September 20, 2024 • 34 mins
Time for a Friday Flight- our little sampling of the week’s financial news and what it means for your personal finances. There are a lot of headlines out there, but we boil them down to specific takeaways that will allow you to kick off the weekend informed and help you to get ahead with your money. In this episode we explain some relevant and helpful stories like: rock the vote, the long-awaited Fed rate cut, eliminating bad debt, rich renters, 15 year mortgages, 529 milestones, bribing kids to read, who keeps the $70,000 engagement ring, expensive therapy, dumbphones and work-life balance, returning to the office, the new Amazon Saver line, and costly coffee.
Want more How To Money in your life? Here are some additional ways to get ahead with your personal finances:
- Knowing your ‘money gear’ is a crucial part of your personal finance journey. Start here.
- Sign up for the weekly HTM newsletter. It’s fun, free, & practical.
- Join a thriving community of fellow money in the HTM Facebook group.
- Find the best credit card for you with our new credit card tool!
- Massively reduce your cell phone bill each month by switching to a discount provider like Mint Mobile.
And please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe if you’re not already a regular listener, and give us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money. Have an awesome weekend!
Best friends out!
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to had of Money.
Speaker 2 (00:01):
I'm Joel, I'm Matt, and today we're talking about rate reductions,
rich renters, and costly coffee. That coffee is costing more money,
(00:28):
not because you're getting the good stuff, Like, uh, you
haven't upgraded like I have yet? Have you drink? I'm
keeping my coffee habit minimal. You're trying to keep there
are certain lifestyle creep factors that you're trying to keep
in check. Your coffee game is one of them. Although
you did get that nice how's that nice brewer going?
By the way, you got like one of these faincy
automated coffee brewer things. Yes, I got a coffeemaker. There's
(00:49):
this bran called the mocha Master, and it's trying to
in drip coffee form mimic a pour over coffee effects, right,
does it? Because it does the bloom and everything right?
Speaker 1 (00:58):
Like, Yeah, but I.
Speaker 2 (00:59):
Didn't a mochamaster because those things are very expensive. Yeah,
you got the I got the off brand discounted version. Yeah,
so so mine is like the best ViBe's brand or
something's working for you though literally paid fifty bucks for it,
and which is mortally masters like two fifty or three fifty.
Oh yeah, oh really expensive. It's been great, it's been great,
So it's And the other thing was we were doing
French press, and French press just won at least too
(01:21):
many oils and too it takes too long. And I
like being able to press a button and get my coffee,
but I also don't want it to be like the
ten dollars mister coffee thing, So fair enough. That's it's
my middle ground that I'm willing to join. Yeah, we'll
get to coffee the rest of our coffee talk a
little bit later on. But we hope everyone is having
a good week. We hope everyone. Hey, by the way,
if you haven't listened to Wednesday's episode, man, that was
such a fun episode. I'm still thinking about that, digging
(01:43):
into Megan Gorman's book a little bit more All the
President's Money. It was a fun way for us to
talk about politics without talking about the politics, because.
Speaker 1 (01:51):
Everyone's talking about politics.
Speaker 2 (01:53):
Everyone's got their own opinion. Yes, And by the way,
just a follow up, I think last week, Matt we
mentioned something about kind of focusing on the thing you
can control, and maybe to a certain extent, we made
voting sound like a dumb idea, and I know why
you're saying this. We got some pushback from people. I
just want to say, like, we're not against voting. I'm
planning on voting, and you have actually a lot more
(02:13):
control in local elections.
Speaker 1 (02:15):
I guess. Oh heck yeah.
Speaker 2 (02:16):
What we're trying to say is maybe put it in
as proper context. And I'm glad we live in a
country where we have the freedom the ability to vote
our conscience. Heck yeah. But at the same time, I'm
not putting my hopes and dreams pinning it to any politician.
Speaker 1 (02:29):
But get up there.
Speaker 2 (02:30):
Yeah, you know the rock. Do they still say rock
the vote?
Speaker 1 (02:32):
It was like twenty years ago. That's from the Bill
Clinton era.
Speaker 2 (02:35):
Yeah, no, exercise your constitutional right to have a voice
in the politics and what happens. We are all for that.
So I'm sorry if it came across like we were
being completely dismissed above it. We were just saying trying
to say to focus more, at least on the things
you can't control. Fair enough, All right, let's get to
the Friday flight. And by the way, the reason we
call it the Friday flight is because when you get
to a brewery you can get a flight of beers,
(02:56):
a nice little sampling. That way, you don't have to
fully commit to one single beer. And that's what we
try to do with the financial stories that we've come
across this week and how they pertain to your personal finances.
But let's talk about Jerome Powell Joel. Because the hotly
demated moment, the anticipated FED rate cut, it finally happened.
They cut rates for the first time in many years
(03:18):
by half a point fifty basis points, which is more
than a lot of folks had anticipated. It's more than
I was expecting in an attempt to prevent an economic slowdown.
And this move it's going to negatively impact savers and
positively impact folks who have credit card debt, for instance,
although minimally. But as the journal put it, the era
(03:40):
of earning easy five percent returns on your cash is
ending slowly. Is not going to happen overnight, folks. But
this most recent FED move it could also be the
start of continuing rate cuts, which would make the impact
more significant over time, but that just remains to be seen. Historically,
that's what happens when the first rate cut begins, the
(04:02):
downward path continues. It's not one and done. That's just
not how it works, at least historically. Again, we who
knows so, especially with inflation, and we'll be paying attention
to those numbers. But you're right, you said in preventing
an economic slowdown, Matt, and I think the Fed has this.
They have this dual mandate right to pay attention to
inflation but also to pay attention to the labor market.
And they're seeing signs of softness in the labor market
(04:23):
and that was I think a big part of the
reason for this rate cut, and for a bigger rate
cut than many had predicted in this rate cut. And
future rate cuts are going to impact savers, are going
to impact borrowers, are going to impact investors. But I
think you're right to say too that slowly and how
much we don't quite know yet. But if you have
a credit card debt, if you have a home equity
(04:43):
line of credit, pretty soon you're going to likely see
those rates start to tick down. If you're borrowing to
buy a car, you've taken on an auto loan, you
might see rates ticked down there too. When it comes
to mortgage rates, well, what's going to happen there? I
wouldn't say that this is an excuse to take out
more loads of That's not what you're say. No, no, no, no,
I'm just saying like that that the reality on the
ground is going to get cheaper to borrow, and sadly
(05:05):
savers are going to get a small gut punch too.
It's been like kind of nice for savers to earn
reasonable returns and those returns might start to get less
reasonable in the near future. And basically, like your debt,
still even an environment of declining rates is still worth
paying off quickly. So if you've got credit card debt
and you're like, ah, it's instead of twenty two percent,
(05:26):
it's now twenty one and a half percent, that doesn't
make it good. It's still awful and you still want
to be rid of.
Speaker 1 (05:30):
It as quickly as you can.
Speaker 2 (05:31):
Unlike mortgage rates, right, so what we're not saying is
to pay down your thirty year three percent mortgage. But
this does bring up another question that comes up when
rates start to head down, and that is what is
going to happen with mortgage mortgage rates? What is the
future of home ownership and your you know what you're
paying to the bank. Who is servicing your loan has
a big impact on affordability, and they've already come down
(05:55):
quite a bit, I think in anticipation of these rate cuts, honestly,
to see if mortge rates continue to drop, because I
feel like they started taking down because all the banks
knew that this rate cut was coming. It had been
widely expected, it was broadcasted. Yes, yes, yeah, and so
because of that, mortgage rates don't follow exactly the Fed
Funds rate. There are a lot more factors involved in
(06:16):
sending mortgage rates.
Speaker 1 (06:17):
Yeh.
Speaker 2 (06:17):
Yeah, they're not directly tied. They're not going to see
in immediate drop. They don't move in tandem with the
Federal funds rate. It's simply an ingredient that goes into
the larger product. Yeah, right, Like it's a major ingredient.
It's like coke, right, and you're thinking, oh, well, i'm
drinking coke. I'm just drinking coke, right, And you're like, well,
take a look at the ingredients list. It's mostly carbonated water, yes,
but there's also some other stuff in there, like high fruit.
(06:38):
It's corn syrup, caffeine, caramel, color. Those things have an
impact on the overall coke as well. It's not just
the carbonated water. But speaking of buying, renting, it might
be better no matter how much money you have. The
Journal they actually had an article about really wealthy folks
who could easily afford to buy a home but who
are instead opting to rent, and the reason is because
(06:58):
there aren't enough homes on the market that they're interested in. Granted,
a big part of this article is focusing on some
ultra rich folks like this one guy's paying nineteen thousand
dollars a month for his super swinky apartment in Manhattan.
That sounds reasonable, seems totally relatable, But the truth is
renting is cheaper in today's housing environment in almost every
(07:19):
single one of the top fifty metro areas. It's not
always an easy choice. And I think the rent versus
by decision it's going to look different for everyone, but
certainly something to consider. Yeah, and I do think that
with rates coming down, it is going to cause some
of those folks Matt who are on the sidelines. They're like,
I want to buy a house, but seven and a
half plus percent interest rates and plus the what's going
(07:40):
on with housing prices, that's got to be priced out.
But if we're talking about more six percent interest rates.
That might cause some more sellers to join in, and
that might cause more buyers to have their interest peak too.
Speaker 1 (07:53):
So I think that's good.
Speaker 2 (07:53):
I think we might see more fluidity in the housing market.
It doesn't mean prices are coming down, but I think
affordability might get a little bit better. And there certainly
are going to be more options for folks. Yeah, more movement. Right,
let's talk about if you're going to get a mortgage.
What about getting a fifteen year mortgage? Well, Kiplinger says
more people should be considering one. I would say not
so fast, Kiplinger. But what they note in this article
(08:14):
is that you're going to be able to pay off
your home sooner duh, fifteen or fifteen years sooner. We
agree with that assessment, and that you're going to pay
less and overall interest, which is also true, but that
much larger mortgage payment could prevent you from attacking some
other really important financial goals. So we're not completely against
fifteen year home loans. And actually, when you look at
(08:36):
the spread on fifteen year mortgages Matt versus what you
pay interest right wise getting out taking out a thirty
year mortgage, the gap has grown, and fifteen year mortgages
have looked better in recent months in comparison to their
thirty year counterparts. And if you hate home dat, I
guess and you can afford it, I would consider going
this route. At least for some folks it might make
the most sense because it forces them to do the
(08:58):
right thing. But you can always choose to pay more
on a thirty year mortgage. And it's also important to
mention that if you if taking out a shorter mortgage
means foregoing let's say, contributing to or maxing out your
roth IRA, if it means not having a solid emergency fund,
if it means not investing for your future in ways
you otherwise would, it's not worth the trade off. But
(09:19):
if it prevents you, I guess, from doing sillier things
or not as intentional things with your money, then maybe
the fifteen year mortgage is the right thing for you.
That's right, Okay. We talked last week about rapidly growing
four to one K accounts, which we.
Speaker 1 (09:33):
Love to see.
Speaker 2 (09:35):
Well, guess what, five twenty nine plans have surpassed the
cool milestone as well, five hundred billion dollars in total assets,
woo Que, the streamers, and the wish I cant. Essentially,
the word is getting out about five twenty nine's and
as they've become more flexible, they're drawing more interest as
well as more dollars from parents around the country. So
(09:57):
it's worth addressing. Is this good news? What we would say?
Speaker 1 (10:01):
Kind of.
Speaker 2 (10:02):
I'm certainly glad that five twenty nine accounts are making
the headlines and the future wroth conversion possibilities. They certainly
do make five twenty nine funds more attractive, right. I
think that's what was keeping a lot of people on
the sidelines. They were afraid of their dollars getting locked
up and they didn't want to overfund those accounts. It's
like they were too the accounts were too inflexible, and
so people are too origid. I just don't know if
(10:23):
I want to lock my money up into that, And
that was completely understandable, totally yeah, and Kiplinger they also
noted another reason too, they think was because of the
fact there's a new grandparent loophole that was put into
place for the twenty four twenty twenty four twenty twenty
five school year, which is pretty stink and cool. Maybe
some listener will hear this and send in a listener question.
We can talk about this in depth a little bit more,
(10:45):
but it basically makes it to where you don't have
to report that on the FAFSA. So that being said,
it seems like this is only a good thing, right,
But on the other side of the coin five point
nine accounts, they really only make sense for folks who
are completely crushing it when it comes to their own
retirement accounts. First, if you are not doing that, we
want to make sure that folks are focusing on that
before you start to invest for your child's future education needs.
(11:08):
It's almost as if, like imagine a world where something
there is a new tweak, a modification to the roth
IRA and it just made it more attractive. I think
we would see a similar impact on the amount of
money going into roth IRA's, Yeah, because it just makes
the headlines, and anytime something is featured, I think it
draws more eyeballs, it draws more money into those accounts,
and we kind of see them swell a little bit. Yeah,
(11:30):
and we're not anti five twenty nine, but what we're
saying I guess is I got four of them set
up for my kids. Same, except I only have three kids.
But yeah, you don't want to get the cart before
the horse. And the truth is, like it's it's a
solid cart, like it's well built, but if you put
it before the horse, you're not going to get the
movement that you want. And so yeah, make sure that
you're looking after your own retirement accounts first, hopefully getting
(11:54):
closer to the point of maximos things out before you
really delve into that amount of just seen too many
folks barely getting the match from their employer nothing else.
Five to twenty nine plan is next on the agenda,
and that's too soon, Like you want to wait till
you've got a better game plan with your own retirement
accounts before you jump into that the five twenty nine investing. Okay,
speaking of kids, should you pay your kids to read?
(12:17):
I found this really interesting story in the New York
Times match. I don't know, are you paying your kids
money to read books? No? They do it of their
own volition. Yeah, all right, let's because you have really
great kids. And in my oldest she's like Belle and
Beauty and the Beasts, like walking around with a book
interface all the time, which I think is amazing. This
probably could have been the ludicrous headline of the week,
but the New York Times had an article and it
(12:38):
was written my parent who was saying that she paid
her kid one hundred bucks to read a book. That's
a lot of money. It is a lot of money.
I was like, one hundred dollars, that's crazy. She admits
that it was like this ploy of last resort and
that the conversation, yes, it's incredibly high, but that her
plan has actually worked. It's open the floodgates, causing her
her twelve year old daughter to start reading more regularly.
Speaker 1 (12:59):
And I, I guess, I don't know.
Speaker 2 (13:01):
I feel multiple ways about this, Like the parent, she's
trying to get her daughter to love reading. But I
want your opinion. Do you think she did the right
thing there? She's trying to provide it by incentivizing. So
she is she doing this with every single book or
is it just one book? No, so it was the
first book and hopes that would kind of lead to Okay,
I'm fine with that more perpetual reading. Well, it makes
me think back to when I was a kid in school.
(13:21):
We had this thing called accelerated reader, and I can't
remember if it was after every book that you read,
or maybe when you accumulated a certain number of points
or something like that.
Speaker 1 (13:30):
But there's I.
Speaker 2 (13:30):
Feel like there's like a pizza party involved in the class.
I recall us getting these vouchers for like a personal
pain pizza, Yes, at Pizza Hut.
Speaker 1 (13:37):
I remember that too.
Speaker 2 (13:38):
How did they not go bankrupt because there are so
many kids, Just think about one single school. That can't
be right. They weren't handing those out after every book
you read, not.
Speaker 1 (13:46):
Every book, but I think it was.
Speaker 2 (13:47):
It was like a summer reading program maybe and you
read a certain number and then you get the free
personal bank or sometimes you get tickets to like a
baseball game or something like that where I go. But
I remember the Pizza Hut coupons though, Yeah, stockpiling those
bad boys. But yeah, so I think I'm fine with that.
I'm fine incentivizing kids to do the things you want
them to do. It's unfortunate I guess that more kids
(14:09):
aren't naturally reading, But it's because I think this is more.
This is less money and more like social issues or whatever.
But there's just other flashier things that they're drawn to,
like video games, movies, TV, social media, right, like, there
are all these other things as opposed to finding ways
to elevate reading. And I mean our kids, they really
do love reading. And I think it's in part because
(14:29):
we have pursued it as a family. Like I mean
I try to read, like at dinner every night, like
ten to twenty minutes. I eat faster than the kids
do and they're still eating and Kate and I are just
like looking at each other, so like we've been doing
this for years now, but we read as a family.
Right now, we're doing Wing feather Saga is like the
series that we're going through right now. But the kids
love it. I have literally said to them before, Hey,
(14:50):
if you disobey mommy again, we're gonna take away your
new library books. Yeah, like as a punishment, because that's
something that they enjoy doing so much. But I think
there are ways that we can elevate it throughout their lives,
as opposed to just having the expensive sort of carrot
at the end of the stick, you know. Yeah, and
if you're trying to do that with every book, that
get expensive real real quick. Sure, But I think that
(15:11):
the one time thing and trying to incentivize something to
try to build a habit that's one piece of the
puzzle maybe, and trying to help build that habit. It
makes me think, though, I like, I bribe my daughter.
I give her a free book, I'll buy her book.
It's a use book if she gets a hundred on
her spelling test. And so we work our butts off
to try to get a hundred on the spelling test
every week. And so that is a bribe of sorts,
(15:31):
but it's a bribe.
Speaker 1 (15:32):
Also.
Speaker 2 (15:32):
The incentivizes are not only to do well in spelling,
but to keep reading. So and I'm not even opposed
to just the pure cash bribe as well, just to
kind of like get the ball rolling, you know. It's
like like there needs to be an initial behavior change element.
Speaker 1 (15:45):
Yeah, and play. Well.
Speaker 2 (15:45):
The truth is we're human. And so if someone asked
me to stop doing a bad habit and I was like,
what's in it for me? And they were going to
pay me money to do it, I would breathe really
would my ears a perk up. I'd be interested. So
at first I think I revolted against the story. I
was like, that seems weird. At first, You're being judgmental. Yeah,
the more I thought about it, I was like, actually
that might make sense fair enough, Yeah, and kids respond
(16:06):
to those incentives or We've got more to get to
on this episode. And clear we're we're talking about expensive
mental health. We'll get to that and more right after this, Right, Joel,
we are back from the break and guess what it is?
Time now for the ludicrous headline of the week. This
one is from WBZ. This is a local more of
(16:29):
a local story, I guess WBZ in Boston. Listener Gary
sent this one our away. Thank you, Gary, and the
headline reads, fight over seventy thousand dollars engagement ring heads
to State Supreme Court. Sounds like there's some drama involved
in this one. Yeah, some relational drama. First of all,
that's one heck of an expensive engagement ring. Is it
still three months salary? Joel, you and I have said,
(16:50):
I don't know that we've demnked that a little bit.
But if that's what you're assuming, this guy's doing quite well.
He's a baller if that's the case. But the crux
of this issue of the story is whether an engagement
ring is a conditional or unconditional gift? Is it a
nice present? That the recipient gets to keep no matter what,
or is it more along the lines of, Hey, if
we don't get married, I'm expecting that ring back. Personally, Joel,
(17:14):
I'm kind of that thinking. It's called an engagement ring, right,
and so plus I can like picture that in movies, right,
like if you call off the engagement, she like takes
off the ring, hands it back. It's sometimes throws it
at his face, depending on what he's depending on what
movie that you're watching. But uh, yeah, what do you think.
I think if yeah, if you got someone an engagement present,
like a Oh I get you a purse because I
love you, or I got you a suit jacket because
(17:36):
I love you, whatever it is, that's that's cool, keep
that thing. But the engagement ring does feel a little different.
Although state laws around the country, as I looked into this,
they're all different. He didn't do this, yeah, they Oh,
they have different takes on whether or not it's considered
conditional or unconditional. Oh shut up, And sometimes it depends
on the behavior of the parties involved. And so I
think part of the reason that that this this dude
(17:57):
is essentially saying give him a ring back because it's
really expensive. But two, because he's he's insinuating that she
did things that were untoward and she's like, no, I didn't.
Speaker 1 (18:07):
What are you talking about?
Speaker 2 (18:08):
So I don't know where I side down this too.
I think I also decided to, like, all, if you're
not going to go through with it, it's called an
engagement ring.
Speaker 1 (18:15):
Should I'll give it back.
Speaker 2 (18:16):
It's like to me, it's an external signal of your
intention to get married, right, like, oh, and the story
said that he you know, they called it off, and
he called it off in particular here shortly after they
got engaged. It would be different if they had gotten married.
That's a whole other thing. Let's say they've been married,
even for like a couple of years. I would say,
all right, she probably gets to keep it, like you
actually got married, Like that was the intent behind the
(18:38):
engagement ring, is the signal that, like, we are going
to get married. But there's a difference there between just
being engaged, I think and actually getting married.
Speaker 1 (18:45):
Yeah, but I don't know.
Speaker 2 (18:45):
It's an interesting story, and you could find yourself in
some legal limbo. I guess if you are engaged and
it doesn't come there, And that just stinks to the
relationship fell apart. But that's a lot of money at
stake and another reason Matt to be a little more frugal.
Speaker 1 (19:00):
Think with your your engagement ring choice.
Speaker 2 (19:02):
You never know and evidently depends on in which state
you reside. Yeah, maybe that couple could have used some therapy, jol.
I'm sure they could afford it based on how much
it was a Tiffany's engager ring. Seventy thousand dollars.
Speaker 1 (19:12):
Yeah, so expensive.
Speaker 2 (19:13):
But there's an article this week about how expensive therapy
can be. We've as a culture, we've destigmatized mental health,
but that doesn't mean it's gotten more financially accessible. Although
more insurance companies are going to help to pay for
some therapy, that being said, most therapists don't take insurance. Yeah,
so it's kind of like the reservation skit on Seinfeld.
It's like, you know how to take the reservation, you
(19:35):
just not how to keep it. There's a disconnect here. Yeah,
and it's like, Okay, well cool, insurance is going to
pay for therapy, but nobody wants to accept it, and
then you're you're kind of stuck between a rock and
a hard place, right Like sometimes like oftentimes is it
I feel like the going rate. We've talked about the
sum with Emily being in school to be a counselor,
like one fifty a session does not see safeties like
table stakes. Now, man, oh, is it really Yeah? So
(19:56):
it's even more so. Yeah, and especially if you're a
couple going to Marrorg's therapy, we're definitely talking two bills
or more, maybe closer to two fifty. And so there
was this recent survey man, I found that something like
a third of people were going to therapy. Theyre felt
like they were being helped by it, but they felt
like they had to actually stop going to therapy in
order to save money because it adds up. I mean like, really,
you go three times a month, that's a that's a
(20:17):
car payment, the average car payment in the United States.
It really, it really can be quite expensive. And I
want to say this too because I think initially when
I when Emily and I were talking and I was like, oh,
you can get that much per hour, You're going to
be rolling in the dough. And she was like, well, well, one,
there's the time that it takes to go to school,
There's the money that it takes to go to school,
There's the facility that you have to rent in order
(20:40):
to see people. Although there's more zoom therapy now, but
there's like all there's the insurance you have to have
as a therapist. It's not like they're just pocketing one
hundred and eighty bucks an hour. And it's not like
you're working eight hour. It's not like a plumber, right
or I don't know, it's not like a lot we
have to drive to and from their jobs.
Speaker 1 (20:54):
Yeah, like there are.
Speaker 2 (20:55):
Periods of time when you're not working as opposed to
like I guess I'm thinking of a lawyer who can
build hourly and it's typically is like you just sit
there at your desk and you continue to work pretty much.
You know, you break for lunch and whatever else you
need to do. But yeah, you're not seeing like clients
back to back back exactly for nine clients in a day.
There's some big old gaps. Yeah, get those dollars signs
out of your eyes aol.
Speaker 1 (21:15):
Yeah, Yeah, I had to.
Speaker 2 (21:17):
I had to, like, oh I got, I got me
a sugar mama, right, I'd get I had to re
align my expectations there. But yeah, I think it's important
to mention that mentioned that that that's part of why
it's so expensive, But it's also sad that it's financially
inaccessible to so many people. So what should you do
out there? I feel like I would love to go
see somebody, I would love to do some talk therapy,
but it does feel like I can't do it because
(21:38):
how crazy expensive it is. Well, one check and see
if there are nonprofits in your area that offer discounted
access to talk therapy. Those exist, and those can make
a big difference. Check and see if your employer offers
access to mental health services or will pay for some therapy,
especially if you had a traumatic event. Oftentimes there's like
money from employers Matt that will help pay for some
(22:00):
of that. Some therapists, like I said, do accept insurance,
and others will charge on a sliding scale depending on
your income. So it's worth asking about that too. Maybe
you find out, hey, my insurance does cover some mental
health help, and I'm gonna do my darkness to find
a practitioner who accepts that insurance. And I think this
is maybe under sold too, But How'm I gonna talk
(22:21):
with a friend going for a hike or a walk
or something like that. I know they're not trained in
the same way, but that can actually be a free
way to unburden some of those things that you've got
on your mind, get you thinking about certain events in
a healthier way. Perhaps, what do you think.
Speaker 1 (22:35):
About again, I know it's not the same. I'm just saying, yeah, I.
Speaker 2 (22:37):
Get what you're saying, though, because I mean, sometimes you
just need space and for someone to kind of like
ask some questions. And I think part of the loneliness
epidemic that we were going through as a country is
because we're not hanging out with friends as much on
that people to talk. We feel like we need to
professionalize everything. And that's true. Again, my wife's studying to
be a professional there, but she's awesome at it. And
why are you talking down the industry, Joals. I'm just
saying like that, if we have had more people in
(23:00):
our communities and in our neighbors that we're more connected to,
we might find that we needed to professionalize that just
a little less. I totally agree on the note of
mental health. Put down your phone after work hours, folks.
This isn't going to be shocking, but a recent survey
found that responding to work emails after hours, it's going
to lead the burnout. Yet the majority of Americans are
doing this very thing because they feel like they have to.
(23:22):
And so is that actually true though, Like do they
have to get back.
Speaker 1 (23:25):
To their boss or do they just feel like that
or do you?
Speaker 2 (23:27):
Yeah, Like, if your boss expects that you're going to
respond immediately, even if it's dinner time, I don't know.
I might say it might it could be time for
like a heart to heart sort of conversation with your boss.
Maybe you can negotiate some new expectations on both ends.
But the truth is, and this is another story we
came across the c suite, the upper crust in the
workplace hierarchy. They are doing it, so maybe you should
(23:51):
consider it as well. More CEOs are migrating back to
dumb phones basically in order to reduce interruptions within their
within their workday. There is a bit of, uh, sort
of like an anti tech movement that's happening, Joel, and
I think embracing it, at least in moderation could help
your personal as well as your professional life. That being said,
(24:12):
I don't want people to think that they have to
spend more money on these new gadgets that are going
to cost you money. That are dumb. I saw that
the you know what I'm saying, the new light phones
coming out and the version three. What's what's the price
of the eight hundred bucks? Oh, it's the same prices
as my phone.
Speaker 1 (24:27):
Ridiculous.
Speaker 2 (24:27):
It's so stupid. And so this is where we can
fall into that trap of consumption and thinking that, oh,
I got to consume in order to fix all my problems.
But sometimes yes, certain tools are helpful and they can
allow us to achieve some of the goals that we're
looking to achieve. But don't forget about self discipline and
the fact that it's takes Like you can buy that
stupid phone, it's been eight hundred bucks on a light phone,
but if you don't use it, and if you still
(24:49):
go back to the one that's pinging you from work,
turn off your notifications. First of all, I think that's
a super easy way to minimize some of the distractions
and minimize interruptions in your personal life. But in another room,
to put it in the room, set like draw a
line in the sand and set some rules around so
when you try off notifications, like the badge notifications will
go away as well, like the little red number down
there on your email. I don't want to be notified.
(25:11):
I don't want there to be a banner that pops
up on my phone every single time that I receive
an email. And I know that we're maybe speaking from
a position of luxury jeel like, this is the ability
for us to be our own boss. Some folks out
there might be saying, well, good for you, guys, I
can't actually do.
Speaker 1 (25:25):
That, but I have a real boss.
Speaker 2 (25:26):
And he said, but what I guess what we're maybe
highlighting here is it is something that is worth fighting for,
and it's honestly, it is the number one reason to
consider working for yourself. And your boss actually might expect
that you're gonna reply quickly because you normally reply quickly,
and so you might have set an expectation by just
how responsive you've been. And so maybe that's part of
(25:47):
the heart to heart is saying, listen, I have been responsive,
but I'm trying to like detox some of the tech
that's happening in my life in the evening times. And
so you know, if you say I need to check
my email one time, I at nine pm before I
like hit the hay or whatever, maybe that's the one
thing you give on. But I'm not going to be
responding at all hours of the evening because I want
(26:08):
to enjoy that time. And you're right, I think what
is Australia that basically made it illegal for bosses now
to contact.
Speaker 1 (26:14):
You in the evening.
Speaker 2 (26:15):
I don't know if we need a law, but we
do maybe need more open lines of communication. And yes,
it makes me think of actually what happened this week
with with Amazon. We're living in a far less worker
centric environment than we were a couple of years ago.
Amazon is calling employees back to the office full time
starting in January, and there are some unhappy Amazon employees
(26:38):
out there, even though I think that I saw also
that they gave that Amazon employees now have free access
to Prime. Sorry, that's not gonna that's not going to
make up for the fact that you got to go
back to the office. I did see that part. I
was like, they I should have free access to Amazon. Yeah,
they didn't have it already. Come on, it was like
way too cheap. So it's not just Amazon. The percentage
of time the average American is working from home has
(27:00):
dropped actually quite a bit since twenty twenty, when of course,
that was the way a lot of business had to
be conducted. We just weren't doing anything in person. And
I think we're going to see more of this. I
think this Amazon putting the foot down five days a week,
you're coming back into the office or you're out of here.
Those sorts of ultimatums are ramping up. And then when
a company as big as Amazon does it that, we're
(27:21):
going to see more employers follow suits. It's true, and
the less competitive the labor market becomes, the more employees
are going to be forced to take it on the chin.
And we know that in office work leads to more
advancement and pay hikes, especially.
Speaker 1 (27:33):
For younger workers.
Speaker 2 (27:34):
If your work from home stat status starts to change
and you don't like it, though, tap your network for
better opportunities. And if you really really hate the idea,
it's really important to start ramping up your savings so
you have more options. So some of those those Amazon
employees that have a nine month emergency fund saved up,
they might say, screw you, I'm not coming back in.
(27:55):
I'm and we were talking to I was talking to
somebody last night who says, man, I working from home
has changed my life. I have more time for hobbies.
I don't feel like I'm run ragged at the end
of the day, and I think a lot of people
feel that way, and understandably so. So if that's of
crucial importance to you, pushback. But if you're still in
the I'm trying to advance my career, ramp up my
(28:16):
earnings phase, going back in could be the best thing
for you. I am surprised to see that though, Like
so before it was only they only needed to be
in like three days, three out of five days of
the week. Yeah, now they're adding those additional two days. Gosh,
it really does Like guys, I thought we hybrid we worked,
was working well. I thought it was going to work out,
but that no longer seems to be the case. Another
Amazon related story, they're actually trying to compete with my
(28:38):
favorite grocery storeageol Aldi. Amazon's unrolling their new Amazon Saver line.
It's the snow frills extremely affordable sort of line, which
sounds exactly like all these value proposition Yeah, it's still
a relatively small lineup of food products, but everything costs
less than five dollars. And Amazon they've already got some
of their own proprietory brands, but none of them have
(29:01):
minimized the price to this extent, that's for sure. Yeah,
they haven't really targeted the super cheap store brand thing.
They've had kind of their more high falutint semi fancy
organice brands and stuff like that. And now they're like no, no,
all the and llegal laser eyes on you, focused on you.
Speaker 1 (29:17):
Yeah.
Speaker 2 (29:17):
I mean there's been a lot made about gouging in
the grocery elles, but just the cost of eating at home,
like honestly, Doe, they have always been more affordable than
going out to eat. And this Amazon launch is a
reminder that while prices they're certainly not going back to
twenty nineteen levels, and we are seeing inflation come down,
but prices are not going to go back to where
they used to be. That being said, there's still a
(29:37):
healthy amount of competition across the grocery store spectrum and
where you choose to shop, which specific brands that you
choose to buy, they will be a determining factor in
your overall grocery budget. Personally, though, I will say I'm
not super impressed with what I'm seeing when it comes
to the Amazon stadth, I haven't ordered something, okay, being
I would love to see you trying totally just Canp's
(29:59):
look delicious? I'm totally judging a book by its cover.
It just looks super generic and discounted. Whereas like when
I go to All the like all the and Costco
feel value driven to me, and especially Costco right like,
because you're getting like they have some nicer brands.
Speaker 1 (30:13):
You're saying, it feels more like a dollar store product.
Speaker 2 (30:15):
It does, it does, and so you're paying a similar
price as what you might pay at All the but
it feels like you're getting something that that's even cheaper. Yeah,
So I don't know. Maybe I will just be an.
Speaker 1 (30:24):
All the loyalist for whatever I think you will be.
I'll give it a shot.
Speaker 2 (30:28):
I'll see if there's something there that where I can
do sort of like a beta test, like compare some
apples to apples. Okay, not literally, they don't really have
apples this Amazon Savor line, but yeah, like canpis to canpis?
I guess, sure and report back, let us know what
you think. But I think more than hey, look at
this great new, super cheap, awesome food product from Amazon.
(30:48):
It's it's more of a kind of what you were saying,
highlighting the fact that they're having to compete with grocery
stores that have cut costs significantly, that are saving consumers
money regularly, and Amazon's like, well, we don't want to
get it left out completely, get left in the dust
by the Aldis and the leadals of this world. Right,
speaking of hiking grocery prices, though Matt new Data finds
it the coffee prices have been going up significantly. All Right,
(31:11):
I guess I'm just gonna pay more. Yeah, I get so,
are you?
Speaker 1 (31:13):
Is that what's gonna happen?
Speaker 2 (31:14):
Like you're gonna buy the fancy stuff, no matter what
are you gonna it's coffee. Coffee is like a non
negotiable man, Like, would you if the that's like one
of those inflexible it doesn't matter what the price goes to.
Almost yeah, Like I think I would still consume coffee.
I think there's a lot of parents out there and
a lot of workers who would be like, yeah, I
still got to get my coffee. You're not going to
like pull a Tim Ferriss and just cut caffeine out
of your life.
Speaker 1 (31:34):
Did he do that?
Speaker 2 (31:34):
I think he did Oh yeah, I don't think I
could do that. I think he said he slept better.
But like, yeah, so we've already seen those prices going up.
My bag at Costco went from like ten bucks to
fifteen bucks over the course of like a year, and
it might be going up even more. And at risk
of being those idiots who tell you to drink your
coffee at home because that's what's gonna allow you to
(31:56):
retire ten years earlier, which of course it's not. But
drink your coffee at home, because it's the more you
do that, the more it will save you money. Jill's like,
I'm saying, I'm not going to say the thing, but
then I'm going to say the thing. It is just
if you can play if you're paying five bucks a
pop for coffee, and how you complain about the price
of coffee and you do that five six days a week,
expected does that?
Speaker 1 (32:16):
It does matter?
Speaker 2 (32:17):
And I still think there are ways to enjoy your
nice cup of coffee out Like it's been a minute
since we've talked about this. You and I we still
every single Monday walk to our favorite coffee shop.
Speaker 1 (32:26):
And enjoy an espresso drink.
Speaker 2 (32:28):
We do it once a week, once a week, and
it makes it feel like a treat. And I think
if you do it five or six days a week,
it feels like the routine and something you expect. Then
start it starts losing its luster. You can make a
fine cup of coffee at home. In fact, man, I
feel like sometimes the coffee you're making is better than well,
like a lot of the local coffee shops are promo
thank you well just because like you, you dial it.
Speaker 1 (32:46):
You've kind of dialed in. Man.
Speaker 2 (32:47):
You've got a very scientific approach to how you make
your coffee. You read a loss of words because you
didn't know the term birgrinder.
Speaker 1 (32:54):
That's what it is.
Speaker 2 (32:55):
It No, it's more than that, because you're getting the
you're geting the temperature at the right, you're talking about
the special kettle, the number of rams of coffee.
Speaker 1 (33:01):
I'm just like, that's more my style. Man.
Speaker 2 (33:03):
I get into my coffee maker and hoping it turns
out okay, I have to research it, figure it out,
and then for the rest of my life I get
to do this thing at a discounted rate. You don't
have to do it that way, but know that ultimately
it might save you some money.
Speaker 1 (33:14):
Yeah.
Speaker 2 (33:15):
Well, before we wrap things up, let's give a quick
newsletter referral shout out to Megan C. Meghan, we really
appreciate you sharing the how to Money newsletter, which comes
out every Tuesday morning, to some of her friends who
she loves the most, or maybe family members. That's the
ultimate expression of love, is to share a newsletter that
matters to you with the people you care about, right.
Or a podcast, Yeah, or even a website how tomoney
(33:36):
dot com. That's where you can find our show notes
for this episode and the different stories that we discussed.
But buddy, that's going to be it for this episode.
So until next time, Best Friends Out, Best Friends Out.
Welcome to had of Money.
Speaker 2 (00:01):
I'm Joel, I'm Matt, and today we're talking about rate reductions,
rich renters, and costly coffee. That coffee is costing more money,
(00:28):
not because you're getting the good stuff, Like, uh, you
haven't upgraded like I have yet? Have you drink? I'm
keeping my coffee habit minimal. You're trying to keep there
are certain lifestyle creep factors that you're trying to keep
in check. Your coffee game is one of them. Although
you did get that nice how's that nice brewer going?
By the way, you got like one of these faincy
automated coffee brewer things. Yes, I got a coffeemaker. There's
(00:49):
this bran called the mocha Master, and it's trying to
in drip coffee form mimic a pour over coffee effects, right,
does it? Because it does the bloom and everything right?
Speaker 1 (00:58):
Like, Yeah, but I.
Speaker 2 (00:59):
Didn't a mochamaster because those things are very expensive. Yeah,
you got the I got the off brand discounted version. Yeah,
so so mine is like the best ViBe's brand or
something's working for you though literally paid fifty bucks for it,
and which is mortally masters like two fifty or three fifty.
Oh yeah, oh really expensive. It's been great, it's been great,
So it's And the other thing was we were doing
French press, and French press just won at least too
(01:21):
many oils and too it takes too long. And I
like being able to press a button and get my coffee,
but I also don't want it to be like the
ten dollars mister coffee thing, So fair enough. That's it's
my middle ground that I'm willing to join. Yeah, we'll
get to coffee the rest of our coffee talk a
little bit later on. But we hope everyone is having
a good week. We hope everyone. Hey, by the way,
if you haven't listened to Wednesday's episode, man, that was
such a fun episode. I'm still thinking about that, digging
(01:43):
into Megan Gorman's book a little bit more All the
President's Money. It was a fun way for us to
talk about politics without talking about the politics, because.
Speaker 1 (01:51):
Everyone's talking about politics.
Speaker 2 (01:53):
Everyone's got their own opinion. Yes, And by the way,
just a follow up, I think last week, Matt we
mentioned something about kind of focusing on the thing you
can control, and maybe to a certain extent, we made
voting sound like a dumb idea, and I know why
you're saying this. We got some pushback from people. I
just want to say, like, we're not against voting. I'm
planning on voting, and you have actually a lot more
(02:13):
control in local elections.
Speaker 1 (02:15):
I guess. Oh heck yeah.
Speaker 2 (02:16):
What we're trying to say is maybe put it in
as proper context. And I'm glad we live in a
country where we have the freedom the ability to vote
our conscience. Heck yeah. But at the same time, I'm
not putting my hopes and dreams pinning it to any politician.
Speaker 1 (02:29):
But get up there.
Speaker 2 (02:30):
Yeah, you know the rock. Do they still say rock
the vote?
Speaker 1 (02:32):
It was like twenty years ago. That's from the Bill
Clinton era.
Speaker 2 (02:35):
Yeah, no, exercise your constitutional right to have a voice
in the politics and what happens. We are all for that.
So I'm sorry if it came across like we were
being completely dismissed above it. We were just saying trying
to say to focus more, at least on the things
you can't control. Fair enough, All right, let's get to
the Friday flight. And by the way, the reason we
call it the Friday flight is because when you get
to a brewery you can get a flight of beers,
(02:56):
a nice little sampling. That way, you don't have to
fully commit to one single beer. And that's what we
try to do with the financial stories that we've come
across this week and how they pertain to your personal finances.
But let's talk about Jerome Powell Joel. Because the hotly
demated moment, the anticipated FED rate cut, it finally happened.
They cut rates for the first time in many years
(03:18):
by half a point fifty basis points, which is more
than a lot of folks had anticipated. It's more than
I was expecting in an attempt to prevent an economic slowdown.
And this move it's going to negatively impact savers and
positively impact folks who have credit card debt, for instance,
although minimally. But as the journal put it, the era
(03:40):
of earning easy five percent returns on your cash is
ending slowly. Is not going to happen overnight, folks. But
this most recent FED move it could also be the
start of continuing rate cuts, which would make the impact
more significant over time, but that just remains to be seen. Historically,
that's what happens when the first rate cut begins, the
(04:02):
downward path continues. It's not one and done. That's just
not how it works, at least historically. Again, we who
knows so, especially with inflation, and we'll be paying attention
to those numbers. But you're right, you said in preventing
an economic slowdown, Matt, and I think the Fed has this.
They have this dual mandate right to pay attention to
inflation but also to pay attention to the labor market.
And they're seeing signs of softness in the labor market
(04:23):
and that was I think a big part of the
reason for this rate cut, and for a bigger rate
cut than many had predicted in this rate cut. And
future rate cuts are going to impact savers, are going
to impact borrowers, are going to impact investors. But I
think you're right to say too that slowly and how
much we don't quite know yet. But if you have
a credit card debt, if you have a home equity
(04:43):
line of credit, pretty soon you're going to likely see
those rates start to tick down. If you're borrowing to
buy a car, you've taken on an auto loan, you
might see rates ticked down there too. When it comes
to mortgage rates, well, what's going to happen there? I
wouldn't say that this is an excuse to take out
more loads of That's not what you're say. No, no, no, no,
I'm just saying like that that the reality on the
ground is going to get cheaper to borrow, and sadly
(05:05):
savers are going to get a small gut punch too.
It's been like kind of nice for savers to earn
reasonable returns and those returns might start to get less
reasonable in the near future. And basically, like your debt,
still even an environment of declining rates is still worth
paying off quickly. So if you've got credit card debt
and you're like, ah, it's instead of twenty two percent,
(05:26):
it's now twenty one and a half percent, that doesn't
make it good. It's still awful and you still want
to be rid of.
Speaker 1 (05:30):
It as quickly as you can.
Speaker 2 (05:31):
Unlike mortgage rates, right, so what we're not saying is
to pay down your thirty year three percent mortgage. But
this does bring up another question that comes up when
rates start to head down, and that is what is
going to happen with mortgage mortgage rates? What is the
future of home ownership and your you know what you're
paying to the bank. Who is servicing your loan has
a big impact on affordability, and they've already come down
(05:55):
quite a bit, I think in anticipation of these rate cuts, honestly,
to see if mortge rates continue to drop, because I
feel like they started taking down because all the banks
knew that this rate cut was coming. It had been
widely expected, it was broadcasted. Yes, yes, yeah, and so
because of that, mortgage rates don't follow exactly the Fed
Funds rate. There are a lot more factors involved in
(06:16):
sending mortgage rates.
Speaker 1 (06:17):
Yeh.
Speaker 2 (06:17):
Yeah, they're not directly tied. They're not going to see
in immediate drop. They don't move in tandem with the
Federal funds rate. It's simply an ingredient that goes into
the larger product. Yeah, right, Like it's a major ingredient.
It's like coke, right, and you're thinking, oh, well, i'm
drinking coke. I'm just drinking coke, right, And you're like, well,
take a look at the ingredients list. It's mostly carbonated water, yes,
but there's also some other stuff in there, like high fruit.
(06:38):
It's corn syrup, caffeine, caramel, color. Those things have an
impact on the overall coke as well. It's not just
the carbonated water. But speaking of buying, renting, it might
be better no matter how much money you have. The
Journal they actually had an article about really wealthy folks
who could easily afford to buy a home but who
are instead opting to rent, and the reason is because
(06:58):
there aren't enough homes on the market that they're interested in. Granted,
a big part of this article is focusing on some
ultra rich folks like this one guy's paying nineteen thousand
dollars a month for his super swinky apartment in Manhattan.
That sounds reasonable, seems totally relatable, But the truth is
renting is cheaper in today's housing environment in almost every
(07:19):
single one of the top fifty metro areas. It's not
always an easy choice. And I think the rent versus
by decision it's going to look different for everyone, but
certainly something to consider. Yeah, and I do think that
with rates coming down, it is going to cause some
of those folks Matt who are on the sidelines. They're like,
I want to buy a house, but seven and a
half plus percent interest rates and plus the what's going
(07:40):
on with housing prices, that's got to be priced out.
But if we're talking about more six percent interest rates.
That might cause some more sellers to join in, and
that might cause more buyers to have their interest peak too.
Speaker 1 (07:53):
So I think that's good.
Speaker 2 (07:53):
I think we might see more fluidity in the housing market.
It doesn't mean prices are coming down, but I think
affordability might get a little bit better. And there certainly
are going to be more options for folks. Yeah, more movement. Right,
let's talk about if you're going to get a mortgage.
What about getting a fifteen year mortgage? Well, Kiplinger says
more people should be considering one. I would say not
so fast, Kiplinger. But what they note in this article
(08:14):
is that you're going to be able to pay off
your home sooner duh, fifteen or fifteen years sooner. We
agree with that assessment, and that you're going to pay
less and overall interest, which is also true, but that
much larger mortgage payment could prevent you from attacking some
other really important financial goals. So we're not completely against
fifteen year home loans. And actually, when you look at
(08:36):
the spread on fifteen year mortgages Matt versus what you
pay interest right wise getting out taking out a thirty
year mortgage, the gap has grown, and fifteen year mortgages
have looked better in recent months in comparison to their
thirty year counterparts. And if you hate home dat, I
guess and you can afford it, I would consider going
this route. At least for some folks it might make
the most sense because it forces them to do the
(08:58):
right thing. But you can always choose to pay more
on a thirty year mortgage. And it's also important to
mention that if you if taking out a shorter mortgage
means foregoing let's say, contributing to or maxing out your
roth IRA, if it means not having a solid emergency fund,
if it means not investing for your future in ways
you otherwise would, it's not worth the trade off. But
(09:19):
if it prevents you, I guess, from doing sillier things
or not as intentional things with your money, then maybe
the fifteen year mortgage is the right thing for you.
That's right, Okay. We talked last week about rapidly growing
four to one K accounts, which we.
Speaker 1 (09:33):
Love to see.
Speaker 2 (09:35):
Well, guess what, five twenty nine plans have surpassed the
cool milestone as well, five hundred billion dollars in total assets,
woo Que, the streamers, and the wish I cant. Essentially,
the word is getting out about five twenty nine's and
as they've become more flexible, they're drawing more interest as
well as more dollars from parents around the country. So
(09:57):
it's worth addressing. Is this good news? What we would say?
Speaker 1 (10:01):
Kind of.
Speaker 2 (10:02):
I'm certainly glad that five twenty nine accounts are making
the headlines and the future wroth conversion possibilities. They certainly
do make five twenty nine funds more attractive, right. I
think that's what was keeping a lot of people on
the sidelines. They were afraid of their dollars getting locked
up and they didn't want to overfund those accounts. It's
like they were too the accounts were too inflexible, and
so people are too origid. I just don't know if
(10:23):
I want to lock my money up into that, And
that was completely understandable, totally yeah, and Kiplinger they also
noted another reason too, they think was because of the
fact there's a new grandparent loophole that was put into
place for the twenty four twenty twenty four twenty twenty
five school year, which is pretty stink and cool. Maybe
some listener will hear this and send in a listener question.
We can talk about this in depth a little bit more,
(10:45):
but it basically makes it to where you don't have
to report that on the FAFSA. So that being said,
it seems like this is only a good thing, right,
But on the other side of the coin five point
nine accounts, they really only make sense for folks who
are completely crushing it when it comes to their own
retirement accounts. First, if you are not doing that, we
want to make sure that folks are focusing on that
before you start to invest for your child's future education needs.
(11:08):
It's almost as if, like imagine a world where something
there is a new tweak, a modification to the roth
IRA and it just made it more attractive. I think
we would see a similar impact on the amount of
money going into roth IRA's, Yeah, because it just makes
the headlines, and anytime something is featured, I think it
draws more eyeballs, it draws more money into those accounts,
and we kind of see them swell a little bit. Yeah,
(11:30):
and we're not anti five twenty nine, but what we're
saying I guess is I got four of them set
up for my kids. Same, except I only have three kids.
But yeah, you don't want to get the cart before
the horse. And the truth is, like it's it's a
solid cart, like it's well built, but if you put
it before the horse, you're not going to get the
movement that you want. And so yeah, make sure that
you're looking after your own retirement accounts first, hopefully getting
(11:54):
closer to the point of maximos things out before you
really delve into that amount of just seen too many
folks barely getting the match from their employer nothing else.
Five to twenty nine plan is next on the agenda,
and that's too soon, Like you want to wait till
you've got a better game plan with your own retirement
accounts before you jump into that the five twenty nine investing. Okay,
speaking of kids, should you pay your kids to read?
(12:17):
I found this really interesting story in the New York
Times match. I don't know, are you paying your kids
money to read books? No? They do it of their
own volition. Yeah, all right, let's because you have really
great kids. And in my oldest she's like Belle and
Beauty and the Beasts, like walking around with a book
interface all the time, which I think is amazing. This
probably could have been the ludicrous headline of the week,
but the New York Times had an article and it
(12:38):
was written my parent who was saying that she paid
her kid one hundred bucks to read a book. That's
a lot of money. It is a lot of money.
I was like, one hundred dollars, that's crazy. She admits
that it was like this ploy of last resort and
that the conversation, yes, it's incredibly high, but that her
plan has actually worked. It's open the floodgates, causing her
her twelve year old daughter to start reading more regularly.
Speaker 1 (12:59):
And I, I guess, I don't know.
Speaker 2 (13:01):
I feel multiple ways about this, Like the parent, she's
trying to get her daughter to love reading. But I
want your opinion. Do you think she did the right
thing there? She's trying to provide it by incentivizing. So
she is she doing this with every single book or
is it just one book? No, so it was the
first book and hopes that would kind of lead to Okay,
I'm fine with that more perpetual reading. Well, it makes
me think back to when I was a kid in school.
(13:21):
We had this thing called accelerated reader, and I can't
remember if it was after every book that you read,
or maybe when you accumulated a certain number of points
or something like that.
Speaker 1 (13:30):
But there's I.
Speaker 2 (13:30):
Feel like there's like a pizza party involved in the class.
I recall us getting these vouchers for like a personal
pain pizza, Yes, at Pizza Hut.
Speaker 1 (13:37):
I remember that too.
Speaker 2 (13:38):
How did they not go bankrupt because there are so
many kids, Just think about one single school. That can't
be right. They weren't handing those out after every book
you read, not.
Speaker 1 (13:46):
Every book, but I think it was.
Speaker 2 (13:47):
It was like a summer reading program maybe and you
read a certain number and then you get the free
personal bank or sometimes you get tickets to like a
baseball game or something like that where I go. But
I remember the Pizza Hut coupons though, Yeah, stockpiling those
bad boys. But yeah, so I think I'm fine with that.
I'm fine incentivizing kids to do the things you want
them to do. It's unfortunate I guess that more kids
(14:09):
aren't naturally reading, But it's because I think this is more.
This is less money and more like social issues or whatever.
But there's just other flashier things that they're drawn to,
like video games, movies, TV, social media, right, like, there
are all these other things as opposed to finding ways
to elevate reading. And I mean our kids, they really
do love reading. And I think it's in part because
(14:29):
we have pursued it as a family. Like I mean
I try to read, like at dinner every night, like
ten to twenty minutes. I eat faster than the kids
do and they're still eating and Kate and I are just
like looking at each other, so like we've been doing
this for years now, but we read as a family.
Right now, we're doing Wing feather Saga is like the
series that we're going through right now. But the kids
love it. I have literally said to them before, Hey,
(14:50):
if you disobey mommy again, we're gonna take away your
new library books. Yeah, like as a punishment, because that's
something that they enjoy doing so much. But I think
there are ways that we can elevate it throughout their lives,
as opposed to just having the expensive sort of carrot
at the end of the stick, you know. Yeah, and
if you're trying to do that with every book, that
get expensive real real quick. Sure, But I think that
(15:11):
the one time thing and trying to incentivize something to
try to build a habit that's one piece of the
puzzle maybe, and trying to help build that habit. It
makes me think, though, I like, I bribe my daughter.
I give her a free book, I'll buy her book.
It's a use book if she gets a hundred on
her spelling test. And so we work our butts off
to try to get a hundred on the spelling test
every week. And so that is a bribe of sorts,
(15:31):
but it's a bribe.
Speaker 1 (15:32):
Also.
Speaker 2 (15:32):
The incentivizes are not only to do well in spelling,
but to keep reading. So and I'm not even opposed
to just the pure cash bribe as well, just to
kind of like get the ball rolling, you know. It's
like like there needs to be an initial behavior change element.
Speaker 1 (15:45):
Yeah, and play. Well.
Speaker 2 (15:45):
The truth is we're human. And so if someone asked
me to stop doing a bad habit and I was like,
what's in it for me? And they were going to
pay me money to do it, I would breathe really
would my ears a perk up. I'd be interested. So
at first I think I revolted against the story. I
was like, that seems weird. At first, You're being judgmental. Yeah,
the more I thought about it, I was like, actually
that might make sense fair enough, Yeah, and kids respond
(16:06):
to those incentives or We've got more to get to
on this episode. And clear we're we're talking about expensive
mental health. We'll get to that and more right after this, Right, Joel,
we are back from the break and guess what it is?
Time now for the ludicrous headline of the week. This
one is from WBZ. This is a local more of
(16:29):
a local story, I guess WBZ in Boston. Listener Gary
sent this one our away. Thank you, Gary, and the
headline reads, fight over seventy thousand dollars engagement ring heads
to State Supreme Court. Sounds like there's some drama involved
in this one. Yeah, some relational drama. First of all,
that's one heck of an expensive engagement ring. Is it
still three months salary? Joel, you and I have said,
(16:50):
I don't know that we've demnked that a little bit.
But if that's what you're assuming, this guy's doing quite well.
He's a baller if that's the case. But the crux
of this issue of the story is whether an engagement
ring is a conditional or unconditional gift? Is it a
nice present? That the recipient gets to keep no matter what,
or is it more along the lines of, Hey, if
we don't get married, I'm expecting that ring back. Personally, Joel,
(17:14):
I'm kind of that thinking. It's called an engagement ring, right,
and so plus I can like picture that in movies, right,
like if you call off the engagement, she like takes
off the ring, hands it back. It's sometimes throws it
at his face, depending on what he's depending on what
movie that you're watching. But uh, yeah, what do you think.
I think if yeah, if you got someone an engagement present,
like a Oh I get you a purse because I
love you, or I got you a suit jacket because
(17:36):
I love you, whatever it is, that's that's cool, keep
that thing. But the engagement ring does feel a little different.
Although state laws around the country, as I looked into this,
they're all different. He didn't do this, yeah, they Oh,
they have different takes on whether or not it's considered
conditional or unconditional. Oh shut up, And sometimes it depends
on the behavior of the parties involved. And so I
think part of the reason that that this this dude
(17:57):
is essentially saying give him a ring back because it's
really expensive. But two, because he's he's insinuating that she
did things that were untoward and she's like, no, I didn't.
Speaker 1 (18:07):
What are you talking about?
Speaker 2 (18:08):
So I don't know where I side down this too.
I think I also decided to, like, all, if you're
not going to go through with it, it's called an
engagement ring.
Speaker 1 (18:15):
Should I'll give it back.
Speaker 2 (18:16):
It's like to me, it's an external signal of your
intention to get married, right, like, oh, and the story
said that he you know, they called it off, and
he called it off in particular here shortly after they
got engaged. It would be different if they had gotten married.
That's a whole other thing. Let's say they've been married,
even for like a couple of years. I would say,
all right, she probably gets to keep it, like you
actually got married, Like that was the intent behind the
(18:38):
engagement ring, is the signal that, like, we are going
to get married. But there's a difference there between just
being engaged, I think and actually getting married.
Speaker 1 (18:45):
Yeah, but I don't know.
Speaker 2 (18:45):
It's an interesting story, and you could find yourself in
some legal limbo. I guess if you are engaged and
it doesn't come there, And that just stinks to the
relationship fell apart. But that's a lot of money at
stake and another reason Matt to be a little more frugal.
Speaker 1 (19:00):
Think with your your engagement ring choice.
Speaker 2 (19:02):
You never know and evidently depends on in which state
you reside. Yeah, maybe that couple could have used some therapy, jol.
I'm sure they could afford it based on how much
it was a Tiffany's engager ring. Seventy thousand dollars.
Speaker 1 (19:12):
Yeah, so expensive.
Speaker 2 (19:13):
But there's an article this week about how expensive therapy
can be. We've as a culture, we've destigmatized mental health,
but that doesn't mean it's gotten more financially accessible. Although
more insurance companies are going to help to pay for
some therapy, that being said, most therapists don't take insurance. Yeah,
so it's kind of like the reservation skit on Seinfeld.
It's like, you know how to take the reservation, you
(19:35):
just not how to keep it. There's a disconnect here. Yeah,
and it's like, Okay, well cool, insurance is going to
pay for therapy, but nobody wants to accept it, and
then you're you're kind of stuck between a rock and
a hard place, right Like sometimes like oftentimes is it
I feel like the going rate. We've talked about the
sum with Emily being in school to be a counselor,
like one fifty a session does not see safeties like
table stakes. Now, man, oh, is it really Yeah? So
(19:56):
it's even more so. Yeah, and especially if you're a
couple going to Marrorg's therapy, we're definitely talking two bills
or more, maybe closer to two fifty. And so there
was this recent survey man, I found that something like
a third of people were going to therapy. Theyre felt
like they were being helped by it, but they felt
like they had to actually stop going to therapy in
order to save money because it adds up. I mean like, really,
you go three times a month, that's a that's a
(20:17):
car payment, the average car payment in the United States.
It really, it really can be quite expensive. And I
want to say this too because I think initially when
I when Emily and I were talking and I was like, oh,
you can get that much per hour, You're going to
be rolling in the dough. And she was like, well, well, one,
there's the time that it takes to go to school,
There's the money that it takes to go to school,
There's the facility that you have to rent in order
(20:40):
to see people. Although there's more zoom therapy now, but
there's like all there's the insurance you have to have
as a therapist. It's not like they're just pocketing one
hundred and eighty bucks an hour. And it's not like
you're working eight hour. It's not like a plumber, right
or I don't know, it's not like a lot we
have to drive to and from their jobs.
Speaker 1 (20:54):
Yeah, like there are.
Speaker 2 (20:55):
Periods of time when you're not working as opposed to
like I guess I'm thinking of a lawyer who can
build hourly and it's typically is like you just sit
there at your desk and you continue to work pretty much.
You know, you break for lunch and whatever else you
need to do. But yeah, you're not seeing like clients
back to back back exactly for nine clients in a day.
There's some big old gaps. Yeah, get those dollars signs
out of your eyes aol.
Speaker 1 (21:15):
Yeah, Yeah, I had to.
Speaker 2 (21:17):
I had to, like, oh I got, I got me
a sugar mama, right, I'd get I had to re
align my expectations there. But yeah, I think it's important
to mention that mentioned that that that's part of why
it's so expensive, But it's also sad that it's financially
inaccessible to so many people. So what should you do
out there? I feel like I would love to go
see somebody, I would love to do some talk therapy,
but it does feel like I can't do it because
(21:38):
how crazy expensive it is. Well, one check and see
if there are nonprofits in your area that offer discounted
access to talk therapy. Those exist, and those can make
a big difference. Check and see if your employer offers
access to mental health services or will pay for some therapy,
especially if you had a traumatic event. Oftentimes there's like
money from employers Matt that will help pay for some
(22:00):
of that. Some therapists, like I said, do accept insurance,
and others will charge on a sliding scale depending on
your income. So it's worth asking about that too. Maybe
you find out, hey, my insurance does cover some mental
health help, and I'm gonna do my darkness to find
a practitioner who accepts that insurance. And I think this
is maybe under sold too, But How'm I gonna talk
(22:21):
with a friend going for a hike or a walk
or something like that. I know they're not trained in
the same way, but that can actually be a free
way to unburden some of those things that you've got
on your mind, get you thinking about certain events in
a healthier way. Perhaps, what do you think.
Speaker 1 (22:35):
About again, I know it's not the same. I'm just saying, yeah, I.
Speaker 2 (22:37):
Get what you're saying, though, because I mean, sometimes you
just need space and for someone to kind of like
ask some questions. And I think part of the loneliness
epidemic that we were going through as a country is
because we're not hanging out with friends as much on
that people to talk. We feel like we need to
professionalize everything. And that's true. Again, my wife's studying to
be a professional there, but she's awesome at it. And
why are you talking down the industry, Joals. I'm just
saying like that, if we have had more people in
(23:00):
our communities and in our neighbors that we're more connected to,
we might find that we needed to professionalize that just
a little less. I totally agree on the note of
mental health. Put down your phone after work hours, folks.
This isn't going to be shocking, but a recent survey
found that responding to work emails after hours, it's going
to lead the burnout. Yet the majority of Americans are
doing this very thing because they feel like they have to.
(23:22):
And so is that actually true though, Like do they
have to get back.
Speaker 1 (23:25):
To their boss or do they just feel like that
or do you?
Speaker 2 (23:27):
Yeah, Like, if your boss expects that you're going to
respond immediately, even if it's dinner time, I don't know.
I might say it might it could be time for
like a heart to heart sort of conversation with your boss.
Maybe you can negotiate some new expectations on both ends.
But the truth is, and this is another story we
came across the c suite, the upper crust in the
workplace hierarchy. They are doing it, so maybe you should
(23:51):
consider it as well. More CEOs are migrating back to
dumb phones basically in order to reduce interruptions within their
within their workday. There is a bit of, uh, sort
of like an anti tech movement that's happening, Joel, and
I think embracing it, at least in moderation could help
your personal as well as your professional life. That being said,
(24:12):
I don't want people to think that they have to
spend more money on these new gadgets that are going
to cost you money. That are dumb. I saw that
the you know what I'm saying, the new light phones
coming out and the version three. What's what's the price
of the eight hundred bucks? Oh, it's the same prices
as my phone.
Speaker 1 (24:27):
Ridiculous.
Speaker 2 (24:27):
It's so stupid. And so this is where we can
fall into that trap of consumption and thinking that, oh,
I got to consume in order to fix all my problems.
But sometimes yes, certain tools are helpful and they can
allow us to achieve some of the goals that we're
looking to achieve. But don't forget about self discipline and
the fact that it's takes Like you can buy that
stupid phone, it's been eight hundred bucks on a light phone,
but if you don't use it, and if you still
(24:49):
go back to the one that's pinging you from work,
turn off your notifications. First of all, I think that's
a super easy way to minimize some of the distractions
and minimize interruptions in your personal life. But in another room,
to put it in the room, set like draw a
line in the sand and set some rules around so
when you try off notifications, like the badge notifications will
go away as well, like the little red number down
there on your email. I don't want to be notified.
(25:11):
I don't want there to be a banner that pops
up on my phone every single time that I receive
an email. And I know that we're maybe speaking from
a position of luxury jeel like, this is the ability
for us to be our own boss. Some folks out
there might be saying, well, good for you, guys, I
can't actually do.
Speaker 1 (25:25):
That, but I have a real boss.
Speaker 2 (25:26):
And he said, but what I guess what we're maybe
highlighting here is it is something that is worth fighting for,
and it's honestly, it is the number one reason to
consider working for yourself. And your boss actually might expect
that you're gonna reply quickly because you normally reply quickly,
and so you might have set an expectation by just
how responsive you've been. And so maybe that's part of
(25:47):
the heart to heart is saying, listen, I have been responsive,
but I'm trying to like detox some of the tech
that's happening in my life in the evening times. And
so you know, if you say I need to check
my email one time, I at nine pm before I
like hit the hay or whatever, maybe that's the one
thing you give on. But I'm not going to be
responding at all hours of the evening because I want
(26:08):
to enjoy that time. And you're right, I think what
is Australia that basically made it illegal for bosses now
to contact.
Speaker 1 (26:14):
You in the evening.
Speaker 2 (26:15):
I don't know if we need a law, but we
do maybe need more open lines of communication. And yes,
it makes me think of actually what happened this week
with with Amazon. We're living in a far less worker
centric environment than we were a couple of years ago.
Amazon is calling employees back to the office full time
starting in January, and there are some unhappy Amazon employees
(26:38):
out there, even though I think that I saw also
that they gave that Amazon employees now have free access
to Prime. Sorry, that's not gonna that's not going to
make up for the fact that you got to go
back to the office. I did see that part. I
was like, they I should have free access to Amazon. Yeah,
they didn't have it already. Come on, it was like
way too cheap. So it's not just Amazon. The percentage
of time the average American is working from home has
(27:00):
dropped actually quite a bit since twenty twenty, when of course,
that was the way a lot of business had to
be conducted. We just weren't doing anything in person. And
I think we're going to see more of this. I
think this Amazon putting the foot down five days a week,
you're coming back into the office or you're out of here.
Those sorts of ultimatums are ramping up. And then when
a company as big as Amazon does it that, we're
(27:21):
going to see more employers follow suits. It's true, and
the less competitive the labor market becomes, the more employees
are going to be forced to take it on the chin.
And we know that in office work leads to more
advancement and pay hikes, especially.
Speaker 1 (27:33):
For younger workers.
Speaker 2 (27:34):
If your work from home stat status starts to change
and you don't like it, though, tap your network for
better opportunities. And if you really really hate the idea,
it's really important to start ramping up your savings so
you have more options. So some of those those Amazon
employees that have a nine month emergency fund saved up,
they might say, screw you, I'm not coming back in.
(27:55):
I'm and we were talking to I was talking to
somebody last night who says, man, I working from home
has changed my life. I have more time for hobbies.
I don't feel like I'm run ragged at the end
of the day, and I think a lot of people
feel that way, and understandably so. So if that's of
crucial importance to you, pushback. But if you're still in
the I'm trying to advance my career, ramp up my
(28:16):
earnings phase, going back in could be the best thing
for you. I am surprised to see that though, Like
so before it was only they only needed to be
in like three days, three out of five days of
the week. Yeah, now they're adding those additional two days. Gosh,
it really does Like guys, I thought we hybrid we worked,
was working well. I thought it was going to work out,
but that no longer seems to be the case. Another
Amazon related story, they're actually trying to compete with my
(28:38):
favorite grocery storeageol Aldi. Amazon's unrolling their new Amazon Saver line.
It's the snow frills extremely affordable sort of line, which
sounds exactly like all these value proposition Yeah, it's still
a relatively small lineup of food products, but everything costs
less than five dollars. And Amazon they've already got some
of their own proprietory brands, but none of them have
(29:01):
minimized the price to this extent, that's for sure. Yeah,
they haven't really targeted the super cheap store brand thing.
They've had kind of their more high falutint semi fancy
organice brands and stuff like that. And now they're like no, no,
all the and llegal laser eyes on you, focused on you.
Speaker 1 (29:17):
Yeah.
Speaker 2 (29:17):
I mean there's been a lot made about gouging in
the grocery elles, but just the cost of eating at home,
like honestly, Doe, they have always been more affordable than
going out to eat. And this Amazon launch is a
reminder that while prices they're certainly not going back to
twenty nineteen levels, and we are seeing inflation come down,
but prices are not going to go back to where
they used to be. That being said, there's still a
(29:37):
healthy amount of competition across the grocery store spectrum and
where you choose to shop, which specific brands that you
choose to buy, they will be a determining factor in
your overall grocery budget. Personally, though, I will say I'm
not super impressed with what I'm seeing when it comes
to the Amazon stadth, I haven't ordered something, okay, being
I would love to see you trying totally just Canp's
(29:59):
look delicious? I'm totally judging a book by its cover.
It just looks super generic and discounted. Whereas like when
I go to All the like all the and Costco
feel value driven to me, and especially Costco right like,
because you're getting like they have some nicer brands.
Speaker 1 (30:13):
You're saying, it feels more like a dollar store product.
Speaker 2 (30:15):
It does, it does, and so you're paying a similar
price as what you might pay at All the but
it feels like you're getting something that that's even cheaper. Yeah,
So I don't know. Maybe I will just be an.
Speaker 1 (30:24):
All the loyalist for whatever I think you will be.
I'll give it a shot.
Speaker 2 (30:28):
I'll see if there's something there that where I can
do sort of like a beta test, like compare some
apples to apples. Okay, not literally, they don't really have
apples this Amazon Savor line, but yeah, like canpis to canpis?
I guess, sure and report back, let us know what
you think. But I think more than hey, look at
this great new, super cheap, awesome food product from Amazon.
(30:48):
It's it's more of a kind of what you were saying,
highlighting the fact that they're having to compete with grocery
stores that have cut costs significantly, that are saving consumers
money regularly, and Amazon's like, well, we don't want to
get it left out completely, get left in the dust
by the Aldis and the leadals of this world. Right,
speaking of hiking grocery prices, though Matt new Data finds
it the coffee prices have been going up significantly. All Right,
(31:11):
I guess I'm just gonna pay more. Yeah, I get so,
are you?
Speaker 1 (31:13):
Is that what's gonna happen?
Speaker 2 (31:14):
Like you're gonna buy the fancy stuff, no matter what
are you gonna it's coffee. Coffee is like a non
negotiable man, Like, would you if the that's like one
of those inflexible it doesn't matter what the price goes to.
Almost yeah, Like I think I would still consume coffee.
I think there's a lot of parents out there and
a lot of workers who would be like, yeah, I
still got to get my coffee. You're not going to
like pull a Tim Ferriss and just cut caffeine out
of your life.
Speaker 1 (31:34):
Did he do that?
Speaker 2 (31:34):
I think he did Oh yeah, I don't think I
could do that. I think he said he slept better.
But like, yeah, so we've already seen those prices going up.
My bag at Costco went from like ten bucks to
fifteen bucks over the course of like a year, and
it might be going up even more. And at risk
of being those idiots who tell you to drink your
coffee at home because that's what's gonna allow you to
(31:56):
retire ten years earlier, which of course it's not. But
drink your coffee at home, because it's the more you
do that, the more it will save you money. Jill's like,
I'm saying, I'm not going to say the thing, but
then I'm going to say the thing. It is just
if you can play if you're paying five bucks a
pop for coffee, and how you complain about the price
of coffee and you do that five six days a week,
expected does that?
Speaker 1 (32:16):
It does matter?
Speaker 2 (32:17):
And I still think there are ways to enjoy your
nice cup of coffee out Like it's been a minute
since we've talked about this. You and I we still
every single Monday walk to our favorite coffee shop.
Speaker 1 (32:26):
And enjoy an espresso drink.
Speaker 2 (32:28):
We do it once a week, once a week, and
it makes it feel like a treat. And I think
if you do it five or six days a week,
it feels like the routine and something you expect. Then
start it starts losing its luster. You can make a
fine cup of coffee at home. In fact, man, I
feel like sometimes the coffee you're making is better than well,
like a lot of the local coffee shops are promo
thank you well just because like you, you dial it.
Speaker 1 (32:46):
You've kind of dialed in. Man.
Speaker 2 (32:47):
You've got a very scientific approach to how you make
your coffee. You read a loss of words because you
didn't know the term birgrinder.
Speaker 1 (32:54):
That's what it is.
Speaker 2 (32:55):
It No, it's more than that, because you're getting the
you're geting the temperature at the right, you're talking about
the special kettle, the number of rams of coffee.
Speaker 1 (33:01):
I'm just like, that's more my style. Man.
Speaker 2 (33:03):
I get into my coffee maker and hoping it turns
out okay, I have to research it, figure it out,
and then for the rest of my life I get
to do this thing at a discounted rate. You don't
have to do it that way, but know that ultimately
it might save you some money.
Speaker 1 (33:14):
Yeah.
Speaker 2 (33:15):
Well, before we wrap things up, let's give a quick
newsletter referral shout out to Megan C. Meghan, we really
appreciate you sharing the how to Money newsletter, which comes
out every Tuesday morning, to some of her friends who
she loves the most, or maybe family members. That's the
ultimate expression of love, is to share a newsletter that
matters to you with the people you care about, right.
Or a podcast, Yeah, or even a website how tomoney
(33:36):
dot com. That's where you can find our show notes
for this episode and the different stories that we discussed.
But buddy, that's going to be it for this episode.
So until next time, Best Friends Out, Best Friends Out.
Hosts And Creators
Joel Larsgaard
Matthew Altmix
Popular Podcasts
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.