March 2, 2025 • 32 mins
Plus, should you DIY your own taxes? That depends on a few specific metrics that Matt and Joel share.
Ask HTM: Sarah wants to buy a home and is trying to figure out the best way to do that in the coming years.
A new report just came out highlighting the worst places to borrow money. Stay away from these debt purveyors!
Ask HTM: Can you check your credit score for free? (yes, but watch out for pitfalls)
Ask HTM: Sarah wants to buy a home and is trying to figure out the best way to do that in the coming years.
A new report just came out highlighting the worst places to borrow money. Stay away from these debt purveyors!
Ask HTM: Can you check your credit score for free? (yes, but watch out for pitfalls)
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Kf I am six point forty. You're listening to How
to Money on demand on the iHeartRadio app.
Speaker 2 (00:05):
Well, we're glad to have you along for the show today.
Speaker 1 (00:08):
By the way, if you're looking for the right credit
card for your wallet, well, you want to be able
to use it responsibly. But if you do that, if
you pay your credit card on time and in full
every single month, well check out our credit card tool.
You can find that up on the website at howtomoney
dot com.
Speaker 3 (00:23):
It is now time for the ludicrous headline of the week.
It's from c NETS. Headline reads is a tax prep
service promising you a huge tax refund? It could be
a scam, Joel. We're sharing this one because we want
folks to know that if you have a burning desire
to get a massive, huge tax refund, well, it can
interfere with your decision making skills. It can cause you
(00:45):
to fall prey to what's being called a ghost tax
Preparerah spooky yeah base it a friendly ghost like Casper
or unfriendly. So essentially, if a so called tax preparer
is highlighting how big of the refund they can help
you to get before knowing your specifics, the alarm bells
should be going off, because the way it works is
(01:05):
that individual is gonna then file your return with fake
deductions with credits that you don't actually qualify for, and
of course they're gonna then charge you based on a
percentage of your overall tax refund, so they are incentivized
to get as many deductions in there ass possible. It
raises how much you are going to then pay them,
but then your prepare disappears. You're left cleaning up the mess.
(01:29):
This is not the kind of situation you want to
find yourself in, and so if you want tax help,
we would recommend for you to ask around to friends,
ask for recommendations. Don't go rogue on such an important
hire like this as you're doing your own homework.
Speaker 2 (01:42):
Make sure that the.
Speaker 3 (01:43):
Tax prepaer has a Prepare tax identification number. If they're
trying to file your taxes, prepare your taxes without having that,
they're breaking the law. That's also another red flag. Make
sure that they've got a physical address as opposed to
just this.
Speaker 2 (01:57):
Oh, they've got a website.
Speaker 3 (01:58):
They seem totally legit, but it's pretty easy to up
and vanish in the middle of the night with a
website versus having a physical off as a physical location.
Speaker 1 (02:07):
And this is so nefarious, Matt, because so many people
they bank on that massive refund every year. And if
someone's kind of selling them a bill of goods like, hey,
we'll get you the bigger refund, like we have special
tactics to score you more money back.
Speaker 2 (02:21):
From the federal to leave money on the table.
Speaker 1 (02:23):
No, And that's so it sounds so promising, and you're like, well,
normally get like two grand, but this guy's saying I'm
gonna get like five or six. That is, you typically
want to walk down that road, except for in this
case it's totally false. You're going to be in hot
water with the irs, which brings up the perpetual point
of contention come tax season, should you go tax software
or should you hire a tax pro and Kiplinger they
(02:45):
did a great job covering this. They basically suggested that
software is great for folks who take the standard deduction,
who only earn income as a W two employee, and
who only invest in traditional assets like stocks, and also
for folks who have lived in one state for the
entire year. So if you moved, you might want to
hire somebody. So If that's you though, and you fall
(03:06):
into all those categories, use software like go with the
free or cheap options. Cash app in particular is still
our favorite because they're one hundred percent free for federal
infrastate filing.
Speaker 2 (03:18):
What it used to be called before cash At bought it,
it was credit credit carm a tax credit.
Speaker 1 (03:22):
Yeah, and then cash At bought it from them, and.
Speaker 2 (03:24):
It's continued to do an excellent job, an excellent.
Speaker 1 (03:26):
Job, and it's more robust than a lot of the
other free services, even the IRS Direct file service. But
let's say you don't meet all those requirements or are
you you know, you've got to come from another source
or you itemize your deductions, right, If you have more complexity,
it's often worth the cost to hire a pro as
long as they're not one of those ghost prepares that
I just talked about. And make sure they're a legit
(03:48):
tax prepare. They know what they're doing.
Speaker 3 (03:50):
So it's hard for me to hear you say ghosts
prepare it and not think of ghost peppers.
Speaker 2 (03:54):
Remember back when ghost peppers were all the rage? No,
when were they all the rage.
Speaker 3 (03:58):
Like fifteen years ago something like that. That's like when
all these like super Hot Peppers started ki, I hear
ghost prepare, I think ghost pepper. H huh, that's when that's
the first time ever heard of like the Skullville het
like that, which I know about.
Speaker 1 (04:10):
From Hot Ones, right, which I've never watched, actually never
seen a episode of Hot Ones.
Speaker 2 (04:15):
Yeah, I mean, okay, you got to watch the Conan
O'Brien episode. It's insane. That's funny. It's so funny. I guess, Okay,
sounds entertaining. I guess.
Speaker 3 (04:22):
I just think of folks who are like going after
the hottest pepper and it's like, oh, this one because
the ghost pepper used to be the hottest, and now
there's other hybrids that they've come out with, and it's like, well,
this one's got two million Skullville units or whatever. It's
just not something I'm interested in at some point. Humans, Uh,
why would you want to do that to?
Speaker 4 (04:37):
You?
Speaker 2 (04:38):
Just do it? And plus like it makes me think.
Speaker 1 (04:40):
About you want to eat like a mildly hot peppers.
All right, We've got more to get to on today's show.
Speaker 5 (04:47):
You're listening to How To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (04:54):
If you are over on Facebook and you want to
join a group of like minded folks who have money
questions and insight, Please go ahead and join the how
to Money Facebook group. All right, let's hear from a
listener who is thinking about purchasing her first home in
all the right ways.
Speaker 4 (05:09):
Hi, Matt Angel, this is Sarah from Brooklyn, New York.
My husband and I are exploring the best way to
invest our savings into real estate. While we know we
might not find exactly what we want right now, we're
approaching this potential purchase as both a future rental property
and a stepping stone to buying a larger condo in
three to five years. We currently rent a two bedroom,
two bath apartment with a private garden at fourteen percent
(05:31):
plow market rate. We have enough savings to cover a
twenty percent down payment, closing cost and three months of
expenses for either a one bedroom, one bath unit in
a more desirable location closer to Manhattan, or a two bedroom,
one bath condo in a developing neighborhood further out. Our
ultimate goal is to own a two bedroom, two bath
(05:52):
condo in a great area. We're open to making sacrifices,
whether that means buying in a developing location, downsizing to
a smaller unit, or waiting altogether. For context, we have
no debt. Our combined income is three hundred and eight thousand.
We invest in our four one ks. We both have
credit scores above eight hundred, and our savings is currently
(06:13):
in a high yield account. We truly love your show
and appreciate all the advice you've shared over the years.
Speaker 1 (06:18):
Thank you, Oh Matt, I love love the analytical approach
to buying real estate, right it can be such an
emotional purchase. But that's like one of the first suggestions
typically when you're going out to buy or to look
at a property is to not get emotionally attached, because
the person who gets emotionally attached to a piece of
(06:38):
real estate, to a particular house, is often going to
lose financial perspective. They might get out over their skis.
And you know, we don't always get what we want
with our first real estate purchase either, or at least
not all that we want. And I do think this
is going to sound weird, but I think settling for
less can be the best financial move that we could
possibly make. Thinking about the first part, like, even if
(07:00):
you're going to live in the home like an investor.
That can help people from a long term ownership perspective.
So I think sometimes people Matt, they've watched a little
too much HGTV, and so maybe their desires for what
that first home is going to look like actually outstrips
their budget. So I think some realism is important when
we're talking about buying real.
Speaker 3 (07:18):
Estate totally, and even though you might be quote unquote settling,
that doesn't mean you don't have a home right like
it will provide that initial purchase is going to give
you a roof over your head, but it will also
give you some options because as you live in it
and you pay down that mortgage, the equity that you're
building up, well, it can be used to aid your
down payment for that next house. But that being said,
we'd rather you buy a place that would make sense
(07:40):
as a rental when you're ready for the bigger, fancier condo.
And that means doing the hard work of saving up
another twenty percent down ideally for the next place, and
not rolling that equity over into the to the new house.
But the long term benefit of taking the you know,
it's sort of like a stepping stone approach to getting
the home that you ultimately want. I think it's going
to pay off in a significant way when we're talking
(08:01):
about wealth building, but we do want to challenge you.
It's because it did sound like she had a couple
options laid out before her, where it's like, well, we
could kind of go from this house and then we'll
get rid of that one and then we can get
the dream place, or maybe we'll hang onto it, and
we would absolutely challenge you to hang on to it
if at all possible.
Speaker 1 (08:17):
There's something so powerful about buying something that's that you
can easily afford, maintaining a much larger savings rate than
most of your peers would likely be able to have,
so that you can afford the thing you really want
later on down the line when some of your peers
are like maybe stuck in that first place that they
bought and they don't have the financial freedom.
Speaker 2 (08:36):
Makes me think even.
Speaker 1 (08:36):
About like a car purchase, Matt, like holding on to
my five Vacura means when I want to at some
point when the new Rivin R two comes out, I'm
going to be able to afford it because for so
many years you're going to plumb down cash for that
back I've had this like non existent car payment. I've
paid almost nothing for automobiles, and so then I'll be
able to pay a lot and guess what, I'll own
it free and clear, and i won't have any sort
(08:57):
of car payment attached to me, Whereas most people, if
they go for it too early, they got a car
payment that's no fun.
Speaker 2 (09:02):
Would you be embarrassed if we had matching Rivian's matching
ur twos? Are you doing it too?
Speaker 3 (09:06):
No?
Speaker 1 (09:06):
Okay, Well, I don't know if I'm going to either.
I might be too cheap and I might have just
other financial priorities. So we'll see if I actually do
it or not. But I think the good news for
Sarah here is she's already got so much money saved, right,
and her rent is below market level, which is a
meaningful thing in New York City. That's yeah, fourteen percent
below in New York City.
Speaker 3 (09:24):
That's like a unique advantage that they have many hundreds
of them, which tells me that they don't need to
be any sort of rush, you know, exactly like they
taking this chill.
Speaker 2 (09:31):
I think, yes, just keep having it out.
Speaker 1 (09:32):
I think if they're not interested in becoming a landlord
and they're wary of the substantial transaction costs that come
with buying and selling real estate, which everyone knows right
that that can be prohibitive. Keeping the bird in the
hand of the cheap apartment rent and continuing to save
that might be the even more beneficial move here. There's
(09:53):
just I don't think there's any rush to get into
something if you aren't planning on holding on to it
for more than five years.
Speaker 3 (09:59):
Yeah's that they've got a are they currently into two
to one that's got like a private garden, And I
kind of could imagine what that looked like, but I wasn't.
Speaker 2 (10:06):
Totally sure, so I googled it. Uh.
Speaker 3 (10:08):
I mean, it's not like she's living in whatever picture
I pulled up that happened to populate Google Images, But
did you play Sarah's apartment A private A private garden
apartment in New York City looks like the coolest thing ever, Like,
there's all these pictures of these awesome, these national spaces
in the back of an apartment. It's in the middle
of a city, but you kind of got like your
own tiny green space, green oasis with like, you know,
(10:29):
Japanese maple trees and lush bushes and a spot for
your dog to go to the bathroom. I guess as well,
if that's something that you're into. But yeah, like that
coupled with the fact that so you've got this amazing place,
but then also it's, uh, you're getting a lesson market rent.
Speaker 1 (10:44):
Man, I'd be hanging out there for as long as
I could. I think it's another option that should be considered.
And I think it's just important to note that it's
it's a gamble, right, the shorter your ownership timeline is
likely to be. But I think it's also you know,
Sarah sounds like she's keen to get on the property ladder.
She's willing to stay put a bit longer than she's
planned to if need be. And if that's the case,
(11:04):
you're probably in a position to buy. So this is
a chooser on a venture book Matt from the nineteen nineties.
Speaker 3 (11:10):
Totally Yeah, And I think not counting on appreciation is
important too, like making sure that you are going to
hang on to it for the long term, because it's
just a safer bet from okay, are we I can't
imagine that they would be underwater in that property. But
as we're talking about timing. It's worth thinking through not
just owning that property for at least five years, but
also living in it for two out of the past
(11:31):
five years.
Speaker 2 (11:32):
Because let's say they're like, Okay, let's we'll do it.
Speaker 3 (11:35):
Man, Ajo will say, we will buy that thing, will
hang on to it, we'll live in it. But let's
say they try out the whole landlording thing and they're like, man,
this really isn't for us. You do want to make
sure that you have lived in that thing for at
least two of the past five years, because if you
do want to unload the property you don't want to
be a landlord, Well, it needs to have been a
primary residence for you to avoid any capital gains tax
(11:55):
on that property as a couple well up two.
Speaker 2 (11:58):
Five hundred thousand dollars as married five jointly.
Speaker 3 (12:00):
So that's something else to keep in mind too, that
this is a great way to learn whether or not
you want to be a landlord without paying through the
nose in taxes for the privilege of learning that lesson.
Speaker 1 (12:13):
And one last thought here, Matt, it makes me think
for some reason of our buddy Carl, who does live
in flips, and maybe this is a chance for Sarah
to be able to get exactly what she wants by
buying one of the ugliest apartments on the block and
then forcing some appreciation, saying, actually, I can get that too, too,
kind of closer to the neighborhood I want, as long
as I buy like literally the ugliest one, and then
(12:35):
over time I'm making improvements to that place.
Speaker 2 (12:38):
So Sarah and her husband are handy. Yeah, that's what
you're saying.
Speaker 1 (12:41):
Yeah, I mean just the thought, because in real estate,
that's typically how you score a deal. If you buy
the one that's all join against and all that stuff,
you're paying somebody else for having a premium. Having done
that work, you're going to pay the premium. So at
least consider maybe doing some DIY renovations. And Sarah, the
truth is, you're hitting all the metrics. You have a
great income, your credit scores are fantastic, you're still funneling
(13:03):
money into retirement accounts, You've already sacrificed a lot to
build up that down payment, and you're willing to do more.
You're also like flexible on exactly where you end up,
although that is something I think more about too. Right,
I would personally rather have a smaller house than to
live in a less walkable location or someplace that was
going to mean a much longer commute. Not everybody feels
(13:24):
that way, but just make sure you've thought through that
as well before you start making offers.
Speaker 3 (13:28):
Although we'll say we're talking New York City or we're
talking to Manhattan and a small place versus a decent
sized place up there is a lot different, right, because
like if you're talking about extra hundred square feet, yeah, yes,
because like a one to one that you're sharing with
your husband, like that's tight, Like that is not a
whole lot of space.
Speaker 2 (13:44):
So I get the desire to have a two to two.
Speaker 3 (13:46):
It's not like we're telling you to find like a
two two mcmainsion, which sounds like an oxymoron.
Speaker 2 (13:51):
I don't think that actually exists.
Speaker 3 (13:53):
But if Sarah had said, hey, we're minimalists, we're not
planning to ever have kids, I think I might say, hey,
all right, well, if you find the place of your
dreams and it's a one to one and it's small,
but hey it's in Manhattan, I might say to go
for it. But what I heard her say was that
it's our dream to own a two to two. It
sounds like she's maybe more of a homebody it wants
to have the additional space. And oh and especially given
(14:17):
the fact that she's looking to she's like looking far
off down the road, it's sounded like she was considering
getting a nicer place into here now versus something that's
got that's up and coming, but that is a.
Speaker 2 (14:27):
Little bit bigger. I actually might do the opposite of
what you said.
Speaker 3 (14:29):
I think I would be willing Joel to go for
the place that's a little more up and coming. You
got the space, because you, I don't know, you can't
ever add more space when you're looking at apartments like
you are confined to the square footage that you have,
Like you can make it nicer, but you can't gain
more square footage. And to count on, you know, this
is the dangerous part. To count on some appreciation in
the neighborhood and hope for some to hope for yeah,
(14:51):
and just to And that's something that you can also
sort of force into the neighborhood by just like community events.
How involved are you in your neighbors lives, Like inviting
them over for drinks on the porch, like just different
things like that. That add to the overall vibe of
a building. I think that's something that you can participate in.
But I think about the first house that Kate and
I purchased, and it was like right on the edge
(15:12):
of what we felt was safe slash something that it's like, Okay,
we see some potential here, but let's go for it.
And for us, we ended up lucking out. Like anything
worse than that. I don't think we would have felt
comfortable from day one, but we said, hey, from day one,
it's probably only going to get better, and it totally did.
And that's it's somewhat speculative, like we're hoping and counting it,
(15:34):
but that's again something that we participated in.
Speaker 2 (15:36):
We had friends over, we met folks. You put roots down, you.
Speaker 1 (15:39):
Can see which dominoes are dropping in the real estate market,
and you can say, oh, this is here's the hot neighborhood.
Here's the neighborhood. That's two neighborhoods over from the hot neighborhood,
and you can kind of say, well.
Speaker 2 (15:48):
It's got good bones over there, people do some stuff.
The neighborhood's got good bones.
Speaker 3 (15:53):
Not the house, but like you see the possible future
and what life could look like in some of those
neighborhoods or in some of those buildings, And if you're
hanging onto it for the long haul, there's more upside
potential as well, because you are looking at that property
appreciating more over time, versus maybe purchasing it closer to
the top of what the market would support were you
to either sell or rent that property.
Speaker 2 (16:15):
You get to like.
Speaker 1 (16:16):
Experience the renaissance. You get to be a part of it,
which is kind of cool. Ride the wave a little bit.
Speaker 2 (16:21):
That's I don't know, that sounds like a lot of fun. Yeah, yeah,
for sure. All right, we've got actually more to get
to on today's show.
Speaker 5 (16:27):
You're listening to How To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 1 (16:34):
Don't forget to sign up for the how To Money newsletter.
You can find that up at how tomoney dot com
slash newsletter.
Speaker 3 (16:39):
Well, Joe, let's talk about debts, because we are not
debt enthusiasts, but we're also not debt haters.
Speaker 2 (16:46):
To the core.
Speaker 3 (16:47):
Some types of debt, when used wisely in moderation, we
think can help you to accelerate your different financial goals.
We're talking about things like a mortgage, maybe a small
amount of student loans to help you to get a degree,
but specific what you are borrowing for and the interest
rate attached to that loan are going to be crucial
factors when you're trying to decide whether that debt product
(17:08):
is bad, whether it's neutral, or whether it's you know,
a potentially decent investment. And a new report from Solo,
it's like a community finance platform, first name Han, but
they highlighted some of the worst places to borrow and
they're highlighting the negative impact of short term loans that
come with incredibly high fees with high interest rates, subprime
(17:29):
credit cards, payday loans, and earned wage access that's like
the different platforms and apps that allow you to get
paid early.
Speaker 2 (17:37):
They were some of the worst culprits out.
Speaker 3 (17:39):
There, and we totally one hundred percent agree those are
crappy products that should be avoided at all costs.
Speaker 1 (17:45):
Man, We've talked smack about every single one of those
at some point, we had them in the past, and yeah,
I think that earned wage access one matter, is particularly
nefarious because it looks so benevolent and those apps are
so good at marketing they're so slick, and people think
it looks like it's free. All I gotta do is
is leave them a little tip for the app creators.
(18:07):
And when you factor in how bad how rotten that
tip is from an interest rate standpoint, it's awful and
it's obliterating a reasonable chunk of your pay that you
shouldn't be forking over to somebody. There's no you don't
want to access your paycheck early because it's going to
cost you too much.
Speaker 3 (18:23):
It feels like a two point like a wolf payday
loan two point zero in cheap coding.
Speaker 1 (18:28):
Essentially, it's just a modern, slicker version of it that
looks less nefarious, but underneath the surface, it's rotten to
the core. They also mentioned in that report peer to
peer lending and buy now pay Later as some of
the places people turn when they're in a financial pinch, right,
and those forms of debt can charge you sky high
interest if you don't make your payments on time. So
for by now pay later, for instance, right, you might
(18:50):
find that the interest in fees are equivalent to a
forty five percent combined rate according to SOLO if you're
not making your payments on time, so the macroeconomic reality
is that borrowing costs are up on every debt vehicle
these days, right, making every single form of debt more precarious,
and the worst kinds of debt have become even even
worse right over the past couple of years. A whole
(19:13):
lot of Americans are attracted to these forms of debt
because they have no savings to pay for an emergency Matt.
I think that's that's why people fall for these traps.
They feel like they have no other recourse. That's why
we talk about the emergency fund twenty four hundred and
sixty seven dollars the bare minimum. Oh, you got to
hit that amount. That's crucial to help you avoid needing
(19:35):
to turn to one of these really crummy debt vehicles
that could essentially bend you over a barrel for months
or years to come.
Speaker 3 (19:42):
Yeah, okay, So you know I love numbers, Joel. I
love counching the numbers. And we've been saying the two
four hundred and sixty seven dollars amount for a while.
Speaker 1 (19:50):
Are you updating it for inflation? We have to agree
on this together. But doing a drum roll and a
big reveal, I.
Speaker 2 (19:56):
Just let me just talk through the numbers, because the
number numbers are fun.
Speaker 1 (19:59):
Raise your hand if you love me with everybody, numbers
like Shakira's hips don't lie.
Speaker 2 (20:04):
So that report was Shakira right.
Speaker 3 (20:06):
I don't know, I think so, But that was based
on research based back in twenty nineteen. Okay, twenty nineteen
is when we identified, oh, we need to start recommending
to everyone to have two thousand, four hundred and sixty
seven dollars set aside. Guess what the the total inflation
has what it's been since twenty nineteen.
Speaker 2 (20:23):
It's a total of and he guesses, uh, I'm gonna
go thirty two percent.
Speaker 3 (20:28):
Well, not quite that that high, twenty three point.
Speaker 2 (20:31):
Four five percent.
Speaker 3 (20:32):
So if you were to adjust two four hundred and
sixty seven dollars, if you were to update that to
take into account inflation since twenty nineteen, that means today
the new money gear number one initial emergency fund should
be three thousand and forty five dollars. Okay, three thousand
forty five.
Speaker 2 (20:50):
That's good. What do you think? Does that have a
good ring to it? It's Is it.
Speaker 3 (20:54):
As good as two thousand and sixty seven?
Speaker 2 (20:55):
It doesn't roll off the tongue as much but we
want to be accurate. Thirty forty five. Yeah, okay, that
sounds better. Yeah, I like that.
Speaker 3 (21:01):
Okay, all right, so maybe we will update the site
and start recommending for folks it's thirty forty five that
because that's a significantly larger amount of money than I mean,
this is solid more than five hundred bucks.
Speaker 2 (21:11):
So just something to keep in mind.
Speaker 3 (21:13):
Okay, we mentioned Doge last week and the implications of
Doge on the federal workforce. President Trump he has floated
the idea of sending a portion of the savings that
Doge claws back to Americans in the form of a
direct payment and a fe you've read any articles on this,
(21:33):
if you've seen this talked about, you've seen like a
five thousand dollars number pretty early on. And that kind
of reminds me of the early days of the stimu dollars.
Speaker 2 (21:41):
You know.
Speaker 3 (21:42):
Yeah, eyes get bigger, mouth starts watering a little bit.
You start thinking you're gonna see a direct deposit in
your account.
Speaker 1 (21:47):
Wait a second, how much am I getting? And you
kind of start pre spending it before it even drops. Unfortunately,
because the precedent has been set. But the way it
works is some of the savings from DOGE would help
to pay down the federal debt, while twenty percent could
evidently float to individuals. Sounds nice, but we don't want
folks to hold their breath. I think we are unlikely
to get a check for five thousand dollars in the
(22:10):
mailbox anytime soon. Oh yeah, I can't imagine what that
would do to inflation. And it just does not seem
very likely personally, right. No, It's it's one of those
things where people are gonna see headlines, they're gonna be like, cool,
where's my DOGE dividend, where's the check?
Speaker 2 (22:23):
When's it coming? And it's not. It's not coming. Like,
it's highly unlikely.
Speaker 3 (22:27):
I just don't see to be the bearer of bad news,
right right, Well, I just can't believe that they floated
this idea, that they stuck it out there without I mean,
it's just how the current administration works.
Speaker 2 (22:37):
They're just constantly throwing ideas out there.
Speaker 3 (22:39):
But when you know substance to back it up, when
you put something out there like this that folks are like,
that's something that they can wrap their heads around, that's
incredibly tangible. They've seen what that felt like in the past,
and if you don't deliver on that, folks are going
to be pissed.
Speaker 1 (22:51):
Honestly, it's kind of like the student loan forgiveness thing,
but I think this of this is actually being a
little bit worse because the student loan forgiveness thing was
they were attempting to do this, and there might be
illegal way to pull this off, but ultimately there were
a lot of disappointed student loan barers at the end
of the day because that promise didn't come to fulfillment.
This is another one of those things where it's a
promise that's not going to happen, and that's because five
(23:13):
thousand dollars per household. Well that's the estimate based on
DOGE cutting two trillion dollars in federal spending. There's zero
sign that DOGE is going to find a way to
slash government spending anywhere near that level. Not that there
won't be some spending cuts around the margins that could
shrink the size of government a bit, but as we
said last week, entitlement programs would have to be significantly
(23:34):
altered in order to realize savings of that magnitude. Those
make up two thirds of the roughly seven trillion dollar budget,
and there's just no political will to touch those programs
in the slightest Like the President has basically said, we
aren't going to cut back in any way, form or
fashion on those entitlement programs.
Speaker 2 (23:51):
They campaign on that. So I think a five.
Speaker 1 (23:53):
Hundred dollars check, much less a five thousand dollars check,
is a pipe dream. Just don't read that headline and
assume that government money is heading your way soon.
Speaker 2 (24:01):
Yeah, that's right.
Speaker 5 (24:02):
You're listening to how to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (24:09):
If you have a money question, we'll send it our way.
All you have to do is record your question on
the voice memo app there on your phone and send
it over via email. You can find the simple instructions
at how toomoney dot com, forward slash ask. It is
now time for the Facebook Question of the Week, which
is from Anissa.
Speaker 2 (24:25):
She writes, I thought.
Speaker 3 (24:26):
You could check your credit score for free by going
directly to the three sites. I am on Equifax's page
and it lists prices. I don't see anywhere on the
site where it says free. Please show me how to
navigate this particular site to obtain my free score.
Speaker 2 (24:40):
What am I missing? Oh? What's you think, Joel?
Speaker 1 (24:43):
I hate to be the bear of bad news on
this one, Matt. But in the credit bureaus, they're not
down with offering free scores. I don't know if you
remember this, probably like fifteen years ago, maybe there was
a free credit Reporter or free credit score dot com,
and the credit bureaus were coming up with all all
these websites to try to entice you to come directly
(25:03):
to them.
Speaker 2 (25:04):
To get your credit score, to trick you.
Speaker 1 (25:06):
But they were trying to trick you, and so yeah,
maybe it was free for like a week or something
like that, but then they wanted to you to fork
over fifteen twenty bucks a month or something like that
for all these insights into your credit score. This became
a profit center for them, and what they prefer to
do still to this day is to confuse you and
to profit off of you as much as possible. And
at the same time, when it comes to actually providing
(25:28):
you service if there's an issue, they're not going to
do that. So they're never gonna, let's say, respond to
complaints about errors that you might have found and that
you've made them aware of there's still a lot of
reports would suggest somewhere between one and four and one
in five Americans has an error on their credit report
that has not been removed, that has not been made right.
So Anissa, I just say this to begin with, you're
(25:50):
looking in the wrong place. The only reason to go
to the website of an individual bureau is to freeze
or thaw your credit report. Other than that, stay away,
do not go looking for your credit score from those guys.
Speaker 2 (26:01):
Totally.
Speaker 3 (26:01):
Yeah, And you said freeze, which is important because they have,
like all the bureaus have a credit lock feature.
Speaker 2 (26:07):
Right, we're not talking about freezing.
Speaker 3 (26:09):
They offer locking abilities as well, and they're going to
try to charge you for something that's already available for free.
Speaker 2 (26:16):
And plus their.
Speaker 3 (26:17):
Product is kind of worse when it comes to the
ability to get in there and to monitor your credit,
but they're marketing it's going to make it sound superior. Well,
and of course they're going to prioritize some of the
different plans that they offer that have credit monitoring and
just some of these other.
Speaker 2 (26:30):
Faux services that they offer.
Speaker 3 (26:32):
But the cool thing is getting your credit score for
free is possible, and the place to turn is typically
just to your credit card company. Almost everyone listening here
they have a credit card, and the different companies have
their own sort of credit score products. I'm thinking of
Capital One. Theirs is called credit Wise. Discover has a
free credit score that updates monthly as well AMEX like
literally all the credit cards, and it's one of the
(26:53):
best ways these days to monitor your actual score for free.
Typically you're logging in there anyway. There's no need then
to register your account with Equifax or Experience or whoever
or TransUnion in order to try to get your free
score over there.
Speaker 2 (27:09):
And if you want to.
Speaker 3 (27:10):
Look at your detailed report, well that can actually be
had for free at annual credit report dot com, which
is actually still available for free weekly. That's something they
started offering during the pandemic when it seems like the
world was going to end.
Speaker 1 (27:23):
So that is what they've maintained. That is the report
that's available, not the score score. So if you want
the score, you got to go elsewhere, and you're right
at the credit card companies do a great job on
that front. I still remember, do you remember the bank
Washington Mutual that was WAMU. Yeah, that was one of
my first bank accounts.
Speaker 2 (27:38):
And they're still around, right they got the Ostrich No,
they're gone. The guy with a mustache, No.
Speaker 3 (27:42):
That's uh, what am I thinking of? That's Liberty, Yeah,
Liberty Mutual. That's okay, that's insurance. So Washingt Mutual.
Speaker 2 (27:47):
No, they went.
Speaker 1 (27:48):
They went bust in the Great Recession. But when I
had part of the reason I got my bank account
with them was because at the time, it was they
were essentially the only place where you could get your
credit score for free once a month, and I was
nerdying into personal finance as a twenty two year old
or something like that, and so I was like, cool,
(28:09):
I'm going to go with that account. But now the
cat's kind of out of the bag. The credit score
is not nearly as hidden as it used to be.
All the credit card companies offer something like that, or
most of them. Also, I would say, Anissa, check out
credit Karma. You'll get to see two scores for free.
One is from TransUnion and one is from Equifax. You
mentioned Equifax in your question, so if you want to
see your Equfax score, that's a good place to get it.
(28:30):
That gives you a pretty good idea of where your
credit score stands. By being able to see both of
those scores. Credit Karma will try and sell you a
bunch of other financial products, including new credit cards or
maybe even auto loans. Avoid those if you're not interested,
but it's a solid site for digging into what's going
on with your credit score. I like their credit health
section because it can help you see where you need
(28:50):
to improve, so it's not just the score, but then
it's like, hey, here's why your score isn't as good
as you want it to be, and here's where you
can make improvements, Like if you're using too much of
your available credit, or if you're making too many inquiries
or something like that. They will make you aware of
that and so then you can maybe correct your course
so that you can improve the score.
Speaker 2 (29:10):
Well.
Speaker 3 (29:10):
Even a lot of the credit card companies are actually
offering that yeah now as well, And I think if
you dig deep enough that the credit bureaus will they
do the same thing. But we're just gonna not steer
you towards them because of the fact that they oftentimes
just do such a terrible job at the one thing
that they're supposed to do a good job at.
Speaker 2 (29:25):
And is it because of that?
Speaker 3 (29:26):
I don't want to reward them with any other clicks.
Speaker 2 (29:28):
And indeed, let's get to one more Joel from Courtney.
Speaker 3 (29:34):
She said, what's the instacart hack that Joel was talking
about for Costco? Literally just less impulse purchases by using
Instacart Or.
Speaker 2 (29:40):
Is there something else I'm missing? Joel? What's the going
to share your Instacart hack?
Speaker 1 (29:44):
I will say this, that's not something I had thought
about that much, the fewer impulse purchases, but it's totally true.
Speaker 2 (29:50):
Or do we not talk about that well? Because if
you go, it's true, it's true how we did well.
Speaker 1 (29:53):
Maybe we did, but it's something I had not thought
through a lot, Like when you guys.
Speaker 2 (29:56):
Were looking for an easy way to get your Afsea
bites or whatever it is.
Speaker 1 (30:01):
I just like straight up discounts and not having to
go grocery shopping or and having someone else do it
for me if it's not going to cost me an
arm and a leg. And that was my initial aversion
to Instacart, or to buying groceries online.
Speaker 2 (30:13):
Pay premium, you.
Speaker 1 (30:13):
Pay the premium, you pay more than what you pay
in the store, and then on top of that you
got to pay the tip, the Instacart fee all all
that stuff, and so I was like, no, I'm not
into it. I would rather get my groceries as cheaply
as possible. But Costco sells one hundred dollars INSTACR gift
cards for eighty bucks, which is like a ridiculously sweet discount.
Speaker 2 (30:35):
So by my calculations, that's twenty percent of it is.
Speaker 1 (30:38):
And you can get those gift cards online or in store.
If you get them online, you can only buy two
every two weeks. If you buy them in store, you
can buy two every time you go in. Some people
have said you can buy two, walk out, go back in,
buy two more. I haven't tried that yet, although I'm
sure you can, especially if you go see a different
person at checkout. But I don't even think they would
(30:58):
give you put something lasses on exactly, or a mustache mustash.
But so what's so great about it, too, is that
you can use Costco's same day service costco dot Com
click the same Day and you can buy your groceries there.
The markup, Matt, I haven't done the math exactly, but
I'm pretty sure the markup is somewhere between nine and
eleven percent on most of the groceries. So you're getting
(31:20):
that twenty percent discount, you paid the nine to eleven
percent markup, then you got to pay the tip to
the chopper on top of that, but you still come
out I would say, even if not a little bit
ahead and you avoided the Impulse buys. Show me your
math and it's true. I'm telling you, man, go look
go look I have. And then I looked on Reddit
to see what other people saying, and they were agreeing
(31:41):
with me that it is somewhere in that range. But yeah,
so this is what it's saving me multiple hours a
week of grocery shopping, which is nice. And even if
you just kind of need to make a quick order
or something like that, it's not as frustrating because you
know the pricing and you know you got a discount
on that gift card. So I think for a lot
of people out there who are like I wanted to
try instackart, but I too am too frugal to go
(32:01):
in that direction. If you like Costco, the instacart hack
at Costco makes a lot of sense.
Speaker 2 (32:05):
I love it.
Speaker 1 (32:06):
Thank you as always for listening to the show. We
appreciate your time and attention. You can always find more
money saving information up on our website at howtomoney dot com.
Speaker 2 (32:15):
We'll see you back here next week.
Speaker 1 (32:17):
You've been listening to How to Money with Joel Larsgard.
You can always hear us live on KFI Am six
forty twelve pm to two pm on Sunday, and anytime
on demand on the iHeartRadio app
Kf I am six point forty. You're listening to How
to Money on demand on the iHeartRadio app.
Speaker 2 (00:05):
Well, we're glad to have you along for the show today.
Speaker 1 (00:08):
By the way, if you're looking for the right credit
card for your wallet, well, you want to be able
to use it responsibly. But if you do that, if
you pay your credit card on time and in full
every single month, well check out our credit card tool.
You can find that up on the website at howtomoney
dot com.
Speaker 3 (00:23):
It is now time for the ludicrous headline of the week.
It's from c NETS. Headline reads is a tax prep
service promising you a huge tax refund? It could be
a scam, Joel. We're sharing this one because we want
folks to know that if you have a burning desire
to get a massive, huge tax refund, well, it can
interfere with your decision making skills. It can cause you
(00:45):
to fall prey to what's being called a ghost tax
Preparerah spooky yeah base it a friendly ghost like Casper
or unfriendly. So essentially, if a so called tax preparer
is highlighting how big of the refund they can help
you to get before knowing your specifics, the alarm bells
should be going off, because the way it works is
(01:05):
that individual is gonna then file your return with fake
deductions with credits that you don't actually qualify for, and
of course they're gonna then charge you based on a
percentage of your overall tax refund, so they are incentivized
to get as many deductions in there ass possible. It
raises how much you are going to then pay them,
but then your prepare disappears. You're left cleaning up the mess.
(01:29):
This is not the kind of situation you want to
find yourself in, and so if you want tax help,
we would recommend for you to ask around to friends,
ask for recommendations. Don't go rogue on such an important
hire like this as you're doing your own homework.
Speaker 2 (01:42):
Make sure that the.
Speaker 3 (01:43):
Tax prepaer has a Prepare tax identification number. If they're
trying to file your taxes, prepare your taxes without having that,
they're breaking the law. That's also another red flag. Make
sure that they've got a physical address as opposed to
just this.
Speaker 2 (01:57):
Oh, they've got a website.
Speaker 3 (01:58):
They seem totally legit, but it's pretty easy to up
and vanish in the middle of the night with a
website versus having a physical off as a physical location.
Speaker 1 (02:07):
And this is so nefarious, Matt, because so many people
they bank on that massive refund every year. And if
someone's kind of selling them a bill of goods like, hey,
we'll get you the bigger refund, like we have special
tactics to score you more money back.
Speaker 2 (02:21):
From the federal to leave money on the table.
Speaker 1 (02:23):
No, And that's so it sounds so promising, and you're like, well,
normally get like two grand, but this guy's saying I'm
gonna get like five or six. That is, you typically
want to walk down that road, except for in this
case it's totally false. You're going to be in hot
water with the irs, which brings up the perpetual point
of contention come tax season, should you go tax software
or should you hire a tax pro and Kiplinger they
(02:45):
did a great job covering this. They basically suggested that
software is great for folks who take the standard deduction,
who only earn income as a W two employee, and
who only invest in traditional assets like stocks, and also
for folks who have lived in one state for the
entire year. So if you moved, you might want to
hire somebody. So If that's you though, and you fall
(03:06):
into all those categories, use software like go with the
free or cheap options. Cash app in particular is still
our favorite because they're one hundred percent free for federal
infrastate filing.
Speaker 2 (03:18):
What it used to be called before cash At bought it,
it was credit credit carm a tax credit.
Speaker 1 (03:22):
Yeah, and then cash At bought it from them, and.
Speaker 2 (03:24):
It's continued to do an excellent job, an excellent.
Speaker 1 (03:26):
Job, and it's more robust than a lot of the
other free services, even the IRS Direct file service. But
let's say you don't meet all those requirements or are
you you know, you've got to come from another source
or you itemize your deductions, right, If you have more complexity,
it's often worth the cost to hire a pro as
long as they're not one of those ghost prepares that
I just talked about. And make sure they're a legit
(03:48):
tax prepare. They know what they're doing.
Speaker 3 (03:50):
So it's hard for me to hear you say ghosts
prepare it and not think of ghost peppers.
Speaker 2 (03:54):
Remember back when ghost peppers were all the rage? No,
when were they all the rage.
Speaker 3 (03:58):
Like fifteen years ago something like that. That's like when
all these like super Hot Peppers started ki, I hear
ghost prepare, I think ghost pepper. H huh, that's when that's
the first time ever heard of like the Skullville het
like that, which I know about.
Speaker 1 (04:10):
From Hot Ones, right, which I've never watched, actually never
seen a episode of Hot Ones.
Speaker 2 (04:15):
Yeah, I mean, okay, you got to watch the Conan
O'Brien episode. It's insane. That's funny. It's so funny. I guess, Okay,
sounds entertaining. I guess.
Speaker 3 (04:22):
I just think of folks who are like going after
the hottest pepper and it's like, oh, this one because
the ghost pepper used to be the hottest, and now
there's other hybrids that they've come out with, and it's like, well,
this one's got two million Skullville units or whatever. It's
just not something I'm interested in at some point. Humans, Uh,
why would you want to do that to?
Speaker 4 (04:37):
You?
Speaker 2 (04:38):
Just do it? And plus like it makes me think.
Speaker 1 (04:40):
About you want to eat like a mildly hot peppers.
All right, We've got more to get to on today's show.
Speaker 5 (04:47):
You're listening to How To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (04:54):
If you are over on Facebook and you want to
join a group of like minded folks who have money
questions and insight, Please go ahead and join the how
to Money Facebook group. All right, let's hear from a
listener who is thinking about purchasing her first home in
all the right ways.
Speaker 4 (05:09):
Hi, Matt Angel, this is Sarah from Brooklyn, New York.
My husband and I are exploring the best way to
invest our savings into real estate. While we know we
might not find exactly what we want right now, we're
approaching this potential purchase as both a future rental property
and a stepping stone to buying a larger condo in
three to five years. We currently rent a two bedroom,
two bath apartment with a private garden at fourteen percent
(05:31):
plow market rate. We have enough savings to cover a
twenty percent down payment, closing cost and three months of
expenses for either a one bedroom, one bath unit in
a more desirable location closer to Manhattan, or a two bedroom,
one bath condo in a developing neighborhood further out. Our
ultimate goal is to own a two bedroom, two bath
(05:52):
condo in a great area. We're open to making sacrifices,
whether that means buying in a developing location, downsizing to
a smaller unit, or waiting altogether. For context, we have
no debt. Our combined income is three hundred and eight thousand.
We invest in our four one ks. We both have
credit scores above eight hundred, and our savings is currently
(06:13):
in a high yield account. We truly love your show
and appreciate all the advice you've shared over the years.
Speaker 1 (06:18):
Thank you, Oh Matt, I love love the analytical approach
to buying real estate, right it can be such an
emotional purchase. But that's like one of the first suggestions
typically when you're going out to buy or to look
at a property is to not get emotionally attached, because
the person who gets emotionally attached to a piece of
(06:38):
real estate, to a particular house, is often going to
lose financial perspective. They might get out over their skis.
And you know, we don't always get what we want
with our first real estate purchase either, or at least
not all that we want. And I do think this
is going to sound weird, but I think settling for
less can be the best financial move that we could
possibly make. Thinking about the first part, like, even if
(07:00):
you're going to live in the home like an investor.
That can help people from a long term ownership perspective.
So I think sometimes people Matt, they've watched a little
too much HGTV, and so maybe their desires for what
that first home is going to look like actually outstrips
their budget. So I think some realism is important when
we're talking about buying real.
Speaker 3 (07:18):
Estate totally, and even though you might be quote unquote settling,
that doesn't mean you don't have a home right like
it will provide that initial purchase is going to give
you a roof over your head, but it will also
give you some options because as you live in it
and you pay down that mortgage, the equity that you're
building up, well, it can be used to aid your
down payment for that next house. But that being said,
we'd rather you buy a place that would make sense
(07:40):
as a rental when you're ready for the bigger, fancier condo.
And that means doing the hard work of saving up
another twenty percent down ideally for the next place, and
not rolling that equity over into the to the new house.
But the long term benefit of taking the you know,
it's sort of like a stepping stone approach to getting
the home that you ultimately want. I think it's going
to pay off in a significant way when we're talking
(08:01):
about wealth building, but we do want to challenge you.
It's because it did sound like she had a couple
options laid out before her, where it's like, well, we
could kind of go from this house and then we'll
get rid of that one and then we can get
the dream place, or maybe we'll hang onto it, and
we would absolutely challenge you to hang on to it
if at all possible.
Speaker 1 (08:17):
There's something so powerful about buying something that's that you
can easily afford, maintaining a much larger savings rate than
most of your peers would likely be able to have,
so that you can afford the thing you really want
later on down the line when some of your peers
are like maybe stuck in that first place that they
bought and they don't have the financial freedom.
Speaker 2 (08:36):
Makes me think even.
Speaker 1 (08:36):
About like a car purchase, Matt, like holding on to
my five Vacura means when I want to at some
point when the new Rivin R two comes out, I'm
going to be able to afford it because for so
many years you're going to plumb down cash for that
back I've had this like non existent car payment. I've
paid almost nothing for automobiles, and so then I'll be
able to pay a lot and guess what, I'll own
it free and clear, and i won't have any sort
(08:57):
of car payment attached to me, Whereas most people, if
they go for it too early, they got a car
payment that's no fun.
Speaker 2 (09:02):
Would you be embarrassed if we had matching Rivian's matching
ur twos? Are you doing it too?
Speaker 3 (09:06):
No?
Speaker 1 (09:06):
Okay, Well, I don't know if I'm going to either.
I might be too cheap and I might have just
other financial priorities. So we'll see if I actually do
it or not. But I think the good news for
Sarah here is she's already got so much money saved, right,
and her rent is below market level, which is a
meaningful thing in New York City. That's yeah, fourteen percent
below in New York City.
Speaker 3 (09:24):
That's like a unique advantage that they have many hundreds
of them, which tells me that they don't need to
be any sort of rush, you know, exactly like they
taking this chill.
Speaker 2 (09:31):
I think, yes, just keep having it out.
Speaker 1 (09:32):
I think if they're not interested in becoming a landlord
and they're wary of the substantial transaction costs that come
with buying and selling real estate, which everyone knows right
that that can be prohibitive. Keeping the bird in the
hand of the cheap apartment rent and continuing to save
that might be the even more beneficial move here. There's
(09:53):
just I don't think there's any rush to get into
something if you aren't planning on holding on to it
for more than five years.
Speaker 3 (09:59):
Yeah's that they've got a are they currently into two
to one that's got like a private garden, And I
kind of could imagine what that looked like, but I wasn't.
Speaker 2 (10:06):
Totally sure, so I googled it. Uh.
Speaker 3 (10:08):
I mean, it's not like she's living in whatever picture
I pulled up that happened to populate Google Images, But
did you play Sarah's apartment A private A private garden
apartment in New York City looks like the coolest thing ever, Like,
there's all these pictures of these awesome, these national spaces
in the back of an apartment. It's in the middle
of a city, but you kind of got like your
own tiny green space, green oasis with like, you know,
(10:29):
Japanese maple trees and lush bushes and a spot for
your dog to go to the bathroom. I guess as well,
if that's something that you're into. But yeah, like that
coupled with the fact that so you've got this amazing place,
but then also it's, uh, you're getting a lesson market rent.
Speaker 1 (10:44):
Man, I'd be hanging out there for as long as
I could. I think it's another option that should be considered.
And I think it's just important to note that it's
it's a gamble, right, the shorter your ownership timeline is
likely to be. But I think it's also you know,
Sarah sounds like she's keen to get on the property ladder.
She's willing to stay put a bit longer than she's
planned to if need be. And if that's the case,
(11:04):
you're probably in a position to buy. So this is
a chooser on a venture book Matt from the nineteen nineties.
Speaker 3 (11:10):
Totally Yeah, And I think not counting on appreciation is
important too, like making sure that you are going to
hang on to it for the long term, because it's
just a safer bet from okay, are we I can't
imagine that they would be underwater in that property. But
as we're talking about timing. It's worth thinking through not
just owning that property for at least five years, but
also living in it for two out of the past
(11:31):
five years.
Speaker 2 (11:32):
Because let's say they're like, Okay, let's we'll do it.
Speaker 3 (11:35):
Man, Ajo will say, we will buy that thing, will
hang on to it, we'll live in it. But let's
say they try out the whole landlording thing and they're like, man,
this really isn't for us. You do want to make
sure that you have lived in that thing for at
least two of the past five years, because if you
do want to unload the property you don't want to
be a landlord, Well, it needs to have been a
primary residence for you to avoid any capital gains tax
(11:55):
on that property as a couple well up two.
Speaker 2 (11:58):
Five hundred thousand dollars as married five jointly.
Speaker 3 (12:00):
So that's something else to keep in mind too, that
this is a great way to learn whether or not
you want to be a landlord without paying through the
nose in taxes for the privilege of learning that lesson.
Speaker 1 (12:13):
And one last thought here, Matt, it makes me think
for some reason of our buddy Carl, who does live
in flips, and maybe this is a chance for Sarah
to be able to get exactly what she wants by
buying one of the ugliest apartments on the block and
then forcing some appreciation, saying, actually, I can get that too, too,
kind of closer to the neighborhood I want, as long
as I buy like literally the ugliest one, and then
(12:35):
over time I'm making improvements to that place.
Speaker 2 (12:38):
So Sarah and her husband are handy. Yeah, that's what
you're saying.
Speaker 1 (12:41):
Yeah, I mean just the thought, because in real estate,
that's typically how you score a deal. If you buy
the one that's all join against and all that stuff,
you're paying somebody else for having a premium. Having done
that work, you're going to pay the premium. So at
least consider maybe doing some DIY renovations. And Sarah, the
truth is, you're hitting all the metrics. You have a
great income, your credit scores are fantastic, you're still funneling
(13:03):
money into retirement accounts, You've already sacrificed a lot to
build up that down payment, and you're willing to do more.
You're also like flexible on exactly where you end up,
although that is something I think more about too. Right,
I would personally rather have a smaller house than to
live in a less walkable location or someplace that was
going to mean a much longer commute. Not everybody feels
(13:24):
that way, but just make sure you've thought through that
as well before you start making offers.
Speaker 3 (13:28):
Although we'll say we're talking New York City or we're
talking to Manhattan and a small place versus a decent
sized place up there is a lot different, right, because
like if you're talking about extra hundred square feet, yeah, yes,
because like a one to one that you're sharing with
your husband, like that's tight, Like that is not a
whole lot of space.
Speaker 2 (13:44):
So I get the desire to have a two to two.
Speaker 3 (13:46):
It's not like we're telling you to find like a
two two mcmainsion, which sounds like an oxymoron.
Speaker 2 (13:51):
I don't think that actually exists.
Speaker 3 (13:53):
But if Sarah had said, hey, we're minimalists, we're not
planning to ever have kids, I think I might say, hey,
all right, well, if you find the place of your
dreams and it's a one to one and it's small,
but hey it's in Manhattan, I might say to go
for it. But what I heard her say was that
it's our dream to own a two to two. It
sounds like she's maybe more of a homebody it wants
to have the additional space. And oh and especially given
(14:17):
the fact that she's looking to she's like looking far
off down the road, it's sounded like she was considering
getting a nicer place into here now versus something that's
got that's up and coming, but that is a.
Speaker 2 (14:27):
Little bit bigger. I actually might do the opposite of
what you said.
Speaker 3 (14:29):
I think I would be willing Joel to go for
the place that's a little more up and coming. You
got the space, because you, I don't know, you can't
ever add more space when you're looking at apartments like
you are confined to the square footage that you have,
Like you can make it nicer, but you can't gain
more square footage. And to count on, you know, this
is the dangerous part. To count on some appreciation in
the neighborhood and hope for some to hope for yeah,
(14:51):
and just to And that's something that you can also
sort of force into the neighborhood by just like community events.
How involved are you in your neighbors lives, Like inviting
them over for drinks on the porch, like just different
things like that. That add to the overall vibe of
a building. I think that's something that you can participate in.
But I think about the first house that Kate and
I purchased, and it was like right on the edge
(15:12):
of what we felt was safe slash something that it's like, Okay,
we see some potential here, but let's go for it.
And for us, we ended up lucking out. Like anything
worse than that. I don't think we would have felt
comfortable from day one, but we said, hey, from day one,
it's probably only going to get better, and it totally did.
And that's it's somewhat speculative, like we're hoping and counting it,
(15:34):
but that's again something that we participated in.
Speaker 2 (15:36):
We had friends over, we met folks. You put roots down, you.
Speaker 1 (15:39):
Can see which dominoes are dropping in the real estate market,
and you can say, oh, this is here's the hot neighborhood.
Here's the neighborhood. That's two neighborhoods over from the hot neighborhood,
and you can kind of say, well.
Speaker 2 (15:48):
It's got good bones over there, people do some stuff.
The neighborhood's got good bones.
Speaker 3 (15:53):
Not the house, but like you see the possible future
and what life could look like in some of those
neighborhoods or in some of those buildings, And if you're
hanging onto it for the long haul, there's more upside
potential as well, because you are looking at that property
appreciating more over time, versus maybe purchasing it closer to
the top of what the market would support were you
to either sell or rent that property.
Speaker 2 (16:15):
You get to like.
Speaker 1 (16:16):
Experience the renaissance. You get to be a part of it,
which is kind of cool. Ride the wave a little bit.
Speaker 2 (16:21):
That's I don't know, that sounds like a lot of fun. Yeah, yeah,
for sure. All right, we've got actually more to get
to on today's show.
Speaker 5 (16:27):
You're listening to How To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 1 (16:34):
Don't forget to sign up for the how To Money newsletter.
You can find that up at how tomoney dot com
slash newsletter.
Speaker 3 (16:39):
Well, Joe, let's talk about debts, because we are not
debt enthusiasts, but we're also not debt haters.
Speaker 2 (16:46):
To the core.
Speaker 3 (16:47):
Some types of debt, when used wisely in moderation, we
think can help you to accelerate your different financial goals.
We're talking about things like a mortgage, maybe a small
amount of student loans to help you to get a degree,
but specific what you are borrowing for and the interest
rate attached to that loan are going to be crucial
factors when you're trying to decide whether that debt product
(17:08):
is bad, whether it's neutral, or whether it's you know,
a potentially decent investment. And a new report from Solo,
it's like a community finance platform, first name Han, but
they highlighted some of the worst places to borrow and
they're highlighting the negative impact of short term loans that
come with incredibly high fees with high interest rates, subprime
(17:29):
credit cards, payday loans, and earned wage access that's like
the different platforms and apps that allow you to get
paid early.
Speaker 2 (17:37):
They were some of the worst culprits out.
Speaker 3 (17:39):
There, and we totally one hundred percent agree those are
crappy products that should be avoided at all costs.
Speaker 1 (17:45):
Man, We've talked smack about every single one of those
at some point, we had them in the past, and yeah,
I think that earned wage access one matter, is particularly
nefarious because it looks so benevolent and those apps are
so good at marketing they're so slick, and people think
it looks like it's free. All I gotta do is
is leave them a little tip for the app creators.
(18:07):
And when you factor in how bad how rotten that
tip is from an interest rate standpoint, it's awful and
it's obliterating a reasonable chunk of your pay that you
shouldn't be forking over to somebody. There's no you don't
want to access your paycheck early because it's going to
cost you too much.
Speaker 3 (18:23):
It feels like a two point like a wolf payday
loan two point zero in cheap coding.
Speaker 1 (18:28):
Essentially, it's just a modern, slicker version of it that
looks less nefarious, but underneath the surface, it's rotten to
the core. They also mentioned in that report peer to
peer lending and buy now pay Later as some of
the places people turn when they're in a financial pinch, right,
and those forms of debt can charge you sky high
interest if you don't make your payments on time. So
for by now pay later, for instance, right, you might
(18:50):
find that the interest in fees are equivalent to a
forty five percent combined rate according to SOLO if you're
not making your payments on time, so the macroeconomic reality
is that borrowing costs are up on every debt vehicle
these days, right, making every single form of debt more precarious,
and the worst kinds of debt have become even even
worse right over the past couple of years. A whole
(19:13):
lot of Americans are attracted to these forms of debt
because they have no savings to pay for an emergency Matt.
I think that's that's why people fall for these traps.
They feel like they have no other recourse. That's why
we talk about the emergency fund twenty four hundred and
sixty seven dollars the bare minimum. Oh, you got to
hit that amount. That's crucial to help you avoid needing
(19:35):
to turn to one of these really crummy debt vehicles
that could essentially bend you over a barrel for months
or years to come.
Speaker 3 (19:42):
Yeah, okay, So you know I love numbers, Joel. I
love counching the numbers. And we've been saying the two
four hundred and sixty seven dollars amount for a while.
Speaker 1 (19:50):
Are you updating it for inflation? We have to agree
on this together. But doing a drum roll and a
big reveal, I.
Speaker 2 (19:56):
Just let me just talk through the numbers, because the
number numbers are fun.
Speaker 1 (19:59):
Raise your hand if you love me with everybody, numbers
like Shakira's hips don't lie.
Speaker 2 (20:04):
So that report was Shakira right.
Speaker 3 (20:06):
I don't know, I think so, But that was based
on research based back in twenty nineteen. Okay, twenty nineteen
is when we identified, oh, we need to start recommending
to everyone to have two thousand, four hundred and sixty
seven dollars set aside. Guess what the the total inflation
has what it's been since twenty nineteen.
Speaker 2 (20:23):
It's a total of and he guesses, uh, I'm gonna
go thirty two percent.
Speaker 3 (20:28):
Well, not quite that that high, twenty three point.
Speaker 2 (20:31):
Four five percent.
Speaker 3 (20:32):
So if you were to adjust two four hundred and
sixty seven dollars, if you were to update that to
take into account inflation since twenty nineteen, that means today
the new money gear number one initial emergency fund should
be three thousand and forty five dollars. Okay, three thousand
forty five.
Speaker 2 (20:50):
That's good. What do you think? Does that have a
good ring to it? It's Is it.
Speaker 3 (20:54):
As good as two thousand and sixty seven?
Speaker 2 (20:55):
It doesn't roll off the tongue as much but we
want to be accurate. Thirty forty five. Yeah, okay, that
sounds better. Yeah, I like that.
Speaker 3 (21:01):
Okay, all right, so maybe we will update the site
and start recommending for folks it's thirty forty five that
because that's a significantly larger amount of money than I mean,
this is solid more than five hundred bucks.
Speaker 2 (21:11):
So just something to keep in mind.
Speaker 3 (21:13):
Okay, we mentioned Doge last week and the implications of
Doge on the federal workforce. President Trump he has floated
the idea of sending a portion of the savings that
Doge claws back to Americans in the form of a
direct payment and a fe you've read any articles on this,
(21:33):
if you've seen this talked about, you've seen like a
five thousand dollars number pretty early on. And that kind
of reminds me of the early days of the stimu dollars.
Speaker 2 (21:41):
You know.
Speaker 3 (21:42):
Yeah, eyes get bigger, mouth starts watering a little bit.
You start thinking you're gonna see a direct deposit in
your account.
Speaker 1 (21:47):
Wait a second, how much am I getting? And you
kind of start pre spending it before it even drops. Unfortunately,
because the precedent has been set. But the way it
works is some of the savings from DOGE would help
to pay down the federal debt, while twenty percent could
evidently float to individuals. Sounds nice, but we don't want
folks to hold their breath. I think we are unlikely
to get a check for five thousand dollars in the
(22:10):
mailbox anytime soon. Oh yeah, I can't imagine what that
would do to inflation. And it just does not seem
very likely personally, right. No, It's it's one of those
things where people are gonna see headlines, they're gonna be like, cool,
where's my DOGE dividend, where's the check?
Speaker 2 (22:23):
When's it coming? And it's not. It's not coming. Like,
it's highly unlikely.
Speaker 3 (22:27):
I just don't see to be the bearer of bad news,
right right, Well, I just can't believe that they floated
this idea, that they stuck it out there without I mean,
it's just how the current administration works.
Speaker 2 (22:37):
They're just constantly throwing ideas out there.
Speaker 3 (22:39):
But when you know substance to back it up, when
you put something out there like this that folks are like,
that's something that they can wrap their heads around, that's
incredibly tangible. They've seen what that felt like in the past,
and if you don't deliver on that, folks are going
to be pissed.
Speaker 1 (22:51):
Honestly, it's kind of like the student loan forgiveness thing,
but I think this of this is actually being a
little bit worse because the student loan forgiveness thing was
they were attempting to do this, and there might be
illegal way to pull this off, but ultimately there were
a lot of disappointed student loan barers at the end
of the day because that promise didn't come to fulfillment.
This is another one of those things where it's a
promise that's not going to happen, and that's because five
(23:13):
thousand dollars per household. Well that's the estimate based on
DOGE cutting two trillion dollars in federal spending. There's zero
sign that DOGE is going to find a way to
slash government spending anywhere near that level. Not that there
won't be some spending cuts around the margins that could
shrink the size of government a bit, but as we
said last week, entitlement programs would have to be significantly
(23:34):
altered in order to realize savings of that magnitude. Those
make up two thirds of the roughly seven trillion dollar budget,
and there's just no political will to touch those programs
in the slightest Like the President has basically said, we
aren't going to cut back in any way, form or
fashion on those entitlement programs.
Speaker 2 (23:51):
They campaign on that. So I think a five.
Speaker 1 (23:53):
Hundred dollars check, much less a five thousand dollars check,
is a pipe dream. Just don't read that headline and
assume that government money is heading your way soon.
Speaker 2 (24:01):
Yeah, that's right.
Speaker 5 (24:02):
You're listening to how to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (24:09):
If you have a money question, we'll send it our way.
All you have to do is record your question on
the voice memo app there on your phone and send
it over via email. You can find the simple instructions
at how toomoney dot com, forward slash ask. It is
now time for the Facebook Question of the Week, which
is from Anissa.
Speaker 2 (24:25):
She writes, I thought.
Speaker 3 (24:26):
You could check your credit score for free by going
directly to the three sites. I am on Equifax's page
and it lists prices. I don't see anywhere on the
site where it says free. Please show me how to
navigate this particular site to obtain my free score.
Speaker 2 (24:40):
What am I missing? Oh? What's you think, Joel?
Speaker 1 (24:43):
I hate to be the bear of bad news on
this one, Matt. But in the credit bureaus, they're not
down with offering free scores. I don't know if you
remember this, probably like fifteen years ago, maybe there was
a free credit Reporter or free credit score dot com,
and the credit bureaus were coming up with all all
these websites to try to entice you to come directly
(25:03):
to them.
Speaker 2 (25:04):
To get your credit score, to trick you.
Speaker 1 (25:06):
But they were trying to trick you, and so yeah,
maybe it was free for like a week or something
like that, but then they wanted to you to fork
over fifteen twenty bucks a month or something like that
for all these insights into your credit score. This became
a profit center for them, and what they prefer to
do still to this day is to confuse you and
to profit off of you as much as possible. And
at the same time, when it comes to actually providing
(25:28):
you service if there's an issue, they're not going to
do that. So they're never gonna, let's say, respond to
complaints about errors that you might have found and that
you've made them aware of there's still a lot of
reports would suggest somewhere between one and four and one
in five Americans has an error on their credit report
that has not been removed, that has not been made right.
So Anissa, I just say this to begin with, you're
(25:50):
looking in the wrong place. The only reason to go
to the website of an individual bureau is to freeze
or thaw your credit report. Other than that, stay away,
do not go looking for your credit score from those guys.
Speaker 2 (26:01):
Totally.
Speaker 3 (26:01):
Yeah, And you said freeze, which is important because they have,
like all the bureaus have a credit lock feature.
Speaker 2 (26:07):
Right, we're not talking about freezing.
Speaker 3 (26:09):
They offer locking abilities as well, and they're going to
try to charge you for something that's already available for free.
Speaker 2 (26:16):
And plus their.
Speaker 3 (26:17):
Product is kind of worse when it comes to the
ability to get in there and to monitor your credit,
but they're marketing it's going to make it sound superior. Well,
and of course they're going to prioritize some of the
different plans that they offer that have credit monitoring and
just some of these other.
Speaker 2 (26:30):
Faux services that they offer.
Speaker 3 (26:32):
But the cool thing is getting your credit score for
free is possible, and the place to turn is typically
just to your credit card company. Almost everyone listening here
they have a credit card, and the different companies have
their own sort of credit score products. I'm thinking of
Capital One. Theirs is called credit Wise. Discover has a
free credit score that updates monthly as well AMEX like
literally all the credit cards, and it's one of the
(26:53):
best ways these days to monitor your actual score for free.
Typically you're logging in there anyway. There's no need then
to register your account with Equifax or Experience or whoever
or TransUnion in order to try to get your free
score over there.
Speaker 2 (27:09):
And if you want to.
Speaker 3 (27:10):
Look at your detailed report, well that can actually be
had for free at annual credit report dot com, which
is actually still available for free weekly. That's something they
started offering during the pandemic when it seems like the
world was going to end.
Speaker 1 (27:23):
So that is what they've maintained. That is the report
that's available, not the score score. So if you want
the score, you got to go elsewhere, and you're right
at the credit card companies do a great job on
that front. I still remember, do you remember the bank
Washington Mutual that was WAMU. Yeah, that was one of
my first bank accounts.
Speaker 2 (27:38):
And they're still around, right they got the Ostrich No,
they're gone. The guy with a mustache, No.
Speaker 3 (27:42):
That's uh, what am I thinking of? That's Liberty, Yeah,
Liberty Mutual. That's okay, that's insurance. So Washingt Mutual.
Speaker 2 (27:47):
No, they went.
Speaker 1 (27:48):
They went bust in the Great Recession. But when I
had part of the reason I got my bank account
with them was because at the time, it was they
were essentially the only place where you could get your
credit score for free once a month, and I was
nerdying into personal finance as a twenty two year old
or something like that, and so I was like, cool,
(28:09):
I'm going to go with that account. But now the
cat's kind of out of the bag. The credit score
is not nearly as hidden as it used to be.
All the credit card companies offer something like that, or
most of them. Also, I would say, Anissa, check out
credit Karma. You'll get to see two scores for free.
One is from TransUnion and one is from Equifax. You
mentioned Equifax in your question, so if you want to
see your Equfax score, that's a good place to get it.
(28:30):
That gives you a pretty good idea of where your
credit score stands. By being able to see both of
those scores. Credit Karma will try and sell you a
bunch of other financial products, including new credit cards or
maybe even auto loans. Avoid those if you're not interested,
but it's a solid site for digging into what's going
on with your credit score. I like their credit health
section because it can help you see where you need
(28:50):
to improve, so it's not just the score, but then
it's like, hey, here's why your score isn't as good
as you want it to be, and here's where you
can make improvements, Like if you're using too much of
your available credit, or if you're making too many inquiries
or something like that. They will make you aware of
that and so then you can maybe correct your course
so that you can improve the score.
Speaker 2 (29:10):
Well.
Speaker 3 (29:10):
Even a lot of the credit card companies are actually
offering that yeah now as well, And I think if
you dig deep enough that the credit bureaus will they
do the same thing. But we're just gonna not steer
you towards them because of the fact that they oftentimes
just do such a terrible job at the one thing
that they're supposed to do a good job at.
Speaker 2 (29:25):
And is it because of that?
Speaker 3 (29:26):
I don't want to reward them with any other clicks.
Speaker 2 (29:28):
And indeed, let's get to one more Joel from Courtney.
Speaker 3 (29:34):
She said, what's the instacart hack that Joel was talking
about for Costco? Literally just less impulse purchases by using
Instacart Or.
Speaker 2 (29:40):
Is there something else I'm missing? Joel? What's the going
to share your Instacart hack?
Speaker 1 (29:44):
I will say this, that's not something I had thought
about that much, the fewer impulse purchases, but it's totally true.
Speaker 2 (29:50):
Or do we not talk about that well? Because if
you go, it's true, it's true how we did well.
Speaker 1 (29:53):
Maybe we did, but it's something I had not thought
through a lot, Like when you guys.
Speaker 2 (29:56):
Were looking for an easy way to get your Afsea
bites or whatever it is.
Speaker 1 (30:01):
I just like straight up discounts and not having to
go grocery shopping or and having someone else do it
for me if it's not going to cost me an
arm and a leg. And that was my initial aversion
to Instacart, or to buying groceries online.
Speaker 2 (30:13):
Pay premium, you.
Speaker 1 (30:13):
Pay the premium, you pay more than what you pay
in the store, and then on top of that you
got to pay the tip, the Instacart fee all all
that stuff, and so I was like, no, I'm not
into it. I would rather get my groceries as cheaply
as possible. But Costco sells one hundred dollars INSTACR gift
cards for eighty bucks, which is like a ridiculously sweet discount.
Speaker 2 (30:35):
So by my calculations, that's twenty percent of it is.
Speaker 1 (30:38):
And you can get those gift cards online or in store.
If you get them online, you can only buy two
every two weeks. If you buy them in store, you
can buy two every time you go in. Some people
have said you can buy two, walk out, go back in,
buy two more. I haven't tried that yet, although I'm
sure you can, especially if you go see a different
person at checkout. But I don't even think they would
(30:58):
give you put something lasses on exactly, or a mustache mustash.
But so what's so great about it, too, is that
you can use Costco's same day service costco dot Com
click the same Day and you can buy your groceries there.
The markup, Matt, I haven't done the math exactly, but
I'm pretty sure the markup is somewhere between nine and
eleven percent on most of the groceries. So you're getting
(31:20):
that twenty percent discount, you paid the nine to eleven
percent markup, then you got to pay the tip to
the chopper on top of that, but you still come
out I would say, even if not a little bit
ahead and you avoided the Impulse buys. Show me your
math and it's true. I'm telling you, man, go look
go look I have. And then I looked on Reddit
to see what other people saying, and they were agreeing
(31:41):
with me that it is somewhere in that range. But yeah,
so this is what it's saving me multiple hours a
week of grocery shopping, which is nice. And even if
you just kind of need to make a quick order
or something like that, it's not as frustrating because you
know the pricing and you know you got a discount
on that gift card. So I think for a lot
of people out there who are like I wanted to
try instackart, but I too am too frugal to go
(32:01):
in that direction. If you like Costco, the instacart hack
at Costco makes a lot of sense.
Speaker 2 (32:05):
I love it.
Speaker 1 (32:06):
Thank you as always for listening to the show. We
appreciate your time and attention. You can always find more
money saving information up on our website at howtomoney dot com.
Speaker 2 (32:15):
We'll see you back here next week.
Speaker 1 (32:17):
You've been listening to How to Money with Joel Larsgard.
You can always hear us live on KFI Am six
forty twelve pm to two pm on Sunday, and anytime
on demand on the iHeartRadio app
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