more acquaintancey, Yeah, exactly,
when you're not as tight because I think here, here's
the deal. I think it's a younger Matt, and I
think younger Matt would have said, no, no matter what,
no matter who they are, secondhand gifts are fine. They're
gonna like it, and you kind of force it upon them.
(02:54):
But that is the very That was one of the
very definitions when we did the original Frugal Versus Cheap
episode of Cheapness is if you are imposing your quote
unquote frugality upon somebody else, that's when it and an
alchemy like way becomes cheap. Yeah, so I get that. Yeah, yeah,
that's I think I would be more predisposed to buy
new with acquaintances like you mentioned. But certainly it's a
(03:17):
good point. Certainly with my kids. I think used gifts
are fine. You just need a The presentation matters, though,
you know, like if it's like if it looks like
a used item as opposed to if it's you doll
it up a little bit, dress it up, like if
it's if it's still in the eBay box and you
haven't even like opened the box and you're like, oh, yeah,
let's see what's inside there. That feels cheap versus taking
(03:38):
the item, putting it in a gift bag or something
right to where you are demonstrating that, hey, this thing
still has value. And not only does it still have value, yes,
you've put some thought into it, and it's cool to
go secondhand as well. There's like multiple messages that you
can kind of weave into that weather with your own kids,
but also with the right neighbor or with the right
friends as well.
Speaker 1 (03:58):
I think that's a really good point. And the more
you know them, the more they know you and your idiosyncrasies,
the more they're gonna be like, oh yeah, that's kind
of par for the course for them. And guess what
turned up. The used trucks were his favorite gift. Anyway,
that's awesome, kind of awesome.
Speaker 2 (04:12):
Plus, I love the passing down of certain prized possessions
amongst kids in a neighborhood. Yeah, there's something that is
essentially getting woven, like like your lives are getting woven
together in a kind of messy way, which feels like
the heart of any sort of community, right, Like you
want an element of that for sure, Joel. Let's talk
about one of our favorite brokerages, one of our favorite
(04:33):
companies out there to invest with, Vanguard. They've got this
new study out turns out the strongest predictor of financial wellbeing.
It's not being a savvy investor, it's not being a
really good stock picker. It's also not required to have
a Mensa level IQ or anything like that. The Vanguard
study found that just having two thousand dollars in your
(04:53):
savings account, that right there is actually the strongest predictor
of financial wellbeing. And here on the show, and we
talk about emergency funds pretty often, and this highlights why
that's another underrated reality of not having enough money in
your emergency fund, feeling that, oh, I'm gonna have to
actually tap some of those investments. I'm not gonna let
them cook, not gonna let them compound over the year.
(05:16):
But in addition to that, the distraction that's created just
from living with no margin in your life as well
is detrimental to our financial wellbeing. Vanguard found that people
with no savings that they spend over six hours a
week thinking and worrying about their finances while on the job,
as opposed to just one and a half for folks
(05:36):
who have cash on hands.
Speaker 1 (05:37):
It makes sense, makes sense because you're living on the
financial precipice, that one bill that comes in kind of
knocks you flat. And it is amazing how not having
cash in the bank just makes you more susceptible, more vulnerable,
more stressed out.
Speaker 2 (05:51):
More stressed. You're looking at then you're logging in your
credit card and be like, ooh, how much credit do
I have left? Oh? When's that payment due? Okay, danget
the interest payments? About the plan is working on overdrive.
Speaker 1 (06:00):
It's yeah, it's harmful to a mess to you from
a stress standpoint. From an anxiety standpoint, this obviously has
an impact on the quality of work you do right
on your job security as well. If you're the kind
of person who is logging into their bank account to
try to figure this stuff out. If you're sleuthing on
your finances six hours a week while you're at work,
that's going to have an impact on your performance. It's
(06:20):
going to get noticed.
Speaker 2 (06:21):
It makes you think back to some of the studies too.
At some of the higher level government or military jobs
require you to have a certain level of buttoned upness
when it comes to your finances because they want you
to be less susceptible to bribery. If some carrots are
being dangled in front of you that have a whole
lot of dollar signs on them, you're going to be
more likely to be I don't know, a foreign operative.
Speaker 1 (06:44):
Yeah, it's like the goal the gold bar shoved into
your pocket doesn't matter as much. Like if you've got
enough cash on hands and you're like, no, I don't
need this. Actually is that the gold is the New
Jersey Senator. That's right, that's right. So he and his
wife both found.
Speaker 2 (06:58):
Guilty for that. Yeah, unfortunately, so well fortunately, because we
don't need to have that thing going on, right, it's
unfortunate that they it happened.
Speaker 1 (07:04):
Yes, well, fifteen percent of people in this study with
two thousand bucks said they were stressed about finances versus
fifty one percent of folks who were stressed because they
didn't have the saving So it's just interesting. It makes
complete and total sense that if you have a little
bit of money on hand, you are far less stressed out.
The value of an emergency fund just goes far beyond
having money to pay for what you need if you
(07:26):
find yourself in a financial bind. And it's just fascinating
too to see. I think some people think, well, I'll
be less stressed once I have this massive buffer built up,
once I have this much my net worth gets to
this point. Well, the truth is you're at least eradicating
the worst kinds of stresses with just a small pittance
in your in your savings camp two grant.
Speaker 2 (07:47):
That's why we talk about the basic emergency fund. That
is step number one creating some financial margin in your life.
And it used to be two thousand.
Speaker 1 (07:53):
It's not just step number one, it's money gear number one.
Speaker 2 (07:55):
I'm sorry, Yeah, so off brand. Use the proprietary language, please, sir,
four and sixty seven dollars. With inflation, especially that we've
experienced over the past several years, it is now three thousand,
forty five dollars thirty forty five. Remember that that's how
much we want you to have in your savings account.
Speaker 1 (08:11):
I like that too, because I like a specific, sticky number.
When yeah, man, that is gonna that's the thirty forty
five way to go Vanguard with two grand, but we're
gonna say thirty forty five is an even better number. Yes,
it gives you a little bit more money, but it's
still achievable for the vast majority of people.
Speaker 2 (08:27):
So, Joe, something you and I were both really excited
about last week towards the end of the week was
the unveiling of that awesome EV or specifically an electric truck.
This is a twenty thousand dollars affordable EV and it's
not even the supposedly fantastic ones that BYD is creating
over there in China, which doesn't even really matter because
I doubt we're going to see any of those. But
(08:49):
a Jeff Bezos back startup called Slate Auto is launching
a bare bones electric truck that if the current electric
vehicle and that have remain is supposedly going to cost
less than twenty thousand dollars. And evidently they're gonna start
delivering these things next year. And holy cow, man, I'm
(09:09):
so excited. I don't think I've been excited for the
Teslas are cool. Certainly when the ribbans came out, I
was They're gorgeous. Yeah, we kind of drooling over them.
I'm just like, I don't know how I'm gonna Why
do all evs have to be luxury vehicles? And that's
the difference here, because these things are incredibly cheap. The
reason being is because they are very minimalistic. They don't
(09:31):
have stereos, they don't have power windows, which was my
favorite feature.
Speaker 1 (09:35):
The fact that they don't have power at home. I
love those little roller things. I'm totally down to roll
my windows open the school, dude.
Speaker 2 (09:42):
There's no big screen in the center of the dash.
It specifically called out manual AC and heat controls like
the old school buttons, just like we are currently rocking
in our old vans. Basically, the car is a blank slate,
so it's called slate Auto, but it's you know, it's
kind of like a blank slate. Yeah, if you want
to spice it up, you can. It's got all these
(10:02):
different accessories that you can add on. You can even
turn it into a five seater suv, which I.
Speaker 1 (10:07):
Just think it's like five grand to add that one.
Speaker 2 (10:10):
I see.
Speaker 1 (10:10):
I think it's I saw that in one article about
it because I was I was concerned, or at least interested, Well,
how much is that gonna.
Speaker 2 (10:16):
TV model is going to cost you? Thirty five? Right?
Speaker 1 (10:18):
How'd you go from twenty to thirty five? Yeah, but
apparently it's it's an extra five grand to add on.
Speaker 2 (10:22):
We can get behind that twenty five thousand for a
five seater suv even just like a little truck, a
little like I can so see Kate and I having
one of these, just the putts around town. And just
given the amount of gardening that we do, to be
able to.
Speaker 1 (10:33):
Load mulch in the back of the truck bed, to
be able to put four by eight sheets of plywood
back there.
Speaker 2 (10:37):
Man, this is I love it. And it's a smaller truck.
Speaker 1 (10:40):
When you look at the size, it's not as small
as what are they what do they call the Japanese
are they the K trucks. Yeah, cars, It's not quite
as small as that, which is good for me. I
might actually be fit in it as someone who's.
Speaker 2 (10:51):
Six with six those are comically small, whereas this is
just like reasonably small, like nineteen eighties Toyota small, which
those are like the coolest trucks anyway, like the small
tell you it is from ladies.
Speaker 1 (11:01):
This is huge groundbreaking. I think I'm so glad to
see someone launching a car finally at like the lower
end of the cost spectrum for people who and I
think there's probably more people than just us two money
nerds who are interested in this.
Speaker 2 (11:16):
Matt.
Speaker 1 (11:16):
I kind of think so, especially as car costs have
been rocketing upwards and people are like, yeah, i'd be
down to do the EV thing, but they're really expensive,
and so yeah, I think this is this is going
to reach a lot of people. You and I we
both plunk down a fifty dollars deposit to purchase one.
It's refundable not to go with it, right, And you
might be thinking, wait a second, Matt and Joel, they're
always talking smack about new cars. Who are these guys
(11:39):
who really might buy this new truck when it comes out, well,
this new car would be less than half the price
of the average new car, and it would be cheaper
than the average cost of a used car.
Speaker 2 (11:52):
So I love it.
Speaker 1 (11:54):
Not that I would spend that much anyway typically, but
like the problem with new cars is that they keep
getting bigger, they keep getting fancy, yes, power, everything becomes standard.
I just think that the market is crying out for
a bare bones creation process, and and in what that
does essentially to the pricing of those automobiles, it allows
them to price them this competitively. Uh, And that no
(12:18):
frill segment of the population has been completely ignored in
the car buying population.
Speaker 2 (12:23):
So uh.
Speaker 1 (12:24):
I really think, Matt, that this has a lot of
legs to it. I'm curious to see what one looks
like in person. I'm curious to see how.
Speaker 2 (12:31):
This launch goes.
Speaker 1 (12:32):
So cool, but I have a feeling a lot of
how to money listeners are like, Yeah, I just kind
of want something that's gonna get me around and be
a little comfortable. I don't mind if I have to
stick my own Bluetooth speaker in there to listen to
my music, because.
Speaker 2 (12:43):
Guess what I'm doing that alright, that's my recommendation for
you last year, just like, oh, it's kind of annoying
that I had. I listened to it from my phone.
Doesn't get you a Bluetooth speaker, yeh. And it's so
cool that that's literally a part of their like want
to listen to music from the ground up? Oh my gosh.
Of course, Like there are just simpler, more bare bones
ways to accomplish the things that we thought required all
the technology or all the factory settings to be just
(13:06):
the defaults. I mean, we've talked about this recently too,
Just how like when did kitchens get so nice? Yeah,
and we've I don't want to change the conversation and
switch to homes, but like, think about homes from the
eighties and the seventies and the sixties even versus kitchens.
Now may we consider normal? Is it's so long luxury
twenty years ago. That's great if you can afford it,
But man, I want to see more fews out there.
Speaker 1 (13:29):
But sometimes sure, it's like I'd rather find my money
on other things.
Speaker 2 (13:32):
So yeah, yeah, I love it, And I hope that
we are not the only ones that are going to
get excited about this. I really want to see this
little company out of Troy, Michigan takeoff too. It says
Troy because that's what it said on the credit card statement. Really,
it always like says like the name of the company
and specifically where they are.
Speaker 1 (13:47):
Yeah, yeah, I was like thrilled to put fifty bucks
down on this list. And yeah, my Rivan R two,
it might be I got.
Speaker 2 (13:54):
A whole lot less attractive, less attract I'm gonna ahead
and pull that deposit back. Yeah, we'll see. By the way,
don't forget about the cost of insurance. Always check with
your insurance company before buying a new or a used
car because you might be shocked at what it costs
to ensure, especially evs these days because of the batteries.
But Clippinger, they wrote about the cheapest cars to ensure,
(14:15):
and man, guess what the car that both of us own.
It's on the top five cheapest cars. I celebrated when
I saw that. Uh, the sup Odyssey, the subrou aut Back,
Nissan Rogue fourd Escape, Jeep Wrangler. They were the other ones.
The most expensive cars to ensure were they are the
I should say, Cadillac Escalade, Dodge Charger, Tesla Model's Challenger.
(14:38):
You said charge when I say charger, Oh, no, the Challenger.
What's the difference between the two. I don't know if
they look similarly. I think they're not like luxury cars either.
I wonder if it's because there's sports cars, yeah, but
they're not like super high end, so I wonder if
it's just because they tend to get rex. I will say,
when you're driving around and you look in the riview
and somebody's riding your tail, oftentimes it is a I
feel like it is a challenger, a hard charger. But
(14:58):
the price gap between the these models, right, So the
most expensive and the least expensive can be up to
fifteen hundred dollars a year, which is so much money,
and as insurance costs rise, as they become more of
a threat to your budget, driving used cars will typically help, sure,
but driving the right used car is going to make
a massive difference as well. Matt.
Speaker 1 (15:17):
Let's talk about parking and how much parking can cost you.
These days, airport parking prices specifically are getting really bad,
and Hartsfield Jackson in Atlanta is about to start charging
seventy five dollars a day to park at their domestic
lots and one hundred dollars a day if you park
at the super super fancy I guess international lot.
Speaker 2 (15:39):
I don't know.
Speaker 1 (15:39):
I don't know how you get super fancy with parking.
Speaker 2 (15:41):
But is it called the Lexis lot.
Speaker 1 (15:43):
That's I mean you have to have Lexus kind of
money at the airport and sponsorship, right, So this is
all in an effort to raise money to fun new
parking lots, because of course new parking lots. I hate
everything about this. When I saw this story, it made
me want to like stick my in my I'm sure
a lot of business travelers are just gonna pay this
(16:04):
because that's what business travelers often do. That's what they
do when it comes to high airfares. They just kind
of fork over the money. They're not as thoughtful about
their businesses money as their own. But even they shouldn't
do this because when you look at the numbers, booking
at an off airport lot costs a fraction of the price.
I'm talking sub ten dollars a day, and it's even
(16:25):
cheaper if you book ahead. Right, So if you if
you sign up for the dates you want at an
off airport lot, you're gonna you're gonna pay as low
as like six to seven dollars a day, which is insane,
a far cry from one hundred dollars a day. And
they're even and I know this is a blaster on
the past map. You can get pretty good deals for
airport parking on Groupon. So I don't really ever use
(16:47):
group on anymore, but I have for airport parking because
it saves you even more you take it away back.
Speaker 2 (16:52):
Yeah.
Speaker 1 (16:52):
Remember I still remember when Google tried to buy Groupon
for like eight billion dollars or something, and group on
was like, now we're good.
Speaker 2 (17:00):
Remember they're probably worth a fraction of that. But I
remember scout Mob that was though. Yeah, that was like
the hips. Group on that was cool, like the mustache.
I don't even know if it was just no, don't
I don't think it does.
Speaker 1 (17:09):
So just be thoughtful when you're traveling and parking those
airport lots. Off airport lots, they're actually actually pretty convenient
with parking and then the shuttling you to the airport,
it's it's pretty easy. It's not like it's a massive
inconvenience and how much money you're gonna save is insane.
And then one other thing, Uber is offering van pools
at more airports these days. They just announced a new
(17:31):
van pool at the Atlanta Airport ten dollars to get
from like mid down Midtown down to the airport with
your luggage, which seems pretty reasonable to me.
Speaker 2 (17:39):
I agree, Joel. We got more to get to. We're
gonna talk about why everything costs more than you think,
plus other personal fundance stories. We'll get to all of
that right after this quick break. All right, we're back
that now is time for the ludicrous.
Speaker 1 (17:58):
Headline of this one comes from CNBC and it reads,
more Americans or financing groceries with buy now, Pay Later loans,
and more are paying those bills late, survey.
Speaker 2 (18:10):
Says oh Man.
Speaker 1 (18:13):
I hate to talk about buy Now, Pay Later again
because I think this is something that we like talk
back about pretty regularly. But there just aren't many headlines
that could break my heart more than this. The fact
that the survey found twenty five percent of buy Now
Pay Later users are using installment loans to pay for
groceries these days, like in essential a need, and more
(18:34):
than four and ten have paid late on one of
these loans in the past year. I feel like by
Now Pay Later, it's it's like a virus. That's spreading
and more and more people.
Speaker 2 (18:45):
It's like snuck into the under the guys of Oh,
this is going to make life easier.
Speaker 1 (18:50):
That's right, that's right, yeah, which sounds nice. Like anytime
someone's like, I'm going to make your life easier, it's
like why not cool? That sounds great, but it's actually
what do they say, like, when you do the easy thing, well,
you're gonna pay, You're gonna have to do the hard
thing later or versus like doing the hard thing up
front and then your life gets a little bit easier
down the road.
Speaker 2 (19:08):
And I think I think that should be like a
quick synopsis of what how to money is all about. Like, yeah,
over the hard thing first, that's like the philosophical approach
to how we do things here out how to money. Yeah,
And if you take the easy approach to paying for stuff,
which by now pay later is the quintessential reality of that,
then you're going to have a hard time later. And
it's the youngest and most vulnerable among us who seem
(19:28):
to be taking the bait the method. Really, it seems
seems reasonable on the surface. Sure, I'll pay for this
in for installments, and I'm not going to be charged
any interest. But it's a slippery slope because a quarter
of buy now pay later buyers take on a bunch
of these loans at once. And the truth is, we
buy more when the friction is reduced, and now when
you're unorganized as to what you got going on out
(19:49):
of your accounts as well. I think that's a part
of it that's right, And.
Speaker 1 (19:52):
So it feels like you have to do this in
order to be able to afford the things that you want,
and you're buying more than you actually need because of it,
and then when it gets into groceries, I feel like
it we've completely.
Speaker 2 (20:02):
Lost the plot. I find it interesting as well that
more than sixty percent of binolpay later users think that
on time payments is that that is going to help
boost their credit score, which might be true in the future,
but it isn't right now, at least for the majority
of the different binil pay later companies out there. It
is true with like a firm Apple pay Later, they
report as well, but there.
Speaker 1 (20:22):
Are they haven't started putting it into the credit scoring model,
and there are a.
Speaker 2 (20:25):
Whole lot of companies that aren't reporting at all. And
so it turns out most folks don't understand how these
payment plans work much less than the behavioral impact that
they have on their finances. In our advice is to
stay away and like, there's a lot of new companies
and anytime there's a new it's like the wild wild
West when it comes to payment options. And it makes
sense too that younger users are jumping on this because
(20:46):
they're more willing to experiment and try new things. But
new cool fintech, Yeah, I'll try. Why not? But as
we have more and more options before us, as our
attention is more fragmented, that leads to confusion, and it
leads to a lot of folks feeling overwhelmed and not
feeling that they have their arms wrapped around, in this case,
their finances. Yeah. Another constant reason though for higher food costs,
(21:08):
at least on our sort of monthly budgets, is the
never changing reality of wasting food families, Joel, they throw
away a third of what it is that they purchase,
which is slightly better than I thought it was a half,
So like literally I thought it was like I think
it's somewhere it was close to a half of thirty
five ish to forty percent, So depending on who you ask.
(21:28):
I actually I almost saw this as like an improvement
based on maybe where things were I don't know, at
the height of individual spending and the amount of cash
that folks surplus, cash that folks had in their household.
Speaker 1 (21:39):
I've never account I've never known a human to love
leftovers more than you do. So I know that this
disappoints you more than anything else. Obviously, it's a great
idea to eat out less. It's a good idea to
pivot to store brands and specifically to shop at ALDI.
But dude, if you're not cooking and actually eating the
food that you buy before it spoils and goes bad,
and not eating your leftovers, obviously you're gonna pay far
(22:01):
more for your food than you should. So similar to
talking about the different payment options, I think a lot
of it has to come A lot of it comes
down to the fact that we have so many different
food options, yes, available to us as well.
Speaker 2 (22:11):
Not just oh which buy now, pay later? Which payment
terms am I gonna opt for when it comes to
affording these groceries, But then when it comes to the
actual food that we are purchasing, like it's so silly
to go to the more mainstream or higher end grocery stores,
and you've got all the options before you, as opposed
to going to all the and your options are limited.
And it makes it so that when you come back
(22:33):
and you put all the things in your fridge, I
think you are more likely to use some of those
ingredients as opposed to overbuying over purchasing, because it's so
easy too, because of buy now, pay later. And then
you take all these groceries, you shove them in your
fridge and you can't see half the stuff because everything's
stacked on top of everything. That's why. That's why everyone's
got the little tub of salad at the back of
(22:53):
the fridge that's turned to mush. Yeah that you're like,
oh man, we're gonna have to toss this, or you're like,
what's that smell? And then you realize, oh, it's that
there's a lemon down there at the bottom of the
produce beIN that's turned blue. It's got the blue fuzz
on it, and they turn blue. Yeah, I guess, yeah,
But what happens is you most people are just like,
oh gross, and then they just grab the whole bag
of lemons or oranges and then they end up tossing
(23:14):
it into the trash.
Speaker 1 (23:15):
I think BNPL hate it. It's basically the wrong answer
to the right question. The right question is like, man,
my food budget, it's punching me in the face. How
do I fix this? And BNPL is positioning itself to
be like, look at us, we're over here, we'll help
you out. And yet the right answer involves going in
the opposite direction, which is to consider what you buy,
(23:37):
what you bring in, how much you're spending on groceries,
and then using what you have bought. Because that it
feels so old school. It feels so old school. But man,
old school works so much of the time. Still, you
don't need the new fangle BNPL with the flashy marketing
and stuff like that and what seems like it's going
to work out better. Ultimately, it's going to lead to
not knowing where your money is going and spending more
(24:00):
money than you're just going to lead.
Speaker 2 (24:01):
To constrained budgets. Have you heard of this thing called
a food waste audit before? Oh? I think I heard
of it, so okay, I've never I've literally never heard
of this, and came across this link to it in
the show notes. But basically, man, I love this so much.
You take a sheet of paper, you set it over
near the trash can, and every time so you just
pick like a normal week, every time you take something
out of the fridge or I guess out of the
(24:22):
pantry as well, and if it's bad or stale, and
you toss it in the trash, force yourself to write
down the item and estimate the cost. And then not
the end of the week, you tally up how much
money you are waste. Multiply by four. Maybe you've got
a monthly a monthly understanding of how much you're wasting
every single month. Mull that hey rule of one seventy three.
(24:42):
Take that monthly amount, you multiply about hundred and seventy three.
Now now we're really talking. We're taking it to the
next level, because that is, were you to not waste
that money and instead invest it in the market, that's
how much you would have on hand at the end
of ten years. So you're thrown away real money, not
just pennies. It's it's like literally taking almost literally I
should say, taking money and just putting it right in
the trash.
Speaker 1 (25:02):
I mean, I hate that. There's a step in between.
But that is what you're doing. All right, man, Let's
talk tariffs for a second. And you know, I know
you and I we've we've talked about it a lot,
hoping not to have to talk about it forever into
the future. But Amazon announced earlier this week that it's
going to it was going to display the cost of
tariffs next to certain goods for sale on the site.
(25:23):
I think it was going to be kind of in
their Amazon Hall section, which was there. It's not kind
of their competitor to Shean and Timu. But then what
they wanted to highlight was essentially the Trump impact of
higher prices that these tariffs were going to cause. And
then Jeff Bezos took a call from Donald Trump. It
appears that's no longer happening. And they were also like, actually,
it was never happening, even though there were reports that
(25:46):
it was happening. It was in the works. We changed
our mind, right, And the Wall Street Journal said, actually,
the public, I'll quote here, the public could have used
Amazon's price transparency. Tariffs are taxes and tellful to know
how policy choices affect final prices. That's right, and I agree.
I think that transparency from Amazon would have been helpful,
and I think it probably would have helped to sour
(26:07):
some consumers about tariffs because they would have been like,
wait a second, I heard all this stuff talk about tariffs,
but how much is it actually costing me? And they'd
find out with that as broken out essentially in the pricing.
We're gonna find out even if it's not broken out though.
But most companies, they don't like tariffs and they want
to show their customers, at least some of them, the
exact impact that they have on the bottom line. I
(26:28):
think we're going to see more and more of that,
and you can't blame them. On top of this, Matt
cheap Chinese goods, they're cheap no longer. Those two companies
I mentioned earlier, Timushi, in which again I've never purchased
anything from either of those sites. Apparently their prices are
going up, doubling the costs of many of the items
they sell.
Speaker 2 (26:46):
One more thing on the tariff specifically, so that was
because the Dominimus loophole, which literally expires today may second.
So it's not to say that Chinese goods you can
still buy cheap Chinese stuff online, you just can't buy
it directly from China where they're shipping it straight from
the factories where they're avoiding all the important duties and
whatever it.
Speaker 1 (27:06):
Is, because that price has got to go up, right,
So on top of that, shipping volumes to US ports
are plumbing. And even with some of the larger tariff delays,
the reality of tariffs, it's it's really only we're only
at the very infancy starting to begin to feel the impact.
So I do think we're going to see higher prices,
fewer options if this the way tariffs are currently constructed
(27:28):
remain or or if potentially they get worse.
Speaker 2 (27:30):
Yeah, and don't forget about the secondary costs of everything
that we buy as well. That's something else that we
often failed to take into account. Right, So let's say
you want to buy a TV. Obviously it requires electricity,
and then so right there you see the yellow sticker
on there when you buy it, predicting how much it's
going to cost you to watch your favorite shows every
single year. Well, there's a Wall Street journal tech writer
who highlighted a trend that we've all been subject to
(27:53):
more recurring subscriptions. So instead of paying for that new
gadget straight up getting to use it as you please.
You might pay a reduced price. It's like a hidden
price whatever, right, or a false price, maybe, I should say,
and then you pay an annual fee to unlock his
full potential. We talked about at some point. I think
it was last year that we talked about the heated
seats that aren't digitally unlocked unless you pay the subscription. Yeah,
(28:17):
or maybe it was a heated steering wheel as well.
Super annoyed. That was BMW Right, BMW What I said?
Speaker 1 (28:23):
Where Hey, yeah, no, this comes with TVID seats, but
you got to pay to access them exactly.
Speaker 2 (28:27):
Luxury brands terrists though, could cause an influx of subscriptions
in order to keep the initial price low. Because folks
are used to paying a certain amount, it's going to
feel painful to pay more upfront. So essentially, how can
we sneak these higher costs in the back door?
Speaker 1 (28:41):
I could could Apple find a way to make the
price of the iPhone.
Speaker 2 (28:44):
I guarantee you're thinking about it half as.
Speaker 1 (28:46):
Much or something, in order to in order to reduce
what they pay in tariffs and create like a subscription
model where you pay them monthly instead. It's all about
the subscription man. Yeah, yeah, yeah, because you don't pay
tariffs on subscriptions.
Speaker 2 (28:59):
Keep that in mind. Keep in mind the additional cost
before you click something to buy it, think about the
secondary costs.
Speaker 1 (29:05):
Just one basic thing that like, some of my friends
have the Whoop fitness bands, right, you and I we've
got the garment watches. Yeah, and it wasn't just because
the initial cost was lower, although it was, but the
Whoop band comes with the monthly subscription fee to access
the data that you're racking.
Speaker 2 (29:21):
It and a lot of folks are pay for it
for a year and us in order to get the
best deal, right, I don't even know how much it costs,
but I don't know whether it's but I know that
I pay zero dollars tax us all the data from
the running that I'm doing, So yeah, that factors in, right, Hey,
how much?
Speaker 1 (29:34):
What's not just like what's the initial cost? What's the
outlay right now? But think about what are the costs
down the road that I'm going to occur by buying
this thing? It really matters, Like, and I think the
more we can think about the things we buy in
that way, we're probably it's going to at least like
force our hand to think about our purchases differently, and
we might find ourselves buying less or at least pivoting
to buy other items that are going to have lower
(29:58):
secondary costs.
Speaker 2 (29:59):
That's true. Another way to help us decide what to
buy when not to buy in an era of rising
prices is to consider prices in terms of time. So
basically CPI. It's not a great metric because let's say
we were talking about TV's earlier, the TV you bought
back in the eighties, it does not compare to the
one that you can buy today. It's much better now
and it costs a whole lot less. And superabundance is
(30:22):
about how much richer we've become things to global competition
for the good book trade. Yeah, the reality that it
just takes us less time working in order to earn
incomes to pay for basics like food and energy, which
is a good thing. This is something that we love.
It shows that we can afford more of everything now.
This is like the heart of progress. But it makes
(30:42):
me think that we should all figure out our hourly rate.
And this is another topic we discussed way back in
the day is episode ninety nine, and I think going
through that exercise. It can create this subtle mental shift
because the next time you're thinking about buying something, I
think you might be more keen to think about how
long you would have to work in order to afford
that item, which could be a better way of thinking
(31:04):
about it. You know, I think that one reframe could
prevent some ill advised purchases and just to cause you
to say again, second guess, Reframe things put it in
a different light to where you're not just thinking about
how it's going to make you feel in the moment,
but what you're thinking about is what about future me
or what are the alternatives, or how much is this
actually going to cost me a little bit further down
the road, not just what I have to pay upfront
(31:26):
right now?
Speaker 1 (31:27):
The one hundred and eighty bucks feels really different than
saying that's gonna take me six hours of work, and
especially if you don't like your job.
Speaker 2 (31:34):
Yeah, that will hopefully make you think.
Speaker 1 (31:36):
Twice about whether or not you really want to buy
the thing, because if it means you got to, you
gotta go, you know, put in some additional hours in
order to and you don't always have to put in
additional hours, but you're reframing it in terms of thinking
about how much of my time is involved in getting
this item, And I just think that's a better way
to think about it. And that also is going to
make you less likely to buy things you don't need. Well,
(31:58):
at least it'll take you fewer hours of work to
buy that next plane ticket. Now, we just had Scott
Kay's our buddy on to talk about cheap travel, who
knows more about that than he does. But as he predicted,
right when the economy softens, travel is an easy item
to reduce spending on, Like you're like, hey, I don't
have as much money rolling in, or prices are higher.
(32:20):
That's just one of the first places where people naturally say,
I guess I'm not going to buy that plane ticket
and go to Connecticut instead, I'll just drive right or
I'm not going.
Speaker 2 (32:28):
To take the trip this year, or we're staying home.
Speaker 1 (32:30):
Yes, And so as demand for travel softens, the deals
get better, and we're in the midst of this time
where deals are getting better. The cost of airfare is
actually lower than it was, not just like last year
or two years ago, but it's lower than it was
fifteen years ago. So that's like a silver lining to
all the inflation we've seen recently. It's like, well, there
(32:52):
are certain parts of the market, certain segments that we're
not experiencing that, and airfare is a specific one.
Speaker 2 (32:57):
Good for travelers, not good for line stockholders, for that
is for sure.
Speaker 1 (33:02):
Because all the major airlines they're they're kind of worried
about demand in the coming months. They're they're pulling financial
outlooks that they typically offer. Business travel is seeing a
real demand pull back to, which is one of those
things that they could typically count on. Even if consumers
like you and me pull back on a vacation, they're like, well,
business traveler and they're still going to be at it. Well,
sorry Delta and United, but congrats to everybody who's listening
(33:25):
who's like a deal hungry traveler with money to spare.
Now is a better time. I literally just booked some
plane tickets last.
Speaker 2 (33:31):
Night and where are you going.
Speaker 1 (33:33):
Well, this is a family trip or taking in Hawaii
this summer, so I'm very excited.
Speaker 2 (33:36):
Oh you uh put the final leg finally pulled the trigger.
Speaker 1 (33:40):
Yes, us some miles on some of some of the
plane tickets and used cash on the rest.
Speaker 2 (33:45):
So nice, I know, you're getting nervous because you've got
a really good deal on one leg and you're just
still camped out waiting, trying to nice. Glad you got
a good deal.
Speaker 1 (33:52):
So I hope everyone else out there takes advantage of this, like, hey,
when when prices on airfare sinking and when these the
UH airline are offering more deals out there, if you've
got the spare cash to take advantage, it might be
a better time to.
Speaker 2 (34:05):
Take that trip. Very nice. Well that's gonna be it
for this episode of your favorite podcast, How to Money.
We hope everyone has a fantastic weekend. We'll see you
back here on Monday. Thought we were their fourth favorite
podcast podcast and until next time. It's really nice of them.
Best friends out, best friends Out.
Hosts And Creators
Joel Larsgaard
Matthew Altmix
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!