Simply Money

Episode Transcript

(00:06):
Today we're pulling back the curtain.The most common issues that we see were
the first time client and maybe whatyou can learn from that experience. You're
listening to simply money presented by allWorth Financial. I mean me Wagner,
along with Steve Ruby. Steve,you can correct me if I'm wrong or
you've experienced this a different way.But what I find is most people,
at some point and their sort ofadult lives, when they're earning money,

(00:31):
come to a point where there's anissue and they're just not sure about it.
They kind of know maybe they needsome additional help, but it takes
that thing to get them over thehump and make the call to say,
okay, fine, I'm coming in. And I think the reason why so
many are so reluctant about it isbecause it feels really uncomfortable to get financially

(00:53):
naked in front of someone. Andthat's what we're asking people to do,
right, We're saying, okay,let us see your wards and all the
mistakes you've ever made in front ofyou. And I think for a lot
of people, there's some shame,there's some guilt, there's a feeling of
like I should have never done this. And someone's going to judge me for
it. So if you've ever feltany of those things, like, let's

(01:15):
levels that you are not alone,Yeah, this is very natural if it's
your first time sitting down with afinancial advisor. So just just some ideas
about what to expect. Now,First of all, there are different types
of advisors that exist in this world. There's those that work for discount brokerage
firms, there's those that work forbanks, there's those that work for registered
investment advisors. You know, keepin mind we've talked about this before.

(01:37):
If you're sitting down with a commissionedsalesperson, then the feeling of that meeting
might be a little bit different thenif you're sitting down with a fiduciary financial
planner for a registered investment advisory firm. But at the end of the day,
you should expect to be asked questions. As advisors, we need to
know more about a person's financial situation, their needs, their goals to really

(01:59):
understand if there's ways that we mightbe able to help. So first things
first, expect that you do needto be vulnerable, you do need to
answer some of these questions, andthat's really the first step One of the
things that I like that you dois to actually start by saying, do
you mind if I ask questions right, kind of just to get permission,

(02:20):
and Okay, let's get in themindset that he's going to start asking me
some questions about money. I thinkthat most of us would like to think
that our emotions are not as tiedup into our money and our financial situation
as they really are. I mean, there's been research done by this.
There's more than twenty seven different emotionsright that we can categorize. And I
think it's really tricky is you canfeel several emotions about the same thing at

(02:46):
the same time. Some of themcan be positive, some of them can
be negative. Just a couple ofweeks ago, when we came into the
office, her husband had always handledtheir money. He had passed away several
years ago. She was managing thingson her own, and she knew she
was kind of losing control. Sheknew there was a couple of major decisions
that need to be made with hermoney and she wanted help on it.

(03:07):
When she came in, she seemedsuper confident. You know. We talked
through some things. But the interestingthing is when we left she said that
wasn't so bad. I was nervouswreck about this. She hit it well,
but she was really nervous coming into have that initial conversation, and
I think many are. And thenonce you kind of leave, it's like,

(03:30):
oh, I actually feel much better. I'm starting on a path to
have a plan for you know,what I'm going to do with my money.
And maybe the questions weren't as probingor I wasn't as embarrassed as I
thought. So I would say,if you have any of these kind of
emotions built up in your brain oryou know, holding you back from actually
getting the kind of help that couldtruly help you understand, it's likely not

(03:53):
going to be as bad as yourthinking. Yeah, that's a great point,
and to echo you, I wouldsay the two biggest emotions that I
see when people come in and sitdown for the first time. One is
nervous, and some will admit toit, some will hide it. The
other is ashamed of mistakes that they'vemade in the past and having somebody highlight
those mistakes. Now, there's waysaround that. I mean, what's in

(04:14):
the past is what's in the past. Financial planning is about maximizing the resources
that you have today, maintaining thelifestyle that you want to live while making
sure that your money lasts through retirement. So whatever you did in the past,
that is what it is. Ifwe need to identify ways to close
gaps with different strategies or different advice, that's fine. That's part of how
you work with an advisor. SoI would say, you know, outside

(04:38):
of emotions, which is obviously tiedto a lot of this, that there's
also more common financial issues that manyfolks that sit down with an advisor for
the first time are sharing. AndI would say some of those the highlight
would be not having a uniform investmentstrategy. And this is caused by having
accounts spread out all over the fromold four to one k's old iras,

(05:01):
stock that you have in this account, mutual funds that you have in that
account. That can create complications whenit comes to building that uniform investment strategy
that gives you the level of riskthat you need to take to meet your
goals and that you can afford totake based on your financial situation. You're
listening to Simply Money presented by allWorth Financial. I Meani Wagner along with
Steve Ruby as we're kind of pullingback the curtain for you today and say,

(05:23):
hey, if any part of youhas thought recently that maybe you need
to go in talk to a fiduciory financial advisor, right, that's what
we would recommend someone who's putting yourbest interests ahead of theirs, and you
have concerns about that, let's justtalk through what that could look like.
You don't even have to walk inthe office, and we can at least
tell you what you can expect.I think if we're going to talk about

(05:44):
kind of what we see as issues, there's two different perspectives. There's one
from the investor that's coming in,and what I've found through the years too
is there's usually some triggering event,some kind of debt that they didn't expect,
some kind of an inheritance that's comethrough, some kind of question about
cleaning Social Security, and then yeah, oh oh, that's a fantastic one,

(06:06):
right, major life changes, losingsomeone, losing a job, right,
and it's like, wait, whatdo I do now? So there's
a reason why you end up comingin to talk to someone. But then
from our perspective, once we startto dig into things, uh, there's
usually other issues that we uncover that, by the way, many times can

(06:27):
be corrected, some more easily thanothers. You know, Steve, you
mentioned not having a uniform plan.You know, you and I were talking
to someone last week who thought shewas really conservative in her investments and then
found out one of those investments wasninety six percent in stock. She didn't
know, you know, it's exactlyright that moment, and she was like,
wait, what you know I wasled to believe otherwise, you know,

(06:49):
and that that same investor had beenhad been pushed by a commission someone
selling a commission product to her thatthat was the way to go. And
she knew that was isn't the wayto go, but she wasn't sure what
the path forward was, right,And so we find that there's often a
trigger situation that brings someone in,but it gives a fiduciary then the ability

(07:12):
to look through and say, okay, how can we get you to where
you need to be? Yeah,A good financial planner is going to help
you navigate, you know, buyersremorse, for example, if you've purchased
products or solutions, loaded funds,annuities, different healthcare, or different life
insurance products that is that you quitefrankly maybe didn't need, and some kind

(07:34):
of an advisor in quotations that wasactually a commissioned salesperson got a commission to
sell you something that didn't necessarily fitin with your plan. And that's that's
where some of that shame comes in. Sometimes people know that they have something
they don't need, but sitting downwith a fiduciary financial planner can can make
you understand the path forwards. Iwant to make something else clear. When

(07:56):
you're sitting down with this person,it's kind of a mutual interview process,
right. Both sides are saying,are we a good fit for each other?
And if any part of you justfeels like, I don't know,
like I'm not clicking with this person, I don't feel like they're really hearing
me or getting me, it isokay to leave and not to go back
there. And I also think partof that initial conversation has to be a

(08:18):
very direct question about how that financialadvisor gets paid. And if you feel
like they're not being clear, ifthey're tap dancing around this one, I
would also say you need to tapdance your way out that door, right
because this is something they should beold truck clear on and again back to
the shame. There's so many peoplewho feel like I'm not comfortable asking someone

(08:39):
how I'm paying them. It's yourmoney. You owe it to yourself.
You know, I find joy inasking that question. But maybe I'm a
minority here, but you do oweit to yourself. So, especially if
you're interviewing multiple advisors, what youshould be you know, you should do
research. You should maybe ask aroundfriends and family who do they use,
coworkers who do they use, youknow, and somebody that you're comfortable with.

(09:01):
But make yourself comfortable, even ifit takes a try or to to
ask how do I pay you?And how are you paid? Because those
are different questions. How do Ipay you might be percentage of assets under
management on assets being managed, Itcould be a flat fee. How are
they paid? It could be asalary, it could be commissioned. And

(09:22):
there's big differences in how an advisoris paid will drive the behavior as far
as the solutions that they offer you. Yeah, it's like question one A
in question one B, right,what are you getting from me? And
then how is where you work payingyou? And I think you have to
have that complete picture in order tomake a good decision whether this person fits
for you. Okay, so whatif you get through the whole, like

(09:43):
getting financially naked, you do feelsome relief, there's a plan in place,
and you're going to kind of moveforward. We want to also let
you know, Okay, what doesthat relationship look like after that. One
thing I would say is you shouldhear from that person. In fact,
at the beginning of the relationship,I would say even more than you will
down the road. Close family friendworked with what they thought was a financial

(10:07):
advisor. Never ever hear from thatperson, never unless they're reaching out to
take a distribution or something. Andit makes me want to pull my hair
out because it's just not the waythis relationship would go. If this is
a fiduciary, you should expect tohear from them. And Hey, there's
going to be times when you getnervous, whether it's the presidential election this
year and what if this person getsinto the office, or you know,

(10:30):
volatility in the markets and all ofa sudden you're thinking, oh, should
I change something. We saw that, you know, when COVID first started
in February and March of twenty twenty, every advisor in our office was attached.
It was like we had to surgicallyremove the headsets from heads because there
were so many people calling in soconcerned. And you know, the number

(10:50):
one goal should be that we don'tlet you make financial decisions that you can't
recover from. Yeah, protecting youfrom yourself, especially when it's an emotional
decision. And I do want togo back to especially in the first couple
of years of a relationship, whenyou're working with a fiduciary financial planner,
it's not just your investments, butit's your insurance, it is your tax
filing and tax planning. It isyour state planning, it is your retirement

(11:15):
planning, it's distribution planning. Sothat's why you have multiple meetings throughout the
first couple of years to make surethat you have that solid financial plan moving
forwards that will enable you to haveinsight into understanding what you need to do
for your plan to be successful,and usually that's writing it out no matter
what the markets are doing. Sofinding that sweet spot with your investments is

(11:35):
very important. Yeah, I thinkthis first couple years is like how you
build how and when you build thatfinancial foundation. It can always be changed,
but at least it gives you astarting point in a building point.
Here's the all Worth advice. Ifyou do get skittish right when you see
market volatility, when you have questionsabout what to do with your money,
well, the best thing you cando, I think, is find someone

(11:56):
that you can trust to work withwhose job is to help you a lot
the way by not letting you acton emotion. Coming up next, we've
got an overlooked retirement tool that couldalso lower your tax bill. At the
same time, you're listening to SimplyMoney, presented by all Worth Financial.
Here in fifty five KRC the talkstation, you're listening to Simply Money,

(12:18):
percented by all Worth Financial, IMemi Wagner along with Steve Ruby. If
you can't listen to our show everynight, you do not have to miss
a thing. We've got a dailypodcast where you just search Simply Money.
It's right there on the iHeart appor wherever you turn to to get your
podcasts. And coming up at sixforty three, we're taking questions about iras,
four one k's and social Security.These are some of our most asked

(12:41):
questions and we will ask the advisor. You know, we all know,
the earlier you start saving for retirement, the faster you're going to get there.
One way to do that is,of course, to have that paycheck
that helps you save. And youknow, the reality, the stark reality
of it is some jobs are goingto be better than others that help and
you get there. I am raisingmy hand right now because I was a

(13:03):
journalism major and I made sixteen thousanddollars my first year out of college.
Now, I don't know, adjustedfor inflation, maybe today that would be
twenty two thousand. It wasn't alot of money. Investing in a floor
to one cake really wasn't an optionfor me. In fact, paying all
of my bills was a really anoption either, barely an option for me.

(13:24):
So there's some new research out thatshows, hey, there's certain majors
that you can look at in collegethat are going to be better for these
things than others. Yeah, NewYork Federal Reserve analysis revealed the worst paying
college majors five years after graduation.So this is kind of setting the expectations
moving forwards. And this is animportant conversation to have with children, grandchildren,

(13:46):
those that are younger than you andyour life that are thinking about majoring
in liberal arts, performing arts,theology. Those three make an annual income
of around thirty eight thousand dollars peryear. A few others leisure, hospitality,
history, fine art, psychology.They hit that forty thousand dollar mark
or last per year after five yearsin that field. So one of my

(14:09):
nephews actually was in leisure and hospitalityworked at a hotel downtown for several years.
First of all, did not getpaid much. Second of all,
the hours were insane and he workedso hard. I mean he did every,
hope, like every job on thathotel, from valleting to helping set
up catering, you know, tocleaning rooms, every single thing. And

(14:30):
after a few years of that,he took a higher paying job at a
completely different industry, and even thoughhe really liked the concept of, you
know, hospitality and helping other people, it just didn't work for him long
term. Right, So I thinkthere's one way to just understand if you're
looking at these majors the reality ofwhat you're going to have when you get
out five years later, but alsocould these things be passions that you can

(14:52):
pursue on the side while you're actuallygetting a decent paycheck at the time,
which, by the way, ifyou're looking for that decent paycheck, well
then you need to look at somethingmaybe in science, technology, engineering,
math, those stem fields, whichunfortunately isn't where my brain goes. Those
aren't my favorite things. But youknow, the highest median income right after

(15:15):
college computer engineers eighty grand a year. That's right, and pey grows up
up to one hundred and thirty threethousand dollars by the time they reach somewhere
between the ages of thirty five andforty five years old. Now we're not
saying that every decision that you makein life needs to be made through the
lens of the financial impact of it. But I don't think you can underestimate

(15:35):
how important it is, and maybenot necessarily your major, because I think
you can pivot away from those things. I think some jobs are just looking
for a college education. But Iwould say, you know, and I've
changed. You know, I wentfrom journalism to then finance and and have
built a fantastic career and I loveit. I got into journalism because I

(15:58):
liked helping people and giving it information. That makes a difference. Now I
get to do that when it comesto their money, right, So I
don't think you have to be laserfocused on maybe the normal career path for
that major. This is going tomake a big difference though. The challenge
in this day and age, though, is the rising cost of education.
Yes, of continuing education. Itis through the roof more than it's ever
been before, so it is somethingto take into consideration. I'm all about

(16:22):
making sure you live a happy lifedoing the things that you want to do,
but you need to be realistic aboutwhether or not you can pay for
that education, especially if you're onlymaking thirty five thousand dollars a year.
Fantastic point. One of the thingsthat we do on the show every day,
right, our goal is to makesure that you are educated on every
aspect of smart financial planning making smartdecisions with your money. And I think
one that is probably the most overlookedthere is taxes. This is not tax

(16:48):
preparation that you do you know aroundApril. This is like tax planning and
it can be incredibly strategic and theseare ways that you can keep more money
in your pocket while also taking bettersteps to plan for your future. Tax
planning sounds terribly boring. But ifyou look at it through the lens of
finding ways to poke Uncle Sam rightin the eye with a stick, that

(17:11):
sounds a little bit more fun.And that's what we're doing when it comes
to tax planning. So one overlookstrategy is a spousal IRA. This could
be wroth or traditional, and thisis for a non working spouse that has
no access to any other retirement vehicle. You are still able to contribute on
behalf of that spouse with your earnedincome into that spousal IRA. This one

(17:33):
catches people off guard. I meanmy son yesterday, My fourteen year old
was just saying, hey, Mom, soon, can you help me with
investing? Which I thought was supercute, But I said, hey,
what you I'm happy to help youwith investing. You have to have a
job to start to put money intoan IRA first, and that is true

(17:53):
unless you're married and you are filingtaxes jointly with your spouse, you don't
both needed income. You can actuallypull from that working spouse's income to set
up a separate IRA for yourself,which means more money is going to saving
and investing and compounding for the futurefor both of you and that can make

(18:15):
a lot of sense, and fromthe tax planning perspective as well. If
it's a traditional IRA, that contributioncan be deductible, which means that you're
deferring paying taxes on those dollars untilyou start taking distributions out from the account.
Later. On the flip side,you could do a roth spousal IRA,
which is not deductible, but thosethose earnings will be tax free as

(18:38):
long as the account owner is fiftynine and a half at the time of
distribution and it's been open for fiveyears. Yeah, well, and you
can lower your taxable income right byputting it into that traditional IRA. So
there's lots of strategies to think throughthese things. So this is why I
think it's just important to know whatyour options are because it would easy be
easy to think, well, thisis working and one of us isn't.

(19:00):
So only that person who's working hasthe option to put money into these accounts.
This is one of those kind ofrare gifts from the government. It's
also rare that it's just common sense, right, how can we we have
a retirement crisis in this country?So how can we help working families get
there and get there well, sohuge proponents of these. If you have

(19:21):
someone in your household who stays home, look into this. This can make
a lot of sense for you.Here's the all Worth advice espousal Ira can
be a great retirement tool for some. Make sure you work with a qualified
financial pro who can provide you withthe pros and cons for your particular situation.
Next, we're looking at one ofthe most economical ways you can make
a major overhaul on your home.You're listening to Simply Money presented by all

(19:45):
Worth Financial here on fifty five KRCthe talk station. You're listening to Simply
Money presented by all Worth Financial AmmiWagner along with Steve Ruby. Okay,
so maybe in the next d ortwo you're thinking, I'm gonna make that
jump. I'm gonna put my houseon the market. So what can I
be doing now? What kind ofupdates would give me the most return on

(20:08):
my investment. I'm not going totell you what to do, but our
real estate expert Michelle Sloan certainly willbecause she knows all these things backwards and
forwards. Of course, you cancatch a show right here on fifty five
KRC every Sunday Sloan sells homes.She is owner of Remax Time. She
is a veteran in the real estatemarket. So where do you start when

(20:29):
you're thinking about putting your home onthe market. You know, it's funny
because I love to look at Zilloand I love to look at just all
the different listings on MLS, andI see certain pictures and I'm like,
oh, that house is so pretty, and it's because they're staged well and
they just look so great and soclean. So how do you get to
those kinds of staging decisions? Well, it doesn't come overnight for most people.

(20:52):
Most people the way that we liveis not the way that we want
to present ourselves when we are sellingour home. So honestly, I tell
people, let's start thinking about it. If you're thinking about moving anytime in
twenty twenty four, maybe you shouldthink about doing some neutralization inside of your
home, making sure that you're gettingrid of as much clutter as possible.

(21:15):
But the most economical thing that youcan do is paint, because if you
have not painted inside of your homein the last twenty years, I'm sure
it's time. Because we live inour homes. If you have kids,
or pets or anything like that.We're all bouncing into the walls and kids

(21:36):
are just messy anyway, so thehallways get beat up really bad, and
the staircases and everything. So updatingyour home paint is the most economical,
but you want to be really carefulbecause some colors are a huge turnoff and
we're going to go through those.You ready. It's so funny that you

(21:56):
say this. You know, Ijust built a home. We've been in
it a little over two years,and I was like just coming out of
one of my kids rooms the otherday and I was like, oh my
gosh, what did you like runover this with a lawnmower? Like what
did you do to the like theyou know, the wood at the bottom.
And I'm like, okay, andyou know that our dog has scratched
at every door. So even thoughI think we have good neutral colors,

(22:18):
it still looks like we've lived therefor a million years and we chose gray.
Is gray still the answer? No? You know, not really,
gray is still fine. I mean, I think you're gonna find that gray
is going to last a while.It's one of those colors that if you

(22:42):
chose a gray that's really stark andreally clinical and really harsh, like a
you know, really hard gray that'sgoing to go out a lot sooner than
something in the gray's family that hasa little bit of browns undertones to it.
So you know, that's that's funnybecause it's it's definitely the question everyone

(23:03):
is asking, is gray in orout? And it's it's definitely on the
way out. If you're choosing flooring, don't choose a gray floor I recommend
again it's always something traditional, soa lighter color would. I probably wouldn't
go with an oak because that tendsto get really yellow. You know,

(23:25):
you want to do something, andthere are so many flooring options. If
you get into flooring, forget aboutit. I mean, there are so
many options in luxury vinyl tile,and it's there's so many flooring options that
are so they're easy to take careof and they will last for many,
many years, and I think that'swhat people are looking for. So if

(23:45):
you're planning to do any updates whenit comes to the flooring or the pink
colors, neutral is best, andneutral means your whites you're very light.
If you're going to go grayish,a little grayish, warm neutrals, beiges.
So those are the kinds of colorsthat really are going to stand the

(24:06):
test of time. And so thoseare the things now, the colors to
avoid completely. Now, Amy,your new house certainly doesn't have any red
walls, right, No, Butit's funny that you say that because the
accent walls. We don't have anyaccent walls in our house. But I've
heard of more people starting to dothose again. And usually people choose those

(24:30):
kind of bold rights, like anavy or a bright blue or a red,
and I've heard of people doing thata little more often. So I'm
kind of wondering what your take ison that. Yeah, interestingly, So
the trends for twenty twenty four,the most off putting colors the ones that
people don't like red fifty three percent. A lot of us in the last

(24:52):
twenty years maybe had a red diningroom that was all the rage for a
while, or a red kitchen.Yeah, that's because that's so out And
when I walk into some homes again, if they haven't painted in the last
twenty years and you have a reddining room or a red kitchen, my
eyes pop out of my head andI say, okay, we really need

(25:15):
to tone that down. Some othercolors that are out lime green. My
daughter had lime green in her bedroomand we said, okay, that's We
knew that that would only be aphase and it would have to go at
some point. Any yellows. Yellowsare just off putting if they're not done

(25:36):
in a very mild manner, ina way so bright bright yellow. Forty
percent of people say that that's aturnoff. You don't want to paint your
home a color that will be aturnoff to the general public. Now,
if you love it and you wantcolor in every single room, you just
have to understand that there's a reallygood chance that your real estate agent is

(25:57):
going to say, okay, inyour best interest to get the most for
your home, the most money whenit comes to selling, you may need
to neutralize those colors. So somethinga little trendy with a little bit of
blue in it, or maybe alittle bit of blue green, triquoise.
Just it's got to be so subtle. And the accent walls are coming back

(26:21):
again. You're right, but thoseare easy if it's just one wall,
right, Okay, Well, letme ask you about this. I've seen
more and more people painting like cabinetor painting islands in like a like a
green or a blue. What arethe trends that you're seeing for kitchens?

(26:41):
Is that a thing or is thatgoing out? Well, cabinet tree has
been painted for the last ten yearsor so. Most people that have had
this typical wood cabinets have painted themeither white or gray. The color to
is black cabinets. Again, I'ma little bit leery of going in the

(27:04):
black category because again, it's sobold and it's not going to be everybody's
taste. But if you love it, you love it and you're going to
stay there for a while. Totallycool. But yeah, so as far
as cabinetry goes, there are soit's so much easier now because there's products
available so that you could do ityourself. But it's you know, again,

(27:26):
stay in the neutral family if becauseif you paint your cabinets, you
can't go back. You can't goback to the wood. So think about
if you're not real handy or artistic, maybe you should put the paint stick
away, put it away rates orhire someone. We have friends who just
bought a house and they said,we're going to paint the cabinets ourselves,
and I said I have the numberfor someone and they said, no,

(27:48):
we've got this. A week laterthey texted and said, give us the
number. I thought, well,that's probably a good call. One more
question really quickly, Michelle, becausewe've been talking about paint, and that's
a that's a more expensive thing thatyou can do in your home. But
what about appliances. What is thetrend there? If someone's thinking about putting
their home on the market in thenext few years and updating appliances, where

(28:08):
do you go. Is it stillstainless Yeah, stainless steel, Well,
I think always dominate the kitchen appliancespace. But some of the old school
colors are coming back. It's sofun. The avocado cream color that you
may remember from the nineteen seventies iscoming back. I think that you know

(28:30):
what it's. It's manufacturers, appliancemanufacturers like, Okay, what can we
do to make people excited about appliances. Well, let's do a whole line
of different colors. We're seeing scorchedorange, avocado cream, a yellow pepper,
a misty blue. All of theseare kitchen aid colors. It cracks
me up that is not going tolast. But if you love it again,

(28:53):
great, If it fits into yourmotif in your space, fine,
But if you're selling, if youbuy the avocado cream today five years from
now, that is going to looklike puke. Well. And I think
you've been very consistent with this,Michelle and saying listen, if this is

(29:14):
something that speaks to you, doit. Make the investment. If you're
going to be there for a longtime. But if you are thinking along
the term lightlines of you know,I'm going to sell this home in the
next few years, then you don'tgo with a super trendy thing, or
you don't go with the thing thatspeaks to you. You go to something
that's more traditional, something that's morelong lasting. And I think these are

(29:34):
all great tips on how to updateyour home, not only for yourself,
but maybe for the next person who'sgoing to live there. That's Michelle Sloan,
a real estate expert from Mariemax.Time you're listening to Simply Money presented
by all Worth Financial. Here infifty five KRC the talk station. You're
listening to Simply Money perscented by allWorth Financial. I mean ne Wagner along

(29:56):
with Steve Ruby straight ahead reasons whyyour credit card is not a good option
when you should not pull that creditcard out. We'll get into that,
and if you've got a financial questionyou want us to answer, there's a
red button you can click on whileyou're listening to the show. It's there
on the iHeart app. Record yourquestion. It's coming straight to us sin
tonight. Our first question Casey inSpringdale. Hey, guys, my wife

(30:18):
and I want to buy a home, but since we're a little short on
the down payment, we'd have topay PMI should we still go through with
the purchase? It's a good question. I mean, sure, as long
as you can afford payments and itdoesn't hinder your ability to save more in
the future. I would say,especially in this day and age where if
you are going to land in thehome that you're going to be in for
a long time, and it's adifficult time for some of us because there's

(30:41):
not a lot of sellers with interestrates where they are. I think that
it's worth exploring buying the home thatmakes you happy. But again, as
long as you can afford the paymentsand it doesn't hinder your ability to save.
I'm going to disagree with you.There are certain dirty words to me,
and one of those is PMI,and I feel like if you have

(31:02):
to pay PMI, it is asymptom that you probably cannot afford that home.
Because we would say the best wayto put yourself in the best financial
shape to buy a home is tohave twenty percent to put down, right
absolutely, When you don't have twentypercent to put down, that's when you're
looking at PMI, which to meis kind of a tax on stupidity.
Okay, maybe not stupidity, butit's a tax on either being too impatient

(31:26):
to have the money or you know, not saving well. So I would
say, unless this is the dreamhome, you're going to stay in it
forever. There's no other options,right you Just you can't wrap your head
around passing up on this house financially, I would say, you probably can't
afford this house and you should probablywait. Right my two cents, Yeah,

(31:48):
I mean it's long as it doesn'thinder your ability to save and you
can afford to payments. And that'sa big if. So you know,
I'm I believe what I say.But you do bring up good points.
You really do well. Thank you. Next, we've got Rob from Edgewood.
Thanks for taking my question. We'veheard of a social Security strategy called
filing a restricted application to boost ourbenefit. Is this something you recommend using?

(32:15):
Uh? Sure, if we could. I mean, unfortunately, this
is something that's ended in the endof twenty twenty three. I mean,
the people born before nineteen fifty four, it could be grandfathered into it,
but the whole goal this was toallow the qualifying spouse to collect spousal benefits,
only deferring their own benefit until theyreach the age of seventy to collect
that later. We do a segmentall the time that we call retirement factor

(32:38):
fiction. I could probably we couldprobably spend the rest of our lives doing
factor fiction on Social Security questions.Because it's such a convoluted program, there's
so much misinformation out there. SoI'm not surprised that you've probably heard someone
talking about filing a restricted application.It was an option a few years ago,
and it did make sense for alot of people. It's just not

(33:00):
an option now, so, youknow, not something worth looking into,
but definitely it is worth looking intowhich filing, which way to file makes
the most sense, and also whenthe timing is best for you right.
Getting social Security decisions wrong can meantens of thousands of dollars lost over the
course of the rest of your life, So this is when you definitely have

(33:22):
to get right. Next, I'vegot a question from CS who lives in
Claremont County. Hi. I'm sixtythree currently claiming Social Security. I do
also have legal custody of my granddaughterwho's five years old. So if something
were to happen to me, canshe get any of my Social Security?
Yes? So as long as yourgranddaughter, as long as you have custodian,

(33:43):
and you have custody and you arethe legal guardian, then if something
were to happen to you, meaningif you pass away, then up to
seventy five percent of that benefit cancontinue for your grandchild until they hit the
age of eighteen, unless they arestill in high school or disabled in some
situations, and those payments can extenda little longer. All right. Next,
we've got Nicholas Springfield Township. We'vereworked our budget, so we're going

(34:07):
to max out our flour owing ksand iras this year. Is there anything
else we can do to save forretirement? I love this question. First
of all, good for you,guys, Nicholas. You are like official
super safer status and that's really impressive. I would say a health savings account,
and I would say maybe that healthsavings account might even make more sense

(34:27):
than the IRA, and it's becauseit's triple tax advantage. So you just
have more flexibility with this account thanyou do with others. And of course
that all hinges on whether or nota high deductible health care plan actually makes
sense for you. But if itdoes, I would say, next step
on this, like super saving journey, do the research, figure out if
an HSA works for you, andthen make sure that money is invested and

(34:52):
if at all possible, pay foryour healthcare expenses now out of your emergency
fund. Then you're just pushing thatmoney forward to retirement. You're going to
have high health care expenses in retirement, and if you don't, you take
it out and you pay standard taxrate on that and it becomes like a
de facto for one. Okay,so lots of reasons. This is only
if you actually have a high deductiblehealth plan to be to be eligible for

(35:15):
one. If not, then welook at an after tax brokerage acount,
a tod account as you call it, or a joint account between you and
your spouse where there are no limitson earnings and no limits on contributions.
It's just not tax deferred like youriras. Or for one case coming up
next, why whipping out that plasticfor emergency payments isn't your best move.
You're listening to Simply Money presented byall Worth Financial here in fifty five KRC

(35:36):
the talk station. You're listening toSimply Money present by all Worth Financial.
I mean you wag you're along withSteve Ruby. You know, we talk
often on the show about credit cards, right there are a tool if you
use them well on certain purchases andyou pay off that balance every month,
you can maximize the points or rewards. So lots of reasons why we would

(35:59):
say absolutely pull out that plastic.Also, there are times when we would
say keep that plastic in your pocket. Yeah, I mean, at the
end of the day, the emergencyfund is the most It's one of the
most important things about having a solidfinancial foundation, because if we have to
rely on a credit card to payfor an emergency, you know, you
can run into issues you might notbe able to cover every unexpected expense with

(36:21):
that credit card. A contract ormay not even take a credit card.
Maybe more importantly, you know rightnow and in the past, we've of
course seen some very high interest oncredit cards, and if we're not able
to pay that off, then thatcan create an issue where that debt just
snowballs. I think so many timeswhen we are faced with a difficult decision,

(36:44):
financial or not, it's like,what is the lowest hanging fruit,
what's the easiest thing I can do? Then you go, you know,
fast forward a week, a month, a year down the road, and
you're like, I wish I haddone X. Right. It's so clear
to me now that that was notthe best option. And I think that's
often how this plays out. Whenit comes to your credit card. It's
right there, you know, you'vegot twenty thousand or thirty thousand or whatever

(37:04):
it is available to you, Youswipe it, you put it on there,
and then all of a sudden,a couple months down the road,
when you can't pay that balance,you're looking at how much more you're paying
and you're thinking, wait a second, this is terrible. And this is
where things can really start to sortof snowball out of control, you know,
and get out of control. Sothis is why we would say,
hey, that emergency fund. Itis the cornerstone of your financial plan.

(37:29):
It can feel kind of lucky sometimeswhen that money is liquid, when it's
on the sidelines, you know,in times when the markets are doing really
well, and these are the timeswhen then you put it up against your
credit card rate that you would haveto pay if you didn't have that emergency
fund, and you say, okay, I'm winning every day of the week
by having this absolutely. Yeah.An emergency fund buys you time against not

(37:50):
having to take on debt. Itbuys you the opportunity to not have to
tap into retirement accounts. Because ifwe need to tap into a retirement account
to pay for a expenses because maybewe don't have the credit to actually do
that, then that can derail ourfinancial futures, especially with the opportunity cost
of not having that money growing towardsyour retirement and you think about major emergencies

(38:13):
like losing your job. I mean, how high is your credit limit?
You know, do you have enoughcredit available to you that you can pay
all of your bills for months?That can be an incredibly overwhelming situation.
That's why we say three to sixmonths of those critical expenses set aside makes
so much sense. Thanks for listeningtonight. You've been listening to Simply Money
and percented by all Worth Financial hereon fifty five KRC, the talk station