November 3, 2023 • 35 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: higher 401k and IRA contribution limits, the eternal war against consumption, financially fasting, pumping the brakes on credit limit increases, top tier gas, when to splurge for ethanol free gas, airfare hacks leading you astray, higher credit scores and higher levels of debt, credit freeze failures, realtor fees revolution, legacy banks making bank, & bad news for budgeters.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Hod of Money. I'm Joel, I'm Matt, and
today we're talking top tier gas, credit freeze failure and
bad news for budgeters. You got pretty excited talking about
(00:30):
top tier gas due.
Speaker 2 (00:32):
I felt the energy coursing shooting across the table. Our
listeners felt that energy coursing through their earbuds.
Speaker 1 (00:39):
It's top tier gas, man, it's probably funny. Probably people
probably don't know that's actually a designation of a type
of gasoline.
Speaker 2 (00:46):
It's trademarked, and it's.
Speaker 1 (00:48):
Important for you to know about. It's something I don't
know if we've ever really talked about on the show.
Speaker 2 (00:50):
We have, Actually, I feels like that's the kind of
topic that my dad's going to be really too. So
I think it's been a minute since he's listened, but
he's going to be excited that we are talking about
us on its Boomers, our main audience, by the way,
I think it's just this came out.
Speaker 1 (01:04):
They actually are a good part of our real lidy. Well, yeah,
we love you.
Speaker 2 (01:07):
I love boomers. I wasn't going to acknowledge your joke.
You're staying there. I know you're saying. I wanted to
mention we've touched on this in previous months, but I
guess the IRS officially announced that the maximum contribubutions that
you can make to a roth ira or not a
roth just to an ira generally speaking to a four
to one K, that they officially increase those limits as
(01:27):
of I think a couple of days ago, five hundred
bucks each. Yeah. Yeah, so iras are up to seven
thousand dollars now four one ks are up to twenty
three thousand dollars. Start starting next year, Yeah, starting in January.
We talked about this though back in August, and I
don't know. I remember we came across a legit source
and I don't know if we found somewhere on the
iris's website where that infrom, where there's a leak or
(01:50):
something like that, But I know one percent that we
told folks, hey, seven thousand dollars, start preparing for that
next year.
Speaker 1 (01:56):
It's so funny because the press release literally came out
in November first, but you and I I remember us
talking about it, and I remember us seeing it somewhere
where in the world do we get I don't know.
I think maybe she get slipped through and you've got
contacts ors and the IRS or hot on the trail.
Maybe you got a personal personal DM from the guy
who's the head of the IRS.
Speaker 2 (02:12):
Well, I don't think we talked about four one k's.
I know we talked about iras being seven thousand because
I like those those nice even numbers. Yeah, that's it.
I think that's what we're having the same conversation, because
I think I remember talking.
Speaker 1 (02:22):
About if I had mind brothers, I would I would
have them up at to seventy two hundred dollars because
that makes it there, you go even by twelve exactly.
Why would you not make it nice and easy for folks. Yeah,
but obviously the IRS does not care.
Speaker 2 (02:35):
About marketing or behave the behavioral side of economics. They're
only looking at They should hire us to advise them
bring old numbers. But I don't want to work for
the IRS.
Speaker 1 (02:44):
No.
Speaker 2 (02:44):
Yeah, I like working for you, but I think I
think you like working for me.
Speaker 1 (02:48):
Yeah, it's good, it's a good symbiotic relationship. Well, it's
I think it's just good to note and obviously not
like tons of folks out there able to max both.
But if you can max both, that's thirty grand a
year going into the retirement accounts.
Speaker 2 (03:00):
I love it.
Speaker 1 (03:01):
And so even if you can't now, maybe the goals
to max out the roth Ira seven grand next year
and get the match at least in your in your
four one k. And then the next goal is I
keep adding more into the four one k. Maybe one
of these days, maybe a few years from now, you
can max both of them out. That'd be awesome. Ye.
Speaker 2 (03:16):
Let that be your goal.
Speaker 1 (03:17):
Yeah, let's get on, move on, Let's get to the
Friday flight. The sampling of stories we found interesting, more
great stories, Yeah, more helpful advice. Let's talk about consumption
to start with. There's a lot of interesting stories, by
the way that we got to talk about today. But
there was this article in The Atlantic this week. It
was called the Junk is Winning And the writer of
this article she's she's not wrong, Matt, Like we live
(03:39):
in an era where we're being sold stuff all the time.
Like every time we go online, every click of the mouse,
every swipe of the finger, it feels like someone is
trying to get inside of our wallets. And we're even
referred to as consumers. You know, we try to avoid
that language, although it does get used sometimes on the show.
But that's largely because the economy runs on our ever
presentability and desire to consume more and more. Right, And
(04:02):
so this writer specifically referenced the fact that you can
now buy crap, and I use that term intentionally. You
can truly buy crap on TikTok, real dookie, like fake fake,
you can like honestly, just the kinds of things being
sold on there are not long lasting, treasured heirlooms I'm
trying to get at. And we talked about the fact
(04:22):
that you can buy stuff on TikTok recently, how that's
turning into kind of a consumer site. I'll instagram, Well,
the TikTok shop.
Speaker 2 (04:30):
They're taking it to a whole nother, whole other level
than just an ad where oh, by the way, you
can go ahead and click this and takes you to
an external site. Yeah.
Speaker 1 (04:37):
And then there are other sites that aren't necessarily social
media related, like Chinese sites in particular, like wish and Tamu,
and they've taken the race to the bottom to another level.
We don't talk about those that much because again, it's
mostly cheap crap. And so she actually ends the article
by saying that, and I quote a lot of the
things that can be made to seem glamorous or ingenious
(04:58):
in a two minute video would be better off delivered
directly to goodwill, to which you will inevitably donate them.
At least you'd save yourself a future in Aaron in
the future, Right. That's incredibly true, and I think she's
spot on. It's like, there's a way that social media
and that advertising and marketing glamorizes things, and that seven
dollars jacket or two dollars fifty cent t shirt or
(05:19):
something like that, or the fake Pooh whatever it is,
it just sounds it seems so fun and goofy and like,
oh yeah, but why not, I'll click to purchase. But
I think just remember that next time you're tempted to
purchase something on a whim.
Speaker 2 (05:32):
Yeah, it makes it seem glamorous. It simultaneously makes it
seem more personal, because that's the inherent nature of social media.
You've got people who you follow, and because you follow them,
it feels like you know them. And it truly makes
me think back to like back in the eighties and
back in the nineties, QVC, the home shopping network. It
was a massive industry and folks were getting pulled and
(05:52):
sucked into the same sort of behavior, and we can
look back now and kind of laugh at it. It seems
it seems silly. And now when you are you know,
you get something that's recommended to you by an influencer,
it feels more personal. It's like you've got a friend
who's saying, hey, this is something you need, a friend
with insider knowledge. You didn't realize this, but I know
you and they don't know you. A b you need this,
(06:15):
by the way, you don't need that. And I'm curious
how long it's going to take before we look back
at this sort of era that we're in currently and
we laugh at it in the same way that we
look back to the home shopping network and just the
useless stuff that folks were buying back then that they're
also doing now, Because in reality, it truly is exactly
it's the exact same model. It's just following just the
new version. It's the new version. It's following the same
(06:37):
path that media has taken, just the atomization where it
feels like you are going directly to an individual as
opposed to everybody logging onto the watching the same network.
Speaker 1 (06:47):
And the problem is, though it's like they're these tentacles,
like and because of who we follow and the things
we watch and how we scroll, they've got their hooks
in us. And it's really cookies specifically, right, Yeah, it's.
Speaker 2 (07:00):
What they've got it.
Speaker 1 (07:00):
It's hard to resist. Yeah, but I think we have
to think about the last ten things you bought, maybe
even go actually look at your Amazon purchase history or whatever,
maybe the thing you actually did buy on TikTok shop,
look at the things in the past and be like,
do I actually use that? Is it that I get
my money's worth? Was it valuable for me? And I
think maybe looking back at those prior purchases can help
inform future purchases and can give us maybe like take
(07:21):
off the rose color classes and help us see through
a clear class pain, like through reality. How much it
helps her hurts totally.
Speaker 2 (07:28):
Yeah. So this makes me think of another article we
came across this week in Kiplinger about financial fasting, and
I'm not sure if now is actually the perfect time
for those given the up upcoming holiday season, given the
likelihood and almost everyone out there listening is going to
buy at least something for a family member, for a friend,
but even still, I think it's a good idea to
start planning one of these, one of these financial fasts,
(07:51):
perhaps for the new year, maybe come January, because we've
gotten so used to shopping when we are bored, right,
it's just the default reaction. We whip out the phone,
you start scrolling. You know that. I think a lot
of us have developed a reflexive habit when it comes
to purchasing stuff. And so I think a financial fast,
just a period of time where you are refusing to
(08:12):
spend eighty dollars at all, even if it's just for
a couple of days, I think that can start to
unwind that cycle. I think it can help to detach
you from that consumeristic impulse. As I was saying detaching,
I was picturing Neo detaching from the from the matrix.
I mean, it feels like it's a lot like that.
It's almost that radical of a move, yes, And I
think this can help you to know figure out how
(08:33):
to spend much more mindfully while simultaneously allowing you to
make bigger progress on some of the other money goals
that you might have, like like paying down debt or
actually achieving something big, something something noteworthy as opposed to
something like you said, or like the writer said that
she's just gonna end up donating directly to goodwill.
Speaker 1 (08:51):
So I know it's not like January first, but maybe
now is a good time to put a few dates
on the calendar and talk to your spouse or your
best friend or something and say, hey, listen, what about
that second week in January, the first speak in Jenu
or whatever it is, or maybe the first two weeks
in January. Can we put those on the calendar. Commit
to doing something like this, because I think it can,
like you said, help kind of rewire our brains in
a certain way. And Matt, a couple of years ago,
you know, we did we had a couple of money
(09:12):
challenges that we that we put forth to people. Maybe
we should reinstitute that at the beginning of twenty twenty
four as well, give people another kind of how to
money push to all do these things where like the
sell your Stuff challenge and the max your Wroth challenge
and stuff like that, and we'll gain Maybe we'll put
it out there in the newsletter or something like that
and offer all those forms up again obviously free of charge,
just to kind of help you have a schedule to
(09:34):
keep to and a challenge to put yourself up against,
because I think that can be really powerful too when
it comes to actually getting the job done.
Speaker 2 (09:41):
Totally. Yeah, okay, So we've talked about credit limits before,
and of course, when you have a low amount of
credit that's available to you, that can negatively impact your
credit score because if you use that credit card too much, right,
if you are getting close to that limit each month,
it's going to cause your credit utilization to go up,
which is going to harm that all important three credit score.
So we've talked about how you can call your credit
(10:03):
card company. You can simply ask them for an increase
on that limit. Oftentimes they'll say yeah, of course, and
it'll help you to improve your score. But there's also
the downside to higher credit limits. Not surprisingly, banks are
realizing that if they up individual's limits that they're gonna
go ahead and they're gonna spend, They're gonna consume more,
(10:23):
they're gonna put more on their credit cards, and they'll
often not pay off that balance on time and in full,
which is one of our golden rules. We've actually got
an article about the Golden rules to using credit cards
that will link to in our show notes. And so
the reason we wanted to bring this up is because
the flyers that you get in the mail, where there
are banks saying, hey, you've been a great customer, you've
(10:45):
utilized this card, what about this card, And in the
back of your mind, you're on one shoulder you have
Matt and Joel saying, yeah, that'll increase your credit, that'll
decrease your credit utilization rate, because you'll have more credit
available to you. But just because that's being offered to
you doesn't necessarily mean that that's something that you should
pounce on. Even receiving an email, just a notice from
your credit card company, if they're saying, hey, you've been
(11:06):
a valued customer, how about we up that from twelve
thousand to fifteen thousand to sixteen thousand, you might be
tempted into thinking, oh, yeah, this is a one way
ticket to eight hundred and fifty land or whatever credit
score you're trying to attain to. But you can also
be tempted down a path of spending. And like we're
talking about, we're surrounded by companies who want to part
(11:29):
us from our dollars. As they're trying to, you know,
hawk their wares.
Speaker 1 (11:31):
Yeah, so it is a double edge ord more than
I even realized because I didn't I didn't necessarily assume
that people saw that as a green light to spend more.
But it turns out people do, and it shouldn't be.
It really is. The only reason for like a high
credit limit on your on your credit card is in
my mind, to help boost that utilization ratio to give
you a higher credit score. But a lot of people
(11:54):
see that as like a challenge to see to ride
to the occasion, to see if they can spend up
to that full amount or something.
Speaker 2 (11:59):
It sounds like, oh, looks like I'm a boller now,
which you got to start spending like a boller, right.
Speaker 1 (12:03):
Which makes sense, I guess in America, given how we
handle money as a culture. But it's terrible. It's terrible,
and we want how to money listeners to take advantage
of a higher limit, but don't let that ruin your
discipline or do anything actually to your spending. You're still
budgeting like normal, and you're still paying off that balance
on time and to fall at the end of every month.
And we actually have more to get to on credit.
(12:24):
In particular, something nefarious that TransUnion is done. We'll talk
about that in just a bit. All right, Well, let's
talk about top tier gas. There was an article on Yahoo,
which apparently still exists, and they wrote specifically about this
concept of top tier gas, and I was like, I
know about top tier gas, but how come we've never
talked about it on the show board before? We really
need to. And top tier gas is essentially a superior
(12:45):
version of gas that you can put in your car
and it's better for your engine. There was a triple
A study and it found that top tier gas keeps
your engine nineteen times cleaner than putting in alternate gas.
Speaker 2 (12:56):
Which nineteen x. It's basically not nineteen percent, right, cleaner,
eighteen times cleaner. So it's so much better. It's because
they put certain detergents in the fuel that makes it
better for your engine.
Speaker 1 (13:07):
So, but here's the thing. Not every gas station sells it.
For instance, Costco does, but Sam's Club doesn't, QT does,
but BUCkies does not. So if you're a Bucket fanatic,
well maybe go just for the just for the candy
and the Soto fountain on a barbecue, the barbecue, Yes.
Speaker 2 (13:22):
For the barbecue. Bikinis gotta love them, BUCkies bikinis. Are
you getting one for what we say joked about us
getting our wives.
Speaker 1 (13:30):
Yeah, those last year before our summer beech strip if
they're if they're go on sale or something that would
make a good white elephant gift. Okay, but you really
don't want to pay more for top tier gas. You
don't need to. When you look at the numbers, top
tier gas costs on average three cents more gallon, so
it's it's a negligible price difference. But actually, when you're
talking about it being sold at Costco, it's Costco gas
(13:50):
is cheaper than basically anywhere else out there.
Speaker 2 (13:52):
Sound there.
Speaker 1 (13:53):
And the thing is buying top tier gasoline could save
you a meaningful amount of wear and tear on those
engine components, which means it's frugal, not not cheap, to
buy the top tier gas. And there's a website, top
tiergas dot com. We'll link to that in the show notes,
where you can look to see which gas stations sell
this better version of gas. In my mind, is just
(14:13):
another reason to be a Costco member. Phill up there
if it's convenient, but at minimum look to see. Okay,
if it's a deciding factor between a few different gas
stations in your area where you do the bulk of
your filling up. If one sells top tier gas and
one doesn't, that's where you want to go.
Speaker 2 (14:26):
Yeah, Or you can just scuirt a little bit of
a dishwashing detergent in your next time you're filling it.
Speaker 1 (14:30):
Don't think that's how it works.
Speaker 2 (14:31):
I think that'll help it to stay clean as well.
Speaker 1 (14:33):
It's going to lead to some one star reviews, I think, Matt.
Speaker 2 (14:36):
By the way, this is different. It's funny we're talking
about gas. I recently discovered that how important ethanol free gases,
specifically when it comes to small engines, like if you've
got a generator or a motor that you rarely use,
even like a boat, because so ethanol it's derived from corn,
but it is an alcohol, and it's corrosive to like
(14:59):
a small engine part arts and so oftentimes that is
what will cause small engines to fail. It's the fact
that it's sat there over time, and that that gasoline
that has and almost all gas has ethanol in it,
just a small amount, and it's totally fine for like
our modern engines. Evidently I'm not like a pro on this,
but if you are looking at something like you said,
a lawn mower, or in my case, it was a generator.
(15:20):
And that's when I learned that, Oh, from now on,
I need to I need to make sure I am
putting ethanol free gas. And there's a website actually that
will link to as well that where you can punch
that in and find gas stations locally that sell that way.
Here's a website for everything, for everything, can you believe it? So, yeah,
we're talking about gas prices. Maybe we're kind of talking
about travel here a little bit. So let's segue to
plane ticket pricing for a minute, because new research sheds
(15:44):
some light on a lot of the so called hacks
that have been touted to help us to save when
it comes to flights. When it comes to airfare, some
actually work, but many of them don't. So for instance,
buying on a Tuesday, that's been one recommend recomm maybe
that you've seen floating around the internet that's lingered or
(16:04):
using incognito mode in order to fool the algorithm, because
sometimes folks were thinking, well, if I visit it and
I searched the flights, the next time I come back
to actually book it, it's gonna no, I'm back, and
they're gonna charge me more.
Speaker 1 (16:16):
Pumping up by twenty bucks.
Speaker 2 (16:17):
Evidently these have no real impact. This is according to
the folks over at the has Business School that's at
cal Berkeley. So our advice use just something basic like
Google Flights. There are plenty of different flight comparison sites,
but Google Flights is amazing. Make sure that you check
out Southwest dot com. Make sure that you're getting their
fare alerts.
Speaker 1 (16:35):
Because again Southwest fairs do not get input in Google Flights.
So if you want to actually look at the whole
broad market of airfares and Southwest being one of the
best discount airlines, you want to Google flights and Southwest well.
Speaker 2 (16:46):
And if you know you've got a bunch of travel
coming up as well, make sure that you are looking
at the companion pass. That's not something we've talked about recently,
but that gives you unlimited flights for a companion to
come along with you. Right, it's so much better than,
for instance, the Delta companion pass, where it's good for
a single flight unlimited flights for the rest of that
year and all of the next year. Yeah, but then
(17:07):
more than anything else too. Just being a bit more
flexible when it comes to your travel, which is of
course going to be difficult, say for a family with kids,
and oftentimes you're tied to that school calendar. If you're
going to take a flight, if you're flying somewhere over Thanksgiving,
well it's hard to be flexible on your dates. Yeah,
But when it comes to other travel zig while other
(17:27):
people are zagging essentially right like you can, you still
have options available to you. So if you're looking at
summer travel, look at the very beginning of that. Essentially,
look at the shoulder season, look at the very beginning,
look at the very end, as opposed booking something smack
dab right in the middle of summer over July fourth,
when everybody wants to go see their family.
Speaker 1 (17:45):
Yeah, yeah, I know, And we're usually kind of we
prefer airline agnostic travel cards. So if you're looking to
get points or something to use for some of those trips,
the Capitol One venture X and the Chase Safire preferred
or two of the best, the only exception being if
Southwest is in your market, the Southwest card because of
the easier redemption of those points and because of the
(18:06):
potential to get that companion pass, Matt. That elevates that
above the other airline card shoulders above the regificantly right. So,
and if you're curious about how to get the best
travel card for you, we can go to our website
how tomoney dot com. There is the credit card tool.
Just click on that in the upper right hand corner.
It makes it's like an easy way to filter and
find the best credit card for you. But we've got
more to get to on this episode, of course, Matt.
(18:27):
We got to talk about a recent ruling and how
that could impact and upset the apple cart in the
real estate industry in a good way, in a good
way for consumers, a bad way for realtors. We'll talk
about that and more right after this.
Speaker 2 (18:47):
We are back from the break, this time now for
our ludicrous headline of the week. This was from CNBC
and the headline reads, credit scores hit an all time
high even though households are falling deeper into debt. And
we talked about credit limits just before the break, But
this is just another sign of how backwards the credit
scoring industry truly is. It's difficult to imagine this. It's
(19:10):
hard to fathom how credit scores are rising that report
show that the average score is now seven hundred and eighteen.
It's by a lot of points, which is great over
the past ten years ago. News. This should be the
three digit number that reflects how people are doing, how
folks are handling their finances, yet their debt loads are
going up. But of course, the system, it was not
created to make sense. It doesn't penalize you for not
(19:33):
paying your balance in full, and in fact, by making
a minimum payment, that is positive information that has sent
over to the credit ber. As long as you are
making that payment on time, they're perfectly happy for you did.
Speaker 1 (19:45):
Not pay off that balance. They don't care about the
in full thing which you and I talk about. They
just care about the on time exactly. And so like
what I mean, truly, what that means is as long
as you could rack up I guess, as long as
it's not more than say, twenty percent of your credit utilization.
That's what we talked about, you know, we talked about
that factor of your credit score before the break. But
you could spend a bunch of money on that card,
and let's just say stop spending on it all together
(20:06):
and then just only make minimum payments on that card.
Until you actually paid that thing off and you would
see twenty years later and you would only see your
credit score going up. Your credit score is certainly important,
but this is an instance where you don't want the
tail to wag the dog. Don't become so focused on
your credit score. They don't really that you forget Well,
why is that we even have the show, which is
for you to have more money, to be able to
(20:28):
choose how to save spend and give it away. Yeah. Yeah,
pay attention to it, but take it with a grain
of salt, because it's, like you said, it's kind of backwards. Yeah,
it's if I was if we were starting over from scratch,
which I would love to see, like we would do
away with kind of how opaque and silly some of
the metrics are.
Speaker 2 (20:44):
Yeah.
Speaker 1 (20:45):
In other lame credit news, the credit bureaus continue to
suck at their jobs. This is something Matt, you and
I harp on occasionally every few months or so because
one of the credit bureaus has done something horrific to
baffle us at heart consumer.
Speaker 2 (21:00):
Right.
Speaker 1 (21:00):
Yeah, and so this is a pattern we see regularly TransUnion. Now,
what's time for them to get there? Due they have
failed to place credit freezes quickly after the request has
been made. That's according to the New York Times reporting
this week, and so some requests didn't get process for days,
others took months and even years for TransUnion to finally complete.
So you're on your computer, You're clicking around like, boom,
(21:21):
freeze your credit should happen in mere seconds, right, Well, no,
not a TransUnion at least, right And this was putting
consumers who thought they were safe at real risk. And
the Consumer Financial Protection Bureau didn't take this lightly. They
accused the Bureau of lying to consumers. TransUnion now has
to pay a what I think is a minuscule settlement
where they didn't they don't have to admit any wrongdoing,
(21:42):
which is always the case in these things, which is
so infuriating. It's like, no, I just paid eight million
dollars in the settlement because we didn't do anything wrong.
It's like, well, who does that then? Like the fact
that they don't have to ever admit wrongdoing publicly is
the shadiest thing in the history of shady. But I
guess this begs the question, should you free your credit?
The answer is yes, absolutely you should, and hopefully TransUnion
(22:03):
is going to reform their ways. But and the bureaus
are awful, right, Their credit scoring system sucks. They're bad
at actually following through on the thing that they're legally
obligated to do. But it's the game we're all stuck
playing for the time being. And just because TransUnion doesn't
know their rear end from a hole in the ground
doesn't mean you shouldn't be freezing your credit and hoping
against hope that they actually follow through and do it.
Speaker 2 (22:24):
Yeah, and especially given how so you're talking about the
fee that they had to pay. You see millions of
dollars in you then you're like, oh, that's that's a
ton of money until you look at what their actual
revenue is TransUnion specifically, and I looked at them.
Speaker 1 (22:36):
Yes, they earned that in about two and a half hours.
Speaker 2 (22:39):
Yeah, basically it's something like half of one percent of
their annual revenues. I believe this is what they have
to pay as opposed to with this being at the
core of what it is that they provide. It's, in
my mind, is literally the one thing that's supposed to do.
It's like if you get a new roof installed in
your house and then oh no, it just leaks constantly.
It was like, that's the one thing I wanted it
to actually do. And the dismissal and the casual nature
(23:03):
that it seems that TransUnion is able to just walk
away from this is baffling.
Speaker 1 (23:07):
Yeah, it really is. It's it's basically though, because this
is a free product, federally guaranteed to us through legislation,
and they don't make a dime. So if it came
to one of their proprietary products, like a credit lock
or something like that, you better believe they're gonna get
right on that because you pay them thirty bucks a
moth or something like that to actually do it. But
when it comes to the credit freeze, which is which
they don't make a cent from, this is of course
(23:29):
something that they're gonna they're gonna take their time on
and they're not gonna care about it very much.
Speaker 2 (23:33):
And it's even more frustrating given that I think of
all the three bureaus, trans Union they've got the slickest
interface when it comes to the products that they're offering.
They've got they've got the nice website, they've got the
proprietary products, they've got the portal and where you log in,
you create an account, and you've got all these other
bells and whistles, but of course they don't do the
one thing that the government is requiring them to do exactly.
Speaker 1 (23:53):
And by the way, if you're kind of wondering, well,
what is the credit freeze? How do I freeze my credit?
Why is it so important? Wire Matt and Jowel talking
about it. We'll put an article in the show notes
where I kind of detail everything and I walk you
through exactly how to go about freezing your credit with
each of the three bureaus. It's really important, and that's
why it's so frustrating that TransUnion is just like completely
out to lunch on this one. But let's move on, Matt,
(24:14):
to other nefarious things. This is a collusion essentially by
the National Association of Realtors to keep the costs that
you pay, the transaction costs for real estate sky high.
And it took a Kansas City jury very little time
to come to a conclusion, the conclusion that we came
to a long time ago that the National Association of
Realtors has conspired to keep these fees inflated for decades.
(24:37):
And we've talked about this before on the show. But
now something might actually get done thanks thanks to this
case and a couple of others that are currently in
the legal system about the absurd commissions that realtors are
able to obtain because the system is so flawed, and
some predictions are saying that we could see a thirty
percent reduction fees in no time flat if this ruling
holds up, which is not great for realtors, but it's
(25:00):
amazing for consumers. We might even see more realtors offering
their services for a flat fee or for an hourly rate,
which are both great options for people to be able
to actually pick and choose how who they work with
and paying someone for their advice or based on you know,
the time spent instead of just that flat fee percentage
(25:20):
and so you know, we know we're paying what we're
paying for almost everything else upfront in life. When you
go to McDonald's, you know, the big mac is six
ninety nine or something. I don't know. They're probably more
expensive than that. I've seen some stories about how expensive
McDonald's is. It's been a while for me.
Speaker 2 (25:33):
Big mcmeal's like eighteen dollars in some occasions. Oh yeah, yeah,
I saw that, which is frightening, but at least you
know what you're paying before you actually get into it.
If you ordered and then they told you how much
you were going to have to pay and you were
locked into that, that would be a frightening thing, right,
And so what we pay a real estate agent when
we're buying or selling a home should be more transparent
to And like I said, the National Association of Realtors
(25:55):
faces even further litigation on this more cases come into
the courts, So we'll be talking about this more and
more in the months to come. But this is already
good news.
Speaker 1 (26:04):
I think. I think it's going to up in this
model that's been in existence for far too long.
Speaker 2 (26:10):
Absolutely. Yeah. And the way I look at it, I
actually don't mind the commission. It's just that the commission
is so stinking high. In my mind, it makes sense
that somebody who's working on a like a really really
stink and nice house, like, should they get paid the
same flat amount that they would for a house like
on the complete other side of town. I get it,
Like I get that there might be more work involved
when it comes to they I'm showing fancier property.
Speaker 1 (26:31):
Tiers of a flat fee. It doesn't have to be
sure a percentage team.
Speaker 2 (26:35):
Makes sense, but then you start kind of arriving, like
I guess at that sliding scale where there's like a
continue Again, I'm not a fan of paying six percent
of the sale of a home. That's insane. I think
the median price of a home sold today is like
four something like four hundred four to fifty something like that,
four fifteen, So like you're talking at least at like
(26:55):
twenty five thousand dollars that you are paying to a realtor.
That seems ridiculous, And oftentimes it's something that doesn't require
necessarily a ton of work. I know that there are
some realtors out there that work really stinking hard, of course,
but I also know lots of lots and lots of
deals that happened in the course of a week basically,
I mean not even a few messages go back and
(27:15):
forth and they're just there for the closing. Does that
warrant five figures for that one deal? Ah? Personally, you know,
I don't think so. But the actual commission model I'm
fine with. But maybe, like, let's just see it instead
of six percent, let's if it was four percent, right,
maybe each realtor is making two percent.
Speaker 1 (27:32):
Well, this is what a platform like Redfinn has been
trying to do, is trying to reduce the cost of commissions.
I think we're going to see Redfinn become more and
more competitive. I think we're going to see more models
like that, and I see competition in this space.
Speaker 2 (27:42):
The fact that this competition is causing the NRA.
Speaker 1 (27:44):
To have to react, and that's n AR, by the way,
in AR.
Speaker 2 (27:48):
More than the National Rifle Association a whole differently, don't
you guys get into this. Yeah, but either way, it's
a good thing. The fact that this is something that's
being discussed, something that's actually being being taken to court.
Speaker 1 (28:00):
I completely agree. And I think again we're going to
see a lot of these competing models springing up instead
of the de facto six percent, which is eating into
profits and much equity of your home when you sell
or it's you know, it's eating into the buyer like it.
It's a big chunk of change taken out of And again,
you and I we talk all the time. We value
realtors highly. Great realtors are worth their weight in gold.
(28:22):
They're just not worth three percent. So we just need
to change the model and make it more market based.
Right now, it's not.
Speaker 2 (28:28):
All right, So another another group of maybe a semi
in the various folks, the big banks. Turns out they've
been making bank at your expense. This is of course
always been the case. But the big brick and mortar,
the legacy banks, they've never offered competitive rates. It just
mattered a whole lot less a couple of years ago
when rates on high yield savings accounts were kind of
(28:51):
laughable at just like half a percent. And the latest
data shows that the big banks just saw their net
interest income increase by thirty percent in this is year
over year. And the reason for this is because as
rates have risen, right, so interest rates the big banks
they've raised their rates on credit cards and on mortgages,
but they haven't really increased their payouts when it comes
(29:13):
to savers. What it is that they're giving back to you.
One of our favorite banks, CET, they're offering rates north
of five percent, but crazily enough, most folks they are
not taking advantage of these higher rates. And so if
that's you, I think a good question is to ask
yourself why, like why are you not considering some of
these other banks. If it's because, oh this is the
(29:33):
this is the first bank I got when I was
a teenager. Okay, it's time for a new you. It's
a new era. It's time for you to start making
money on the money that you have in your savings.
Speaker 1 (29:45):
And just because you pass that Wells Fargo on the
way to work every day and it warms your heart,
the opposition happened, if it does, right, But there's always
that I can go in and talk to somebody. But
the reality is, in modern day life, most of us
don't need that. I can't tell you le's time a
good reason to go with one of the big banks.
I can't tell you the last time I actually ventured
forth into a physical branch location.
Speaker 2 (30:05):
But I think some folks also think that the bigger
banks are safer, right, And so we saw this when
the when some of the medium sized banks were collapsing,
and even experts in our field Joel like folks who
are really into finance were saying, this is a reason
why you want to stick with one of the big banks,
which blew my mind that they were even saying that,
because hello, FDIC insurance. As long as you have a
bank that's FDIC insured. It is just as safe as
(30:29):
you know, the massive banks that have the vast majority
of Americans well in early savings sitting there there.
Speaker 1 (30:35):
When I saw that number, I want to say, it
was like only twenty percent of folks are earning more
than three percent in their savings something crazy like that.
Speaker 2 (30:41):
It is insane.
Speaker 1 (30:41):
So it makes me think, how much have we talked
about this, but how few people are actually taking the
advice no yeah, and doing the thing.
Speaker 2 (30:48):
The big the big name still have all the money
exactly Like I think a lot of folks might be
hearing this and they're like, guys, yeah, I've been with Ally,
or I've been with c I T, I've I've been
with one of the good guys for years now. But
based on the data, there are still there's a tremendous
number of folks. Maybe it's fifty not made.
Speaker 1 (31:04):
The switch, fifty to fifty of folks listening to this
episode A listen to this episode, listening to this podcast.
But the fifty percent of folks listening who haven't done
it need to do it because we're we're talking about
leaving hundreds and hundred of dollars on the table and
just doing your doing business with a much primean institution
until you switch, all right, And by the way, the
toughest part about ditching a bank isn't typically because there's
this loving relationship there. It's the annoyance of having to
(31:26):
move everything over. I totally get that.
Speaker 2 (31:28):
Well.
Speaker 1 (31:28):
The CFPB, we talked about them earlier, the Consumer Financial
Protection Bureau, interestingly enough, is about to propose a rule
that could make switching banks a whole lot easier. They
want banks to make it simpler for you to send
banking transaction data from one banker credit union to another,
because of course, that is the barrier that causes so
many people to stay put. And we'll let you know
(31:49):
if this proposal gets finalized, but this would be a
big win for consumers and hopefully a gargantuan loss for
the biggest banks who are banking pun intended matt on
inertia bias from you. That is actually what happens. Most
people stay put, not because they're in love with the
bank that they do business with, but just because they're like,
should I do I need to? I probably won't. I'm
gonna go play pickleball instead or whatever, you know, And
(32:10):
so it's I'm hoping that there's a system created that
makes it easy to funnel all your stuff to a
new bank, and that you're not having to manually input
all that data again and all your bill pay and
blah blah blah blah blah. That would make it a
lot simpler for folks. That's right, all right, bad news
for budgeters.
Speaker 2 (32:27):
The longest standing, most popular budgeting app out there. I
think they've got something like three point six million monthly
active users. It's going away. The folks over at into it.
They are shutting down Mint. They're Joel shedding a tear
over here.
Speaker 1 (32:42):
They're rolling someone. I mean, I've been using it for
ten plus years, man.
Speaker 2 (32:45):
Yeah, so some of the features evidently are going to
get rolled into one of their other assets, Credit Karma.
It seems like they're trying to create like a super app.
They're taking Elil Musk's wishes for X seriously because he's
trying to trying to make it the zuper app.
Speaker 1 (32:59):
Now it's going to be this Credit Karma X head
to head back.
Speaker 2 (33:01):
Yeah, so we'll see if this actually ends up panting out. Well,
but Mint is going to be a relic of the
past come January first, and if you are an avid
Mint user, then now is a good time to start
at least kicking the tires on some of the other
options out there. Why nab you need a budget that's
tops in our book, but there are plenty of others
out there. Folks in the how to Money Facebook group
(33:24):
have been sharing their favorite budgeting apps every Dollar, Tailler,
co Pilot. These are all fantastic options out there. Not
to mention, just straight up Microsoft Excel's That's what I've
been rolling for close to fifteen years right now. Excel sheets.
Those are of course all options as well. If you
want to do a more manual DIY budgeting.
Speaker 1 (33:42):
Approach, for sure. Yeah, but pour one out for my
homie Mint, because that's been a good service for a
long time and I don't to it gobbled.
Speaker 2 (33:49):
Them up and now they're putting it out to pasture.
Speaker 1 (33:51):
I feel like there was a little knife in the
back there from into it. But it's okay a And
I'm hoping that credit I love our credit carm al rdy. Yeah,
credit card is great, great site. So I'm hoping that
the credit Karma Mint combo mintifying credit Karma maybe maybe
does make it a one stop shop and a place
for me to turn for budgeting tracking and simultaneously knowing
more and seeing what's going on with my credit. But
(34:12):
we'll keep you up to speed on that and best
of luck finding a new budgeting app if you're a
Mint user. But Matt, that's gonna do it for this episode.
And well, by the way, I think we will kind
of put more information about that in our newsletter on Tuesday.
If you're not subscribed to the how to Money newsletter,
make sure you go do that. We'll have kind of
a roundup and descriptions of some of those budgeting apps
(34:33):
that you might be interested in, So check it out.
Speaker 2 (34:35):
You can go dig in on your own, or you
can head over to how to money dot com forard
slash newsletter. Make sure you are signed up and you
will have that information delivered directly to you. That's right,
all right. I mean, that'll be it for this episode
until next time. Best Friends Out, Best Friends Out, m
(35:01):
fol
Welcome to Hod of Money. I'm Joel, I'm Matt, and
today we're talking top tier gas, credit freeze failure and
bad news for budgeters. You got pretty excited talking about
(00:30):
top tier gas due.
Speaker 2 (00:32):
I felt the energy coursing shooting across the table. Our
listeners felt that energy coursing through their earbuds.
Speaker 1 (00:39):
It's top tier gas, man, it's probably funny. Probably people
probably don't know that's actually a designation of a type
of gasoline.
Speaker 2 (00:46):
It's trademarked, and it's.
Speaker 1 (00:48):
Important for you to know about. It's something I don't
know if we've ever really talked about on the show.
Speaker 2 (00:50):
We have, Actually, I feels like that's the kind of
topic that my dad's going to be really too. So
I think it's been a minute since he's listened, but
he's going to be excited that we are talking about
us on its Boomers, our main audience, by the way,
I think it's just this came out.
Speaker 1 (01:04):
They actually are a good part of our real lidy. Well, yeah,
we love you.
Speaker 2 (01:07):
I love boomers. I wasn't going to acknowledge your joke.
You're staying there. I know you're saying. I wanted to
mention we've touched on this in previous months, but I
guess the IRS officially announced that the maximum contribubutions that
you can make to a roth ira or not a
roth just to an ira generally speaking to a four
to one K, that they officially increase those limits as
(01:27):
of I think a couple of days ago, five hundred
bucks each. Yeah. Yeah, so iras are up to seven
thousand dollars now four one ks are up to twenty
three thousand dollars. Start starting next year, Yeah, starting in January.
We talked about this though back in August, and I
don't know. I remember we came across a legit source
and I don't know if we found somewhere on the
iris's website where that infrom, where there's a leak or
(01:50):
something like that, But I know one percent that we
told folks, hey, seven thousand dollars, start preparing for that
next year.
Speaker 1 (01:56):
It's so funny because the press release literally came out
in November first, but you and I I remember us
talking about it, and I remember us seeing it somewhere
where in the world do we get I don't know.
I think maybe she get slipped through and you've got
contacts ors and the IRS or hot on the trail.
Maybe you got a personal personal DM from the guy
who's the head of the IRS.
Speaker 2 (02:12):
Well, I don't think we talked about four one k's.
I know we talked about iras being seven thousand because
I like those those nice even numbers. Yeah, that's it.
I think that's what we're having the same conversation, because
I think I remember talking.
Speaker 1 (02:22):
About if I had mind brothers, I would I would
have them up at to seventy two hundred dollars because
that makes it there, you go even by twelve exactly.
Why would you not make it nice and easy for folks. Yeah,
but obviously the IRS does not care.
Speaker 2 (02:35):
About marketing or behave the behavioral side of economics. They're
only looking at They should hire us to advise them
bring old numbers. But I don't want to work for
the IRS.
Speaker 1 (02:44):
No.
Speaker 2 (02:44):
Yeah, I like working for you, but I think I
think you like working for me.
Speaker 1 (02:48):
Yeah, it's good, it's a good symbiotic relationship. Well, it's
I think it's just good to note and obviously not
like tons of folks out there able to max both.
But if you can max both, that's thirty grand a
year going into the retirement accounts.
Speaker 2 (03:00):
I love it.
Speaker 1 (03:01):
And so even if you can't now, maybe the goals
to max out the roth Ira seven grand next year
and get the match at least in your in your
four one k. And then the next goal is I
keep adding more into the four one k. Maybe one
of these days, maybe a few years from now, you
can max both of them out. That'd be awesome. Ye.
Speaker 2 (03:16):
Let that be your goal.
Speaker 1 (03:17):
Yeah, let's get on, move on, Let's get to the
Friday flight. The sampling of stories we found interesting, more
great stories, Yeah, more helpful advice. Let's talk about consumption
to start with. There's a lot of interesting stories, by
the way that we got to talk about today. But
there was this article in The Atlantic this week. It
was called the Junk is Winning And the writer of
this article she's she's not wrong, Matt, Like we live
(03:39):
in an era where we're being sold stuff all the time.
Like every time we go online, every click of the mouse,
every swipe of the finger, it feels like someone is
trying to get inside of our wallets. And we're even
referred to as consumers. You know, we try to avoid
that language, although it does get used sometimes on the show.
But that's largely because the economy runs on our ever
presentability and desire to consume more and more. Right, And
(04:02):
so this writer specifically referenced the fact that you can
now buy crap, and I use that term intentionally. You
can truly buy crap on TikTok, real dookie, like fake fake,
you can like honestly, just the kinds of things being
sold on there are not long lasting, treasured heirlooms I'm
trying to get at. And we talked about the fact
(04:22):
that you can buy stuff on TikTok recently, how that's
turning into kind of a consumer site. I'll instagram, Well,
the TikTok shop.
Speaker 2 (04:30):
They're taking it to a whole nother, whole other level
than just an ad where oh, by the way, you
can go ahead and click this and takes you to
an external site. Yeah.
Speaker 1 (04:37):
And then there are other sites that aren't necessarily social
media related, like Chinese sites in particular, like wish and Tamu,
and they've taken the race to the bottom to another level.
We don't talk about those that much because again, it's
mostly cheap crap. And so she actually ends the article
by saying that, and I quote a lot of the
things that can be made to seem glamorous or ingenious
(04:58):
in a two minute video would be better off delivered
directly to goodwill, to which you will inevitably donate them.
At least you'd save yourself a future in Aaron in
the future, Right. That's incredibly true, and I think she's
spot on. It's like, there's a way that social media
and that advertising and marketing glamorizes things, and that seven
dollars jacket or two dollars fifty cent t shirt or
(05:19):
something like that, or the fake Pooh whatever it is,
it just sounds it seems so fun and goofy and like,
oh yeah, but why not, I'll click to purchase. But
I think just remember that next time you're tempted to
purchase something on a whim.
Speaker 2 (05:32):
Yeah, it makes it seem glamorous. It simultaneously makes it
seem more personal, because that's the inherent nature of social media.
You've got people who you follow, and because you follow them,
it feels like you know them. And it truly makes
me think back to like back in the eighties and
back in the nineties, QVC, the home shopping network. It
was a massive industry and folks were getting pulled and
(05:52):
sucked into the same sort of behavior, and we can
look back now and kind of laugh at it. It seems
it seems silly. And now when you are you know,
you get something that's recommended to you by an influencer,
it feels more personal. It's like you've got a friend
who's saying, hey, this is something you need, a friend
with insider knowledge. You didn't realize this, but I know
you and they don't know you. A b you need this,
(06:15):
by the way, you don't need that. And I'm curious
how long it's going to take before we look back
at this sort of era that we're in currently and
we laugh at it in the same way that we
look back to the home shopping network and just the
useless stuff that folks were buying back then that they're
also doing now, Because in reality, it truly is exactly
it's the exact same model. It's just following just the
new version. It's the new version. It's following the same
(06:37):
path that media has taken, just the atomization where it
feels like you are going directly to an individual as
opposed to everybody logging onto the watching the same network.
Speaker 1 (06:47):
And the problem is, though it's like they're these tentacles,
like and because of who we follow and the things
we watch and how we scroll, they've got their hooks
in us. And it's really cookies specifically, right, Yeah, it's.
Speaker 2 (07:00):
What they've got it.
Speaker 1 (07:00):
It's hard to resist. Yeah, but I think we have
to think about the last ten things you bought, maybe
even go actually look at your Amazon purchase history or whatever,
maybe the thing you actually did buy on TikTok shop,
look at the things in the past and be like,
do I actually use that? Is it that I get
my money's worth? Was it valuable for me? And I
think maybe looking back at those prior purchases can help
inform future purchases and can give us maybe like take
(07:21):
off the rose color classes and help us see through
a clear class pain, like through reality. How much it
helps her hurts totally.
Speaker 2 (07:28):
Yeah. So this makes me think of another article we
came across this week in Kiplinger about financial fasting, and
I'm not sure if now is actually the perfect time
for those given the up upcoming holiday season, given the
likelihood and almost everyone out there listening is going to
buy at least something for a family member, for a friend,
but even still, I think it's a good idea to
start planning one of these, one of these financial fasts,
(07:51):
perhaps for the new year, maybe come January, because we've
gotten so used to shopping when we are bored, right,
it's just the default reaction. We whip out the phone,
you start scrolling. You know that. I think a lot
of us have developed a reflexive habit when it comes
to purchasing stuff. And so I think a financial fast,
just a period of time where you are refusing to
(08:12):
spend eighty dollars at all, even if it's just for
a couple of days, I think that can start to
unwind that cycle. I think it can help to detach
you from that consumeristic impulse. As I was saying detaching,
I was picturing Neo detaching from the from the matrix.
I mean, it feels like it's a lot like that.
It's almost that radical of a move, yes, And I
think this can help you to know figure out how
(08:33):
to spend much more mindfully while simultaneously allowing you to
make bigger progress on some of the other money goals
that you might have, like like paying down debt or
actually achieving something big, something something noteworthy as opposed to
something like you said, or like the writer said that
she's just gonna end up donating directly to goodwill.
Speaker 1 (08:51):
So I know it's not like January first, but maybe
now is a good time to put a few dates
on the calendar and talk to your spouse or your
best friend or something and say, hey, listen, what about
that second week in January, the first speak in Jenu
or whatever it is, or maybe the first two weeks
in January. Can we put those on the calendar. Commit
to doing something like this, because I think it can,
like you said, help kind of rewire our brains in
a certain way. And Matt, a couple of years ago,
you know, we did we had a couple of money
(09:12):
challenges that we that we put forth to people. Maybe
we should reinstitute that at the beginning of twenty twenty
four as well, give people another kind of how to
money push to all do these things where like the
sell your Stuff challenge and the max your Wroth challenge
and stuff like that, and we'll gain Maybe we'll put
it out there in the newsletter or something like that
and offer all those forms up again obviously free of charge,
just to kind of help you have a schedule to
(09:34):
keep to and a challenge to put yourself up against,
because I think that can be really powerful too when
it comes to actually getting the job done.
Speaker 2 (09:41):
Totally. Yeah, okay, So we've talked about credit limits before,
and of course, when you have a low amount of
credit that's available to you, that can negatively impact your
credit score because if you use that credit card too much, right,
if you are getting close to that limit each month,
it's going to cause your credit utilization to go up,
which is going to harm that all important three credit score.
So we've talked about how you can call your credit
(10:03):
card company. You can simply ask them for an increase
on that limit. Oftentimes they'll say yeah, of course, and
it'll help you to improve your score. But there's also
the downside to higher credit limits. Not surprisingly, banks are
realizing that if they up individual's limits that they're gonna
go ahead and they're gonna spend, They're gonna consume more,
(10:23):
they're gonna put more on their credit cards, and they'll
often not pay off that balance on time and in full,
which is one of our golden rules. We've actually got
an article about the Golden rules to using credit cards
that will link to in our show notes. And so
the reason we wanted to bring this up is because
the flyers that you get in the mail, where there
are banks saying, hey, you've been a great customer, you've
(10:45):
utilized this card, what about this card, And in the
back of your mind, you're on one shoulder you have
Matt and Joel saying, yeah, that'll increase your credit, that'll
decrease your credit utilization rate, because you'll have more credit
available to you. But just because that's being offered to
you doesn't necessarily mean that that's something that you should
pounce on. Even receiving an email, just a notice from
your credit card company, if they're saying, hey, you've been
(11:06):
a valued customer, how about we up that from twelve
thousand to fifteen thousand to sixteen thousand, you might be
tempted into thinking, oh, yeah, this is a one way
ticket to eight hundred and fifty land or whatever credit
score you're trying to attain to. But you can also
be tempted down a path of spending. And like we're
talking about, we're surrounded by companies who want to part
(11:29):
us from our dollars. As they're trying to, you know,
hawk their wares.
Speaker 1 (11:31):
Yeah, so it is a double edge ord more than
I even realized because I didn't I didn't necessarily assume
that people saw that as a green light to spend more.
But it turns out people do, and it shouldn't be.
It really is. The only reason for like a high
credit limit on your on your credit card is in
my mind, to help boost that utilization ratio to give
you a higher credit score. But a lot of people
(11:54):
see that as like a challenge to see to ride
to the occasion, to see if they can spend up
to that full amount or something.
Speaker 2 (11:59):
It sounds like, oh, looks like I'm a boller now,
which you got to start spending like a boller, right.
Speaker 1 (12:03):
Which makes sense, I guess in America, given how we
handle money as a culture. But it's terrible. It's terrible,
and we want how to money listeners to take advantage
of a higher limit, but don't let that ruin your
discipline or do anything actually to your spending. You're still
budgeting like normal, and you're still paying off that balance
on time and to fall at the end of every month.
And we actually have more to get to on credit.
(12:24):
In particular, something nefarious that TransUnion is done. We'll talk
about that in just a bit. All right, Well, let's
talk about top tier gas. There was an article on Yahoo,
which apparently still exists, and they wrote specifically about this
concept of top tier gas, and I was like, I
know about top tier gas, but how come we've never
talked about it on the show board before? We really
need to. And top tier gas is essentially a superior
(12:45):
version of gas that you can put in your car
and it's better for your engine. There was a triple
A study and it found that top tier gas keeps
your engine nineteen times cleaner than putting in alternate gas.
Speaker 2 (12:56):
Which nineteen x. It's basically not nineteen percent, right, cleaner,
eighteen times cleaner. So it's so much better. It's because
they put certain detergents in the fuel that makes it
better for your engine.
Speaker 1 (13:07):
So, but here's the thing. Not every gas station sells it.
For instance, Costco does, but Sam's Club doesn't, QT does,
but BUCkies does not. So if you're a Bucket fanatic,
well maybe go just for the just for the candy
and the Soto fountain on a barbecue, the barbecue, Yes.
Speaker 2 (13:22):
For the barbecue. Bikinis gotta love them, BUCkies bikinis. Are
you getting one for what we say joked about us
getting our wives.
Speaker 1 (13:30):
Yeah, those last year before our summer beech strip if
they're if they're go on sale or something that would
make a good white elephant gift. Okay, but you really
don't want to pay more for top tier gas. You
don't need to. When you look at the numbers, top
tier gas costs on average three cents more gallon, so
it's it's a negligible price difference. But actually, when you're
talking about it being sold at Costco, it's Costco gas
(13:50):
is cheaper than basically anywhere else out there.
Speaker 2 (13:52):
Sound there.
Speaker 1 (13:53):
And the thing is buying top tier gasoline could save
you a meaningful amount of wear and tear on those
engine components, which means it's frugal, not not cheap, to
buy the top tier gas. And there's a website, top
tiergas dot com. We'll link to that in the show notes,
where you can look to see which gas stations sell
this better version of gas. In my mind, is just
(14:13):
another reason to be a Costco member. Phill up there
if it's convenient, but at minimum look to see. Okay,
if it's a deciding factor between a few different gas
stations in your area where you do the bulk of
your filling up. If one sells top tier gas and
one doesn't, that's where you want to go.
Speaker 2 (14:26):
Yeah, Or you can just scuirt a little bit of
a dishwashing detergent in your next time you're filling it.
Speaker 1 (14:30):
Don't think that's how it works.
Speaker 2 (14:31):
I think that'll help it to stay clean as well.
Speaker 1 (14:33):
It's going to lead to some one star reviews, I think, Matt.
Speaker 2 (14:36):
By the way, this is different. It's funny we're talking
about gas. I recently discovered that how important ethanol free gases,
specifically when it comes to small engines, like if you've
got a generator or a motor that you rarely use,
even like a boat, because so ethanol it's derived from corn,
but it is an alcohol, and it's corrosive to like
(14:59):
a small engine part arts and so oftentimes that is
what will cause small engines to fail. It's the fact
that it's sat there over time, and that that gasoline
that has and almost all gas has ethanol in it,
just a small amount, and it's totally fine for like
our modern engines. Evidently I'm not like a pro on this,
but if you are looking at something like you said,
a lawn mower, or in my case, it was a generator.
(15:20):
And that's when I learned that, Oh, from now on,
I need to I need to make sure I am
putting ethanol free gas. And there's a website actually that
will link to as well that where you can punch
that in and find gas stations locally that sell that way.
Here's a website for everything, for everything, can you believe it? So, yeah,
we're talking about gas prices. Maybe we're kind of talking
about travel here a little bit. So let's segue to
plane ticket pricing for a minute, because new research sheds
(15:44):
some light on a lot of the so called hacks
that have been touted to help us to save when
it comes to flights. When it comes to airfare, some
actually work, but many of them don't. So for instance,
buying on a Tuesday, that's been one recommend recomm maybe
that you've seen floating around the internet that's lingered or
(16:04):
using incognito mode in order to fool the algorithm, because
sometimes folks were thinking, well, if I visit it and
I searched the flights, the next time I come back
to actually book it, it's gonna no, I'm back, and
they're gonna charge me more.
Speaker 1 (16:16):
Pumping up by twenty bucks.
Speaker 2 (16:17):
Evidently these have no real impact. This is according to
the folks over at the has Business School that's at
cal Berkeley. So our advice use just something basic like
Google Flights. There are plenty of different flight comparison sites,
but Google Flights is amazing. Make sure that you check
out Southwest dot com. Make sure that you're getting their
fare alerts.
Speaker 1 (16:35):
Because again Southwest fairs do not get input in Google Flights.
So if you want to actually look at the whole
broad market of airfares and Southwest being one of the
best discount airlines, you want to Google flights and Southwest well.
Speaker 2 (16:46):
And if you know you've got a bunch of travel
coming up as well, make sure that you are looking
at the companion pass. That's not something we've talked about recently,
but that gives you unlimited flights for a companion to
come along with you. Right, it's so much better than,
for instance, the Delta companion pass, where it's good for
a single flight unlimited flights for the rest of that
year and all of the next year. Yeah, but then
(17:07):
more than anything else too. Just being a bit more
flexible when it comes to your travel, which is of
course going to be difficult, say for a family with kids,
and oftentimes you're tied to that school calendar. If you're
going to take a flight, if you're flying somewhere over Thanksgiving,
well it's hard to be flexible on your dates. Yeah,
But when it comes to other travel zig while other
(17:27):
people are zagging essentially right like you can, you still
have options available to you. So if you're looking at
summer travel, look at the very beginning of that. Essentially,
look at the shoulder season, look at the very beginning,
look at the very end, as opposed booking something smack
dab right in the middle of summer over July fourth,
when everybody wants to go see their family.
Speaker 1 (17:45):
Yeah, yeah, I know, And we're usually kind of we
prefer airline agnostic travel cards. So if you're looking to
get points or something to use for some of those trips,
the Capitol One venture X and the Chase Safire preferred
or two of the best, the only exception being if
Southwest is in your market, the Southwest card because of
the easier redemption of those points and because of the
(18:06):
potential to get that companion pass, Matt. That elevates that
above the other airline card shoulders above the regificantly right. So,
and if you're curious about how to get the best
travel card for you, we can go to our website
how tomoney dot com. There is the credit card tool.
Just click on that in the upper right hand corner.
It makes it's like an easy way to filter and
find the best credit card for you. But we've got
more to get to on this episode, of course, Matt.
(18:27):
We got to talk about a recent ruling and how
that could impact and upset the apple cart in the
real estate industry in a good way, in a good
way for consumers, a bad way for realtors. We'll talk
about that and more right after this.
Speaker 2 (18:47):
We are back from the break, this time now for
our ludicrous headline of the week. This was from CNBC
and the headline reads, credit scores hit an all time
high even though households are falling deeper into debt. And
we talked about credit limits just before the break, But
this is just another sign of how backwards the credit
scoring industry truly is. It's difficult to imagine this. It's
(19:10):
hard to fathom how credit scores are rising that report
show that the average score is now seven hundred and eighteen.
It's by a lot of points, which is great over
the past ten years ago. News. This should be the
three digit number that reflects how people are doing, how
folks are handling their finances, yet their debt loads are
going up. But of course, the system, it was not
created to make sense. It doesn't penalize you for not
(19:33):
paying your balance in full, and in fact, by making
a minimum payment, that is positive information that has sent
over to the credit ber. As long as you are
making that payment on time, they're perfectly happy for you did.
Speaker 1 (19:45):
Not pay off that balance. They don't care about the
in full thing which you and I talk about. They
just care about the on time exactly. And so like
what I mean, truly, what that means is as long
as you could rack up I guess, as long as
it's not more than say, twenty percent of your credit utilization.
That's what we talked about, you know, we talked about
that factor of your credit score before the break. But
you could spend a bunch of money on that card,
and let's just say stop spending on it all together
(20:06):
and then just only make minimum payments on that card.
Until you actually paid that thing off and you would
see twenty years later and you would only see your
credit score going up. Your credit score is certainly important,
but this is an instance where you don't want the
tail to wag the dog. Don't become so focused on
your credit score. They don't really that you forget Well,
why is that we even have the show, which is
for you to have more money, to be able to
(20:28):
choose how to save spend and give it away. Yeah. Yeah,
pay attention to it, but take it with a grain
of salt, because it's, like you said, it's kind of backwards. Yeah,
it's if I was if we were starting over from scratch,
which I would love to see, like we would do
away with kind of how opaque and silly some of
the metrics are.
Speaker 2 (20:44):
Yeah.
Speaker 1 (20:45):
In other lame credit news, the credit bureaus continue to
suck at their jobs. This is something Matt, you and
I harp on occasionally every few months or so because
one of the credit bureaus has done something horrific to
baffle us at heart consumer.
Speaker 2 (21:00):
Right.
Speaker 1 (21:00):
Yeah, and so this is a pattern we see regularly TransUnion. Now,
what's time for them to get there? Due they have
failed to place credit freezes quickly after the request has
been made. That's according to the New York Times reporting
this week, and so some requests didn't get process for days,
others took months and even years for TransUnion to finally complete.
So you're on your computer, You're clicking around like, boom,
(21:21):
freeze your credit should happen in mere seconds, right, Well, no,
not a TransUnion at least, right And this was putting
consumers who thought they were safe at real risk. And
the Consumer Financial Protection Bureau didn't take this lightly. They
accused the Bureau of lying to consumers. TransUnion now has
to pay a what I think is a minuscule settlement
where they didn't they don't have to admit any wrongdoing,
(21:42):
which is always the case in these things, which is
so infuriating. It's like, no, I just paid eight million
dollars in the settlement because we didn't do anything wrong.
It's like, well, who does that then? Like the fact
that they don't have to ever admit wrongdoing publicly is
the shadiest thing in the history of shady. But I
guess this begs the question, should you free your credit?
The answer is yes, absolutely you should, and hopefully TransUnion
(22:03):
is going to reform their ways. But and the bureaus
are awful, right, Their credit scoring system sucks. They're bad
at actually following through on the thing that they're legally
obligated to do. But it's the game we're all stuck
playing for the time being. And just because TransUnion doesn't
know their rear end from a hole in the ground
doesn't mean you shouldn't be freezing your credit and hoping
against hope that they actually follow through and do it.
Speaker 2 (22:24):
Yeah, and especially given how so you're talking about the
fee that they had to pay. You see millions of
dollars in you then you're like, oh, that's that's a
ton of money until you look at what their actual
revenue is TransUnion specifically, and I looked at them.
Speaker 1 (22:36):
Yes, they earned that in about two and a half hours.
Speaker 2 (22:39):
Yeah, basically it's something like half of one percent of
their annual revenues. I believe this is what they have
to pay as opposed to with this being at the
core of what it is that they provide. It's, in
my mind, is literally the one thing that's supposed to do.
It's like if you get a new roof installed in
your house and then oh no, it just leaks constantly.
It was like, that's the one thing I wanted it
to actually do. And the dismissal and the casual nature
(23:03):
that it seems that TransUnion is able to just walk
away from this is baffling.
Speaker 1 (23:07):
Yeah, it really is. It's it's basically though, because this
is a free product, federally guaranteed to us through legislation,
and they don't make a dime. So if it came
to one of their proprietary products, like a credit lock
or something like that, you better believe they're gonna get
right on that because you pay them thirty bucks a
moth or something like that to actually do it. But
when it comes to the credit freeze, which is which
they don't make a cent from, this is of course
(23:29):
something that they're gonna they're gonna take their time on
and they're not gonna care about it very much.
Speaker 2 (23:33):
And it's even more frustrating given that I think of
all the three bureaus, trans Union they've got the slickest
interface when it comes to the products that they're offering.
They've got they've got the nice website, they've got the
proprietary products, they've got the portal and where you log in,
you create an account, and you've got all these other
bells and whistles, but of course they don't do the
one thing that the government is requiring them to do exactly.
Speaker 1 (23:53):
And by the way, if you're kind of wondering, well,
what is the credit freeze? How do I freeze my credit?
Why is it so important? Wire Matt and Jowel talking
about it. We'll put an article in the show notes
where I kind of detail everything and I walk you
through exactly how to go about freezing your credit with
each of the three bureaus. It's really important, and that's
why it's so frustrating that TransUnion is just like completely
out to lunch on this one. But let's move on, Matt,
(24:14):
to other nefarious things. This is a collusion essentially by
the National Association of Realtors to keep the costs that
you pay, the transaction costs for real estate sky high.
And it took a Kansas City jury very little time
to come to a conclusion, the conclusion that we came
to a long time ago that the National Association of
Realtors has conspired to keep these fees inflated for decades.
(24:37):
And we've talked about this before on the show. But
now something might actually get done thanks thanks to this
case and a couple of others that are currently in
the legal system about the absurd commissions that realtors are
able to obtain because the system is so flawed, and
some predictions are saying that we could see a thirty
percent reduction fees in no time flat if this ruling
holds up, which is not great for realtors, but it's
(25:00):
amazing for consumers. We might even see more realtors offering
their services for a flat fee or for an hourly rate,
which are both great options for people to be able
to actually pick and choose how who they work with
and paying someone for their advice or based on you know,
the time spent instead of just that flat fee percentage
(25:20):
and so you know, we know we're paying what we're
paying for almost everything else upfront in life. When you
go to McDonald's, you know, the big mac is six
ninety nine or something. I don't know. They're probably more
expensive than that. I've seen some stories about how expensive
McDonald's is. It's been a while for me.
Speaker 2 (25:33):
Big mcmeal's like eighteen dollars in some occasions. Oh yeah, yeah,
I saw that, which is frightening, but at least you
know what you're paying before you actually get into it.
If you ordered and then they told you how much
you were going to have to pay and you were
locked into that, that would be a frightening thing, right,
And so what we pay a real estate agent when
we're buying or selling a home should be more transparent
to And like I said, the National Association of Realtors
(25:55):
faces even further litigation on this more cases come into
the courts, So we'll be talking about this more and
more in the months to come. But this is already
good news.
Speaker 1 (26:04):
I think. I think it's going to up in this
model that's been in existence for far too long.
Speaker 2 (26:10):
Absolutely. Yeah. And the way I look at it, I
actually don't mind the commission. It's just that the commission
is so stinking high. In my mind, it makes sense
that somebody who's working on a like a really really
stink and nice house, like, should they get paid the
same flat amount that they would for a house like
on the complete other side of town. I get it,
Like I get that there might be more work involved
when it comes to they I'm showing fancier property.
Speaker 1 (26:31):
Tiers of a flat fee. It doesn't have to be
sure a percentage team.
Speaker 2 (26:35):
Makes sense, but then you start kind of arriving, like
I guess at that sliding scale where there's like a
continue Again, I'm not a fan of paying six percent
of the sale of a home. That's insane. I think
the median price of a home sold today is like
four something like four hundred four to fifty something like that,
four fifteen, So like you're talking at least at like
(26:55):
twenty five thousand dollars that you are paying to a realtor.
That seems ridiculous, And oftentimes it's something that doesn't require
necessarily a ton of work. I know that there are
some realtors out there that work really stinking hard, of course,
but I also know lots of lots and lots of
deals that happened in the course of a week basically,
I mean not even a few messages go back and
(27:15):
forth and they're just there for the closing. Does that
warrant five figures for that one deal? Ah? Personally, you know,
I don't think so. But the actual commission model I'm
fine with. But maybe, like, let's just see it instead
of six percent, let's if it was four percent, right,
maybe each realtor is making two percent.
Speaker 1 (27:32):
Well, this is what a platform like Redfinn has been
trying to do, is trying to reduce the cost of commissions.
I think we're going to see Redfinn become more and
more competitive. I think we're going to see more models
like that, and I see competition in this space.
Speaker 2 (27:42):
The fact that this competition is causing the NRA.
Speaker 1 (27:44):
To have to react, and that's n AR, by the way,
in AR.
Speaker 2 (27:48):
More than the National Rifle Association a whole differently, don't
you guys get into this. Yeah, but either way, it's
a good thing. The fact that this is something that's
being discussed, something that's actually being being taken to court.
Speaker 1 (28:00):
I completely agree. And I think again we're going to
see a lot of these competing models springing up instead
of the de facto six percent, which is eating into
profits and much equity of your home when you sell
or it's you know, it's eating into the buyer like it.
It's a big chunk of change taken out of And again,
you and I we talk all the time. We value
realtors highly. Great realtors are worth their weight in gold.
(28:22):
They're just not worth three percent. So we just need
to change the model and make it more market based.
Right now, it's not.
Speaker 2 (28:28):
All right, So another another group of maybe a semi
in the various folks, the big banks. Turns out they've
been making bank at your expense. This is of course
always been the case. But the big brick and mortar,
the legacy banks, they've never offered competitive rates. It just
mattered a whole lot less a couple of years ago
when rates on high yield savings accounts were kind of
(28:51):
laughable at just like half a percent. And the latest
data shows that the big banks just saw their net
interest income increase by thirty percent in this is year
over year. And the reason for this is because as
rates have risen, right, so interest rates the big banks
they've raised their rates on credit cards and on mortgages,
but they haven't really increased their payouts when it comes
(29:13):
to savers. What it is that they're giving back to you.
One of our favorite banks, CET, they're offering rates north
of five percent, but crazily enough, most folks they are
not taking advantage of these higher rates. And so if
that's you, I think a good question is to ask
yourself why, like why are you not considering some of
these other banks. If it's because, oh this is the
(29:33):
this is the first bank I got when I was
a teenager. Okay, it's time for a new you. It's
a new era. It's time for you to start making
money on the money that you have in your savings.
Speaker 1 (29:45):
And just because you pass that Wells Fargo on the
way to work every day and it warms your heart,
the opposition happened, if it does, right, But there's always
that I can go in and talk to somebody. But
the reality is, in modern day life, most of us
don't need that. I can't tell you le's time a
good reason to go with one of the big banks.
I can't tell you the last time I actually ventured
forth into a physical branch location.
Speaker 2 (30:05):
But I think some folks also think that the bigger
banks are safer, right, And so we saw this when
the when some of the medium sized banks were collapsing,
and even experts in our field Joel like folks who
are really into finance were saying, this is a reason
why you want to stick with one of the big banks,
which blew my mind that they were even saying that,
because hello, FDIC insurance. As long as you have a
bank that's FDIC insured. It is just as safe as
(30:29):
you know, the massive banks that have the vast majority
of Americans well in early savings sitting there there.
Speaker 1 (30:35):
When I saw that number, I want to say, it
was like only twenty percent of folks are earning more
than three percent in their savings something crazy like that.
Speaker 2 (30:41):
It is insane.
Speaker 1 (30:41):
So it makes me think, how much have we talked
about this, but how few people are actually taking the
advice no yeah, and doing the thing.
Speaker 2 (30:48):
The big the big name still have all the money
exactly Like I think a lot of folks might be
hearing this and they're like, guys, yeah, I've been with Ally,
or I've been with c I T, I've I've been
with one of the good guys for years now. But
based on the data, there are still there's a tremendous
number of folks. Maybe it's fifty not made.
Speaker 1 (31:04):
The switch, fifty to fifty of folks listening to this
episode A listen to this episode, listening to this podcast.
But the fifty percent of folks listening who haven't done
it need to do it because we're we're talking about
leaving hundreds and hundred of dollars on the table and
just doing your doing business with a much primean institution
until you switch, all right, And by the way, the
toughest part about ditching a bank isn't typically because there's
this loving relationship there. It's the annoyance of having to
(31:26):
move everything over. I totally get that.
Speaker 2 (31:28):
Well.
Speaker 1 (31:28):
The CFPB, we talked about them earlier, the Consumer Financial
Protection Bureau, interestingly enough, is about to propose a rule
that could make switching banks a whole lot easier. They
want banks to make it simpler for you to send
banking transaction data from one banker credit union to another,
because of course, that is the barrier that causes so
many people to stay put. And we'll let you know
(31:49):
if this proposal gets finalized, but this would be a
big win for consumers and hopefully a gargantuan loss for
the biggest banks who are banking pun intended matt on
inertia bias from you. That is actually what happens. Most
people stay put, not because they're in love with the
bank that they do business with, but just because they're like,
should I do I need to? I probably won't. I'm
gonna go play pickleball instead or whatever, you know, And
(32:10):
so it's I'm hoping that there's a system created that
makes it easy to funnel all your stuff to a
new bank, and that you're not having to manually input
all that data again and all your bill pay and
blah blah blah blah blah. That would make it a
lot simpler for folks. That's right, all right, bad news
for budgeters.
Speaker 2 (32:27):
The longest standing, most popular budgeting app out there. I
think they've got something like three point six million monthly
active users. It's going away. The folks over at into it.
They are shutting down Mint. They're Joel shedding a tear
over here.
Speaker 1 (32:42):
They're rolling someone. I mean, I've been using it for
ten plus years, man.
Speaker 2 (32:45):
Yeah, so some of the features evidently are going to
get rolled into one of their other assets, Credit Karma.
It seems like they're trying to create like a super app.
They're taking Elil Musk's wishes for X seriously because he's
trying to trying to make it the zuper app.
Speaker 1 (32:59):
Now it's going to be this Credit Karma X head
to head back.
Speaker 2 (33:01):
Yeah, so we'll see if this actually ends up panting out. Well,
but Mint is going to be a relic of the
past come January first, and if you are an avid
Mint user, then now is a good time to start
at least kicking the tires on some of the other
options out there. Why nab you need a budget that's
tops in our book, but there are plenty of others
out there. Folks in the how to Money Facebook group
(33:24):
have been sharing their favorite budgeting apps every Dollar, Tailler,
co Pilot. These are all fantastic options out there. Not
to mention, just straight up Microsoft Excel's That's what I've
been rolling for close to fifteen years right now. Excel sheets.
Those are of course all options as well. If you
want to do a more manual DIY budgeting.
Speaker 1 (33:42):
Approach, for sure. Yeah, but pour one out for my
homie Mint, because that's been a good service for a
long time and I don't to it gobbled.
Speaker 2 (33:49):
Them up and now they're putting it out to pasture.
Speaker 1 (33:51):
I feel like there was a little knife in the
back there from into it. But it's okay a And
I'm hoping that credit I love our credit carm al rdy. Yeah,
credit card is great, great site. So I'm hoping that
the credit Karma Mint combo mintifying credit Karma maybe maybe
does make it a one stop shop and a place
for me to turn for budgeting tracking and simultaneously knowing
more and seeing what's going on with my credit. But
(34:12):
we'll keep you up to speed on that and best
of luck finding a new budgeting app if you're a
Mint user. But Matt, that's gonna do it for this episode.
And well, by the way, I think we will kind
of put more information about that in our newsletter on Tuesday.
If you're not subscribed to the how to Money newsletter,
make sure you go do that. We'll have kind of
a roundup and descriptions of some of those budgeting apps
(34:33):
that you might be interested in, So check it out.
Speaker 2 (34:35):
You can go dig in on your own, or you
can head over to how to money dot com forard
slash newsletter. Make sure you are signed up and you
will have that information delivered directly to you. That's right,
all right. I mean, that'll be it for this episode
until next time. Best Friends Out, Best Friends Out, m
(35:01):
fol
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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