Ask HTM - Avoiding the Credit Card Burn, Timing a HELOC, & Solar to Retire Sooner #1045

Summary

Podcast Summary: How to Money

Episode: Ask HTM - Avoiding the Credit Card Burn, Timing a HELOC, & Solar to Retire Sooner #1045
Hosts: Joel & Matt
Date: October 6, 2025

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Episode Overview

This episode of How to Money is an "Ask HTM" installment, where Joel and Matt answer listener questions on practical personal finance issues. Main topics include:

• How to use credit cards for rewards without accruing interest
• Strategic timing for opening a Home Equity Line of Credit (HELOC), especially before a job change
• Whether investing in solar panels can help accelerate retirement plans
• Bonus: Engaging with parents about smart financial decisions, and the best cell phone plan options for wearable devices

As always, their tone is casual, personable, and packed with real-life anecdotes.

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1. Key Discussion Points and Insights

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Avoiding Credit Card Interest While Earning Rewards

Listener (Ben from Grand Rapids, 10:12): He uses his Capital One Venture card like a debit card, always pays in full, but wonders if he needs to pay both the statement and current balances to avoid interest or if auto-paying the statement balance is enough.

Takeaways:

• Auto-paying the statement balance is sufficient to avoid credit card interest, provided you always pay in full and on time.
• Credit cards have significant advantages—including fraud protection and rewards—when used responsibly.
• Manually paying the full current balance can also benefit your credit utilization rate, potentially boosting your credit score.
• Paying manually (vs. auto-pay) can create more spending awareness, but setting up auto-pay provides a crucial safety net against missed payments.

Memorable Quotes:

• "If I just let the auto pay handle the statement balance, does it ensure that I'll never be charged interest?" — Ben (11:11)
• "I do love though that you are using your credit card like a debit card. You know, he's got a general healthy skepticism towards his credit card, which I think is a good, healthy approach." — Matt (11:44)
• "Most folks...know about the rewards... but I think most people don't understand the value of fraud protection that credit cards can provide." — Joel (12:26)
• "You will avoid the downsides of credit card if you allow that auto pay to go through." — Matt (17:09)

Timestamps:

• [10:12] Listener Ben's question
• [11:44 - 13:38] Benefits of credit cards & fraud protection
• [16:04 - 18:48] Statement vs. current balance; practical credit card tips

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Timing a HELOC Before Losing Income

Listener (Corinne from Upstate NY, 25:33): She's expecting to be laid off, feels financially secure (Money Gear 7), and wonders if she should get a HELOC now or wait, given her hazy home renovation plans and pending loss of high income.

Takeaways:

• It’s wise to secure a HELOC before losing steady W2 income, as lenders offer better terms to actively employed applicants.
• HELOCs generally cost little or nothing if unused: open one for flexibility, even if a renovation is years away (or never happens).
• Use a HELOC prudently: ideally, pay off any draw within five years to limit risk.
• Shop around—credit unions often offer better HELOC terms.

Memorable Quotes:

• "It is very rare that you hear someone say, 'I'm probably going to get laid off in a few months, but no biggie.'" — Joel (26:58)
• "I would love to see many more homeowners out there having access to a HELOC, but opting not to use it." — Matt (28:37)
• "Why not, while the sun is shining, open the account?" — Joel (29:30)

Timestamps:

• [25:33] Corinne's HELOC question
• [27:04 - 28:37] Value of financial prep and HELOC pros/cons
• [31:34 - 33:54] More on HELOC flexibility and shopping for rates

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Should I Pay Cash for Solar Panels to Retire Earlier?

Listener (Jacob from Western PA, 34:34): Weighing whether to use $50k in cash (after tax credits) to install solar and cut utility costs—hoping it would hasten retirement—or if he should finance it, keep the money invested, or self-manage the install.

Takeaways:

• With tax credits expiring in 2026, it’s recommended to act now; the installation must be completed before year end to qualify.
• Paying cash (instead of financing) is ideal: avoids high-interest solar loans, offers a guaranteed return equal to the interest avoided, and still leaves Jacob with a strong liquidity buffer.
• Financing stretches the break-even to ~20 years and incurs interest—avoid unless necessary.
• If self-managing the project (“self-GC-ing”), beware: saving money could mean missing the tight tax credit timeline; getting a reputable installer may be safer.
• Solar boosts home resale value—don't overlook that.
• Keep detailed records to show buyers future savings if you sell.

Memorable Quotes:

• "Given the known reality of no more solar tax credits starting in 2026, I think pouncing now is really important." — Joel (38:24)
• "I'd rather take the guaranteed number, which is paying cash and not paying the 9% interest, than hoping I earn more in the market." — Joel (39:22)
• "It literally shades your home to where it creates this energy passive system...so...you need to use even less energy to actually cool your home." — Matt (44:25)

Timestamps:

• [34:34] Jacob's situation and numbers
• [37:07 - 38:24] Solar tax credit urgency
• [39:22 - 41:52] Cash vs. financing; solar and home value
• [42:56 - 43:32] Risks of DIY install amid tight deadlines

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How to Talk Your Parents Out of a Bad Financial Move

Listener: “Boaty McBoatface Esquire” (48:29): Parents (77 and 75) want to fund a new HVAC system using a home equity loan at high interest. Should he convince them to use retirement funds instead, and how?

Takeaways:

• Offering unsolicited financial advice, especially to parents, is delicate—often best to approach with curiosity, not judgment.
• Ask open-ended questions (e.g., about why they've chosen a home equity loan, if they're aware of the rates, etc.) rather than dictating what they should do.
• This isn’t a disastrous financial move (like a scam or high-cost payday lending), so it’s probably best to let them make their own decision—unless you see self-destructive behavior.

Memorable Quotes:

• "Typically, inserting yourself into that scenario when it's not been asked for leads to hurt feelings...Maybe curiosity instead of judgment." — Joel (51:34)
• "It's not like your folks are looking to take out a payday loan...If that was the case, I would say, hey, you probably do need to seriously intervene." — Matt (51:34)
• "Maybe they know things that you don't...you can let your parents cut them some slack on this and let them do their thing." — Joel (52:41)

Timestamps:

• [48:29] Listener scenario
• [50:33 - 51:34] Parent-finance advice dynamics

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Bonus: Cheapest Cell Phone Plans for Wearables

Listener (Jordan): Wants a budget-friendly phone plan with support for kids’ GPS watches.

Takeaways:

• US Mobile is best-in-class for flexibility and price, with wearable-specific plans starting at $6.50/month (annual prepaid).
• If you need an Apple Watch with cellular, be sure to buy the correct (“+cellular”) model (not all are cellular-enabled).
• MVNOs like US Mobile let you switch between the major networks for the best possible coverage, even month-to-month.

Memorable Quotes:

• "US mobile is our current favorite for most folks in the cell phone and in the smartwatch space." — Matt (55:26)
• "The network flexibility with the MVNO specifically with US Mobile, man, it blows my mind. I think it's just like the best thing since sliced bread." — Matt (57:25)
• "I don't know what kind of like shady deals they got going on in the background where they are allowed to do this...But it sure seems like US Mobile is going to be able to take over the world." — Joel (57:35)

Timestamps:

• [53:47 - 58:15] Wearable phone plan advice

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2. Notable Quotes & Memorable Moments

• "Don't be stressed, but we do want you to think about it." — Matt, on healthy credit card habits ([11:44])
• “If you can use [credit cards] in a healthy way...they are just another reason that we like credit cards as a method of payment.” — Joel ([13:38])
• "Having one [HELOC] is no excuse to not have gone through the money gears and amassed a decent chunk of savings." — Matt ([28:37])
• "While the sun is shining, open the account." — Joel, on setting up a HELOC while employed ([29:30])
• "I think pouncing now is really important." — Joel, on installing solar before the tax credit ends ([38:24])
• "Approach them with curiosity instead of judgment." — Joel, on giving financial advice to parents ([51:34])
• “US Mobile is our current favorite for most folks…” — Matt, on best phone plans ([55:26])

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3. Timestamps for Important Segments

• [10:12] Avoiding Credit Card Interest – Listener question & deep dive
• [25:33] Timing a HELOC – Listener scenario & strategic advice
• [34:34] Is Solar Worth It for Early Retirement? – Case study & calculations
• [48:29] Convincing Parents on Financial Decisions – Navigating generational advice
• [53:47] Best Phone Plans for Wearables – Kids’ smartwatches & MVNO versatility

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4. Episode Language & Tone

Joel and Matt keep things light, friendly, and approachable. Their financial insights are always practical, peppered with personal stories and laughter, and free of jargon. They punctuate advice with empathy, especially when discussing relationships and money.

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5. Conclusion

This How to Money episode delivers actionable wisdom for real-world financial dilemmas, from using credit cards safely and tapping home equity proactively to making large clean-energy investments and navigating tricky family conversations. Each answer is rooted in everyday experience, with an emphasis on empowerment, preparation, and open communication.

For show notes and resources mentioned, visit howtomoney.com.

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Transcript

[Matt]

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[Joel]

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[Joel]

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[Matt]

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[Joel]

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[Matt]

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[Joel]

Welcome to How To Money. I'm Joel. I am Matt and today we're answering your listener.

[Matt]

Yeah buddy. This is episode 1045. I just saw that. Which sounds like. Sounds like it's time for a mid morning break. You know you hear 10:45, that's when. That's when the folks used to step out of the office to go for a smoke break.

[Joel]

Oh, back in the madman era.

[Matt]

Well, I mean, I'm even thinking about my first corporate job out of. Out of college.

[Joel]

Oh, really?

[Matt]

Yeah. Working at an ad agency. Like, a few ladies would always come.

[Joel]

To Your desk at 9 and 10:45 was the time it was felt allowable. I guess so.

[Matt]

Because they would always come by and kind of tap on the door and one of the other ladies would go, what's funny? Did you ever. Did you eat? Well, you can share what you want to share. One of my co workers, I used.

[Joel]

To smoke a little bit.

[Matt]

Yeah. I was going to ask, did you take. Did you. Would you take smoke breaks? 20 years ago, like, way back, I.

[Joel]

Wouldn'T do it at work. That one felt, one, I didn't want to smell at work. And then two, it also just.

[Matt]

These ladies did not care.

[Joel]

They didn't care.

[Matt]

But my buddy, the increased productivity that.

[Joel]

Nicotine can provide, does that offset the time that smokers take?

[Matt]

So maybe it's a wash.

[Joel]

I was wondering that because I have some friends who are.

[Matt]

They're not doing the nicotine gum, are they?

[Joel]

For the kids listening to this podcast, we do not endorse using nicotine.

[Matt]

Yeah.

[Joel]

But I have friends.

[Matt]

Specifically smoking.

[Joel]

Specifically smoking. But who are getting more into, like, the. The pouches. And there's like dissolvable. Yeah. Nicotine substances.

[Matt]

Pouches. The gum. From a productivity standpoint, I think it.

[Joel]

Does help them focus at work. That's crazy. I don't want to be beholden to any substance. No, that's the kind of. Except for a little bit of craft beer. Except for coffee, but yeah, I guess that's. From that standpoint, I'm gonna. And it just. It gets expensive.

[Jacob]

Yeah.

[Matt]

It's like one more thing that I can just not have to worry about buying on the reg. I was going to say that one of my. I was working as a graphic designer. One of my co designers, Brian, him and I, we would always get annoyed because they were taking, like, multiple breaks a day. And I'm just like, you know what? At least once a week, you and I should roll in here with our pipes because we were like, it was kind of hip to smoke a pipe back then. And so once a week we'd go and, like, sit for 30, 45 minutes for a quote unquote smoke break and have, like, philosophical conversations.

[Joel]

Put all your smoke breaks into one long.

[Matt]

Yeah. I mean, that being said, they were down there for like 10, 12, 13 minutes.

[Joel]

Sure.

[Matt]

I don't know. I believe it, but we are way off tangent, dude. This is an Ask how to Money episode. And maybe we will actually get to some listener questions. Like, a listener is looking to avoid getting tripped up paying credit card interest. He wants, like, all of the good that you can receive from a credit card without any of the bad. We're going to talk about the best time to get a heloc. This listener, she's contemplating a renovation. So that plays into what our answer is going to be. Another listener. He's thinking about how solar. How getting solar panels might aid in his ability to retire sooner. So, yeah, we'll get to those, plus a couple more during today's episode.

[Joel]

There we go.

[Matt]

And we will avoid any additional smoking talk or any other vices that folks might participate.

[Joel]

Try to avoid it. Although we are going to drink a craft beer on this episode. This one's fun.

[Matt]

We do.

[Joel]

It's complicated being a wizard. We'll give our thoughts on this one at the end of the episode. Real quick, Matt, I wanted to.

[Matt]

Speaking of smoking a pipe.

[Joel]

Complicated wizards, right? Like Gandalf. Well, I went to the thrift store recently that's near my house that I hadn't been to before. There's one that's, like super close to my house, but then there's one that's a little further away. I went to the one that's a little further away. Cause some people had said that's the best thrift store in town. I was like, okay, I'll check it out.

[Matt]

Was it.

[Joel]

And it was great. It was a really good thrift store.

[Matt]

Was it? Which one is that?

[Joel]

It's called City Thrift.

[Matt]

Ooh.

[Joel]

Yeah.

[Matt]

Is that a national chain of thrift stores?

[Joel]

Don't think it is. Is it like Goodwill? Seems like a smaller one. Like America's Thrift and Goodwill are bigger. I haven't seen any other city. City Thrift locations of this particular one, but there probably are. But the reason I went there was because, sadly, we have a funeral to attend this weekend. And my little dude, we needed to get him, like, a sports coat. And I was like, man, how much is a sports coat going to cost if I'm buying it brand new? And how often is he actually going to wear this thing? Probably never again. And so that's the time when the thrift store makes the most sense. Oh, yeah, right.

[Matt]

Totally agree.

[Joel]

And so we got him a great one. It was either five or six dollars.

[Matt]

I don't remember, but it doesn't matter. Five or six buc. The same thing.

[Joel]

So Good.

[Matt]

So much cheaper.

[Joel]

He was so pumped.

[Matt]

Than going to, like, J. Crew for kindergartners.

[Joel]

We basically got him a whole funeral outfit. He already had, like, some dark pants. We were good there. But we got him a shirt, some. Some dark shoes, and then that and the whole total walking out. Got a dress for my daughter was, like, $26 for everything, all in the. I even got myself a new tie because a used tie. I guess it's all used there for $2.09.

[Matt]

Hey, that's not always the case, actually, because sometimes you'll find stuff with tags on it, things that have never, never been worn before. That always blows my mind.

[Joel]

The shoes we got them looked like they'd been worn once, probably. They probably had been. Yeah. Honestly, so. Which is kind of crazy. So don't forget about the thrift stores. The other thing that I saw there was just a ton of Halloween costumes, and I was like, oh, my gosh. That's surprising. Yeah, there were a lot, like, multiple racks of Halloween costumes.

[Matt]

I wonder if they. If they, like, hang onto them in the back and then they pull them out. Oh, probably at the beginning of October, because I would think that you would see more Halloween costumes after Halloween or like, at the beginning of the year when folks are kind of cleaning out the house a little bit. They're like, oh, I'm gonna hang on to this because I'm gonna wear it again. And then January rolls around, they're like, I'm not gonna wear this again.

[Joel]

Right.

[Matt]

Let's put this on the donate pile. But that would be a smart thing to do. It sounds like a free market sort of innovative, capitalistic maneuver that this city. What was it? City Thrift.

[Joel]

City Thrift.

[Matt]

I'm gonna look it up. Yeah, check that one out.

[Joel]

Just word of the lies. If your local thrift store has solid Halloween costume options, it's probably worth checking there if you want to get something kind of cheaper. Actually made. Not. Not homemade. Not homespun. You like the homemade costumes?

[Matt]

We do some homemade stuff, but it just depends on what the kids have going on. You want to know?

[Joel]

I just reuse costumes from prior years, assuming no one. Like, I just. How many times have I worn my Ninja turtles costume?

[Matt]

I don't know. Have you done the costume recently? Over the past couple years. When. When the kids were younger, we dressed up more with them to do the themed family.

[Joel]

Maybe I'll bring it back this year. I'll be Michelangelo again.

[Matt]

Got to do the new Michelangelo. Tmnt. How do you create a costume that looks like that graphic novel. I don't know. Style. That's the big question. Because you're gonna look like Michelangelo from, like, the 80s throwback. He looks so soft and plushy. I was gonna say one other way that a thrift store, when it really shines is when you have a preteen who doesn't totally understand her own style yet and is trying out different things, try different looks. How much more affordable is it to do it there than buying items new when they may not, you know, they might wear them like twice. And then it's just like, oh, yeah, I don't really like that anymore. She came home the other day with boot cut jeans, which is something we had talked about recently. She's like, what's something from when y' all were younger? I guess we're talking specifically about style that we don't do anymore. And I was just like, well, there's this thing called bootcut jeans. Although bootcut jeans are kind of back.

[Joel]

We used to, like, cut the size of our jeans.

[Matt]

I know I explained that to her. I was just like, we used to even do that to make it easy, even. Even wider so that they would fit over your tennis shoes. And she's like, no way. I was like, yeah, that's how we used to do it back 20 years ago. Take me back to 30 years ago. 2002 is when. Yeah, I think it's the last time I had some boot cuts, but nice. Anyway. Yeah, thrift stores for the win.

[Joel]

Don't sleep on the thrift store. All right, let's get to your questions. If you have a money question, go to howtomoney.com ask. It's pretty simple to record the voice memo on the app of your phone, send it over our way. Hopefully we can take your question next week on the show. Matt, let's get to a question specifically about paying off a credit card. Doing it in the smartest way possible.

[Ben]

Hey, Matt and Joel, this is Ben from Grand Rapids. Thanks so much for all that you're doing with the podcast. Been following along for about six years now, and your resources have been a huge part of my journey already. Quick question for you guys. So I use a Capital One venture card, and I treat it like a debit card. I pay it off in full and just enjoy the rewards and the fraud protection from it. My question is about auto pay. So for years, I've had it set to auto pay the statement balance, which is really the only thing that they kind of offer within Capital One. But since the current balance is usually higher than the statement balance. I often end up making a manual payment for the current balance and then canceling the auto pay so it doesn't double pay. I'm not even sure if Capital One would allow that, but it's. Yeah, I think I do it mostly out of fear and trying to avoid interest. So my question is, am I overthinking this? If I just let the auto pay handle the statement balance, does it ensure that I'll never be charged interest or do I need to manually pay the current balance each time to truly avoid interest? If so, is there a way to automatically do that in Capital One that I'm not aware of? Because it appears that only the statement balance is the allowed thing to choose for autopay. So yeah, I'd love to know if the statement balance auto pay option is enough or if I'm right to worry about the difference between statement and current balance. So thanks a ton for your help, guys. Really appreciate the show.

[Matt]

All right, Ben, short answer, it is enough, but that doesn't mean that you shouldn't be worrying about it. There's other things to think about here.

[Joel]

So we want you to worry constantly, Ben.

[Matt]

Don't be stressed, but we do want you to think about it. I do love though that you are using your credit card like a debit card. You know, he's got a general healthy skeptic skepticism towards his credit card, which I think is a. It's a good, healthy approach and that is warranted because half the folks who use their credit cards, they don't treat their credit cards with care. They're not paying attention because they find themselves in recurring credit card debt. And so having the attitude been that you have is going to be what keeps you in the 50% of folks who use their credit cards well. And he specifically outlined the benefits there. He talked about the fraud protection, the rewards that makes using credit cards wisely so worth it.

[Joel]

Yeah, I agree. We call them the golden rules of plastic up on our [e-mail] if you're interested in kind of reading up what when it's okay to use a credit card. We're okay with credit cards, but only if you use them the smart way. And Matt, most folks, they know about the rewards, the 2% cash back, right? Or the travel rewards that you can get from using a credit card. But I think most people don't understand the value of fraud protection that credit cards can provide. And I love that Ben highlighted that. So just real quick, I wanted to just mention credit cards. They come with superior legal protections against fraud. So that you aren't liable if you lose your credit card and someone else uses it as if they were you. So you drop it on the pavement, someone else picks it up and they're like, ooh goody, I'm going to Aldi. They're probably going somewhere else to spend even more money, but I'm going to Aldi to get my groceries on this thing. Well, that Aldi trip is not on you. Whereas if someone used your debit card, you are either. If you don't catch it in time, you could be on the hook for some or all of that expense. And you're also trying to claw your own money back as opposed to with a credit card. You are, you're not out the money, it hasn't left your account. And so it is just another reason that we like credit cards as a method of payment. If you can use them in a healthy way. Yeah.

[Matt]

By the way, one of the reasons you don't go to Aldi to use somebody else's card is cause they got the camera set up now, they got the self checkout. It's like a high default, really nice picture of your face as you're there scanning your.

[Joel]

You don't get caught.

[Matt]

Yeah, but you're talking about the fraud protection. This is actually something I don't think I've, I haven't shared this yet on the show. I have previously mentioned a car rental company that did not hold my car rental reservation that I had made. So we won't get into all that. And so they had canceled the that reservation and I, you know, rebooked with a different provider and they said alright, you know, you can cancel and that will show back up on your. I did the paid in full in order to get the biggest discount at the time. That will show back up on your card in like three to five business days. Guess what? Never happened. They never refunded me, they never credit credited me the amount. Dude. And so it was like two weeks later that I remembered and I checked my statement, it still wasn't there. So guess what? I did hopped on there and, and at this point in time there's no way that I was going to like, I'm sure I could have like reached out to them and been like hey guys, how come this is a giant company? They had already treated me incredibly poorly. So I went over onto the credit card on the online portal, flagged that charge and it just had a nice option there as one of the reasons it was the fact that oh, this is something that had been canceled. It's not like it didn't. I feel like it used to say, please reach out to the business first, but they're just like, oh, did you. Was this a charge that should have been canceled or refunded? And I was like, yes. And they're like, cool, we got your back. We'll be in touch. And they immediately credited my account by that 900 bucks.

[Joel]

Yeah.

[Matt]

And then it took them, like, over a month, I want to say almost two months of them evidently reaching out to budget to see if they would be able to be able to provide the money. Anyway, the temporary credit was there that entire time, and I wasn't out that.

[Joel]

Money until they officially.

[Matt]

Until they officially got it back. And of course, I didn't really care because in my mind, it was all. It was already back in my account. But for them to have done that for me, it was wonderful.

[Joel]

That's pretty sweet.

[Matt]

So great.

[Joel]

It's an undervalued characteristic that credit cards offer.

[Matt]

Yeah. It's not often that you have to put it to use, but, man, I'm certainly glad that I was able to do that then, as opposed to being forced to have to manually claw back my own money. Where had I put that? On a debit card, for sure.

[Joel]

You also can get great rental car insurance through your credit card as well if you use the right credit card.

[Matt]

That's true.

[Joel]

Let's talk about statement balances versus current balances. That's really the heart of Ben's question here. He says, really? Which one makes sense? And he's going through the manual way to pay the current balance instead of just the statement balance. Well, your credit card billing cycle, it closes at basically the same time every month. And then you are responsible for paying that balance by the due date. And if you do, you're avoiding the most nefarious feature of credit cards, paying those high interest rates, which have, of course, gotten worse in recent months. And so auto paying the statement balance is a great way to go. And it makes the most sense for most folks because as long as you got the money sitting in your bank account, it's this seamless transaction happening behind the scenes that you don't have to worry about. And we don't. I don't know of a credit card issue issuer mat that allows you to auto pay your current balance as opposed to the statement balance. I don't think it's a thing, probably because the current balance is always changing multiple times a day for many people. So still paying that statement balance, it's, it's good enough for most folks and they really shouldn't need to go any further or pay that current balance like Ben is keen to do.

[Matt]

Ye, yeah, you can choose minimum balance, but we wouldn't recommend you do that. That's the wrong option. I think Ben's just worried that something's going to happen and he's going to be charged interest, which is why he is manually going in there. He's paying that current balance each month. You don't need to do that. You will avoid the downsides of credit card if you allow that auto pay to go through. But that being said, there are some perks to taking your approach as well. And one of the benefits here is that you're giving a potential boost to your credit score. So that balance being reported to the credit bureaus is going to be smaller, which lowers your credit utilization rate, which increases your score over time. So if your score is just okay, and this is something that you're trying to focus on increasing, then this can be an effective tactic to essentially keep that running, that revolving balance to a minimum.

[Joel]

So I normally pay the statement balance, Matt, and just kind of have it let it automatically be paid every single month.

[Matt]

Unless.

[Joel]

Unless I make a really big purchase. Yeah, because when I make a really big purchase, that's what I'm like, oh, what was your latest really big purchase? I'm trying to remember what it was.

[Matt]

You're talking thousands of dollars, right? Like if you're like, oh, like if.

[Joel]

You'Re booking a trip, perhaps booking a trip. Maybe some, maybe a bunch of flights or something like that, or a car rental. If there's something that is like a little bit out of the ordinary and I don't want it to impact that credit, credit utilization ratio, I will just manually go in there and it's, you know, I probably don't need to. And is it really going to impact my score all that much? Probably not. And even if it does impact it by a few points, will it bounce back pretty quickly? Yeah, probably.

[Matt]

But still, I don't like toeing the line, though. I don't like even getting close. You know, you just. I just like to make sure that I'm not going to go anywhere near that limit.

[Joel]

So I'll bounce in there, pay it off real quick, get her done with. I think there's also something powerful about taking things off autopilot. And there's something really great about autopiloting certain things in our lives. But, but a lot of people opt for Auto pay and then they don't ever look at their credit card statements. So they're just not regularly being confronted by their spending habits. And you know, maybe they consistently have enough money in the bank to cover their statement balance to be able to pay that off on time and in full without having to worry about whether or not they can pay it or it's going to impact their credit score. Maybe their, their credit card limit is so high that they're not even getting anywhere close to that territory. And so they're like, yeah, statement balance done. I don't have to even think about it. They are avoiding maybe the worst parts of credit cards, interest and late payments. But if those people were to log in and were to be confronted with their spending on a monthly basis, if they were to look at the actual transactions and then they were to manually, I think, pay that credit card bill instead of just letting it auto pay, I think maybe for some folks it would wake them up just some of the spending choices that they're making that aren't in their best interest. And so yeah, do you need to manually log in and feel the pain viscerally in order to be a smart credit card user? No, but it could be a helpful psychological trick I think for some folks to go in there every now and again more often than they currently are. And I do think that it could lead to some positive benefits. Totally.

[Matt]

Yeah. And I don't think this is quite what Ben's doing, but he's mentioning going in there and canceling the auto draft, the auto payment that's, that's scheduled. Hopefully he's not completely unscheduling it and then like rescheduling it or something like that. I think he's just going in there for that particular payment, but essentially he's got it there as like a safety net, I think. Right. So just in case he does, you know, if it slips his mind that it will get taken care of. But I think for a lot of folks it is a good safety mechanism to have that auto pay on in case you forget or things get busy. Maybe it just slips your mind and you don't close out that month. And for that reason I would, I would recommend keep that, keep that auto pay on.

[Joel]

I guess that's the thing that worries me. If he's going in there and manually paying and he takes off autopay and he forgets to manually pay.

[Matt]

I think he's just canceling that particular one because like the way it's set up, it's, it feels, I think it's just I don't. So I don't personally do auto pay. I like living life on the edge. Ben.

[Joel]

So you put a calendar reminder to go in every single month and manually.

[Matt]

Pay at the end of the month. I go in there and I close out the month with my different cards and I schedule the payment. I don't actually make the payment, but I schedule it based on the current balance of the previous calendar month because I don't like being parted with my money sooner than I have to. Joel I always schedule it for one day before when it's actually due, which maximizes the time that that money is sitting in my own account earning that interest, baby.

[Joel]

There you go.

[Matt]

Yeah.

[Joel]

So, yeah, I guess, Ben, really, you don't have to change your habits. And if this is working for you, go for it. And maybe this is just creating more insight to your money and it's kind of fueling that drive to make progress with your finances, to spend less and to save more. That's great. But also know that you can choose that statement balance option if you want to make your life a little simpler. And you'll be okay if you do that, too. All right, Matt, we got more to get to on this episode, including how do you convince your parents to make better financial decisions? We'll discuss that and more right after.

[Matt]

You probably think it's too soon to join aarp, right? Well, let's take a minute to talk about it. Where do you see yourself in 15 years? More specifically, your career, your health, your social life? What are you doing now to help you to get there? Well, there are tons of ways for you to start preparing today for your future with aarp.

[Joel]

What about that dream job you've dreamt about? Sign up for AARP reskilling courses to help make it a reality. How about that active lifestyle you've only spoken about from the couch? AARP has health tips and wellness tools to keep you moving for years to come. But none of these experiences are without making friends along the way. Connect with your community through AARP volunteer events.

[Matt]

So it's safe to say it's never too soon to join aarp. They're here to help your money, your health and happiness live as long as you do. That's why the younger you are, the more you need AARP. Learn more at aarp.org wisefriend there's nothing.

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[Matt]

Hey y', all, it's Joel and Matt from how to Money. Joel, you were just out in Seattle recently, weren't you?

[Joel]

Yeah, man, it was amazing. I went for one of the most glorious runs of my life along the waterfront. It had everything you could ask for. Crisp air, mountain views, fairies gliding across the water.

[Matt]

Beautiful. I love it, man.

[Joel]

Yeah.

[Matt]

For us, our road trip through Charlottesville was a highlight. We actually splurged on a custom built Airbnb and it was well worth it. The house had these unique touches like a poured concrete counter there in the kitchen with a built in drying rack. Super functional. It even inspired some ideas for our house.

[Joel]

Plus, with a kitchen like that, you save money eating out.

[Matt]

Yes, exactly. That's what struck me. What seems normal to a homeowner. It can be the thing that makes a guest trip really special.

[Joel]

Which is why hosting makes sense, right? Travelers are looking for those authentic, memorable spaces and and if you don't have time to manage all that well, Airbnb's co host feature makes it easy. A local co host can help with everything from creating the listing to keeping your place running smooth.

[Matt]

Yeah, so while you are off making your travel memories, your home could be helping someone else make theirs. Find a co [e-mail] host we are back from the break and we will get to that relational money question here in a second. But Joel, let's first hear from a listener who is wanting to make sure that she is nailing the timing when it comes to applying for heloc.

[Corrine]

Hey Matt and Joel, this is Corrine from upstate New York. I had a question about the right time to get a heloc. Here's my situation. I am fairly confident that I'm going to be laid off from my job sometime in the next three to five months, but no worries about that. We're very lucky. My family is in Money Gear 7, and honestly, I had been thinking about leaving my job for a couple years now, but I was never able to go through with it. So it's probably going to be a really good thing for me. The thing is, my wife and I have been noodling with the idea of a significant home renovation. We have no immediate or specific plans, but it's something we'll probably want to do sometime in the next five or 10 years. Right now, I have a high income at my job, and after I'm laid off, I don't anticipate getting another job. We have two young kids at home, so I'll be focused on them and running the household. My wife will likely go back to work, mostly for the health insurance, but her income will be significantly less than mine is now. So would it make sense to get a HELOC now while my income is still high, or am I overthinking it? Since our future renovation plans are still so fuzzy, I just don't want to lose out on good financing opportunities once our W2 income drops. But it seems a little silly to fuss over a home renovation project that may not ever even happen. So I'm kind of leaning toward doing nothing now. But I'm very curious for your thoughts. Thanks very much, Matt.

[Joel]

It's very rare that you hear someone say, I'm probably going to get laid off in a few months, but no biggie.

[Matt]

Someone who's in such great spirits, that.

[Joel]

Is the power, I think, of financial responsibility over a long period of time, which Corrine and her partner have obviously taken to heart. Like, they have taken a lot of steps. They're in Money Gear 7, so they have a lot of options to say, yeah, I'll probably get laid off and it'll be okay. And actually, we're gonna have less income coming in, but we can still afford a renovation.

[Matt]

We'll figure it out.

[Joel]

Yeah, I mean, clearly they've done a lot of work to get to the point that they're at.

[Matt]

She was also. She was just like, I didn't really like that job anyway. It's, like, already something that she was thinking about. And so I think it's. Yeah, again, she's just in an amazing position to be able to have the financial standing to take that traditionally very bad news and good stride.

[Joel]

Well, if you don't love your job and you're Kind of ready to leave, but you can kind of see the storm clouds on the horizon. Getting laid off is the best way to go, oftentimes because you're able to negotiate a severance package on the way out the door. Whereas if you just leave of your own volition, you're just like, well, all right, see ya. Yeah. And then they're like, well, we were gonna lay you off next month, but okay, sure, if you want to go now, that's great. So maybe waiting a little bit longer is the perfect way to do this. And the Sam Dogan who writes at Financial Samurai, he's written about this extensively. The concept of engineering and negotiating a layoff. His situation was a little unique working in Silicon Valley, but still, I think there's. There's some stuff that we can extrapolate as individuals when it comes to trying to negotiate leaving our employer if we're so inclined. And obviously, Corinne is in the financial position to be able to. To do this. Well, that's right.

[Matt]

We're big fans of HELOCs, by the way, home equity line of credit. But similar to credit cards, I'm only for it if you use them properly. And generally speaking, I would love to see many more homeowners out there having access to a HELOC, but opting not to use it. Not unlike how we use the credit that's available to us via our cards, it can almost like, function as, like a backup emergency fund of sorts. Certainly having one is no excuse to not have gone through the money gears and actually amassed a decent chunk of savings. And with a big chunk of savings on hand, and hopefully Roth IRA contributions that you could potentially draw on were you to, you know, were you to be in a pinch, you never have to actually tap that HELOC for emergency purposes. But still, since having access to one costs you essentially nothing, I think Corinne raises just a good point as to, you know, why not, like, why not pursue this product?

[Joel]

Well, I think the reason why the HELOC makes more sense to have than so many other financial products is because you're not paying interest on it unless you actually tap that. So it's like, get the heloc. You don't actually pay typically any closing costs or pay any money to open the heloc, and then if you never take any of the money out, you're doing just fine. You just had it there as a just in case account, and hopefully you never have to use it. But Corrine does want to tap her heloc, which is also fine, and doing A home renovation that's a reasonable use of that product. We would say that why not go for a heloc if you have a plan to pay it off in a reasonable amount of time, we would ideally want you to be able to pay it off within five years. But that's the longest timeline that we want you to consider if you're taking out money on a heloc. Otherwise, you're taking on too much risk. Good news is rates are likely to go down on your HELOC over the coming months and maybe years, making it easier to pay off over time. But the real question is here, when should she take the HELOC out? And we would say do it now. And that is because while you're gainfully employed, you're likely to get the best terms you've got. If you, if you lost your job next week, credit unions and banks, they might tell you to take a hike. Hey, guess what? You don't have enough income to justify us giving you this loan, even though you might not need it for five or 10 years. Like, they're not going to listen to that. They're going to look at what's currently going on with your finances. And if you don't have a paycheck coming in, they're. They might turn you away. Some lenders will underwrite based on assets, but many won't. So I just say don't risk it because you could find yourself in a position where you want access to some of your home equity and you don't have it. Why not? While the sun is shining, open the account. Makes me think mad of a friend who just lost his job and he's trying to close on a house, and it just throws all of the, just a ton of wrenches into the gears of his ability to do this. And so, yeah, while you have the job, establish this account, and then you can always choose to not use it because Corinne's prudent here when it comes to finances. She's not going to screw this up totally.

[Matt]

Yeah, there's no real downside to getting the loan now and not using it, even if you don't actually use it for the renovation, you know, she says, well, what's the point in fussing with this if this isn't a renovation that actually takes place? Well, there's not really much downside, so go ahead and get it. Even though. Even if the home renovation isn't something that you, that you end up doing. Now, on that note, I love how flexible you are with this potential home renovation because you said, like, this might be something that happens a decade down the line or maybe even, like, not at all. Like, that's a lot of wiggle room. And a lot can happen in that. That sort of timeframe, including saving up a bunch of money to pay for this renovation with cash.

[Joel]

Yeah.

[Matt]

So, you know, while I think it makes sense to go ahead and get a HELOC now for the other reasons we mentioned, just know that you might be able to completely avoid tapping it, or maybe you just need it for a small amount of the remaining balance of the. Of the Renault because you thought, all right, we were able to save up the vast majority of it. But then you said, oh, you know what? Let's go ahead. Let's go with the nicer. The nicer tile. Oh, let's go ahead and add this as well. And you end up spending maybe a little bit more. And you're thinking, all right, well, shoot, it actually did pay off to get the HELOC.

[Joel]

Be nice. We had 20 extra grand right now, oh, wait, we have the HELOC.

[Matt]

Wait, we do.

[Joel]

And we can pay that junk off in, you know, 912 months, something like that.

[Matt]

Exactly. So I think that that's a wise move. And just, again, that timeframe is. It's great that you've got so much flexibility there, too, because I will say, as adults, like, I think our. Like, we know our typical needs and what it is that we're looking for if we're looking to renovate a home. But when you have kids, do kids relative to adults, kids are very dynamic as far as their interests, the kind of space that they're looking for, or, like, the kind of hobbies they might be. Be interested in.

[Joel]

And.

[Matt]

And that doesn't even account for possibly moving for schools. Right. Like, as adults, I don't know. When I was younger, I didn't consider it at all. The school district, other than, like, oh, yeah, this is just generally speaking, a good school district. So I know that that's probably good for home values, but there are other considerations that go into that. When you actually have a kid who you are putting in a particular school and where it is you live has a large impact on the type of school that you're in. So that could be something that ends up happening down the road as well. Corinne. So, like you said, this might be a renovation that happens in a couple years, or it might never happen, but having the option to be able to tap that HELOC for various reasons, I think is a good idea.

[Joel]

And, Matt, just briefly, maybe we should mention shopping for a heloc. Get quotes at different lenders and a credit union. Local credit union might be your best bet. But shop around, get a few different quotes. You can typically do that from the comfort of your home online, just going to a few different websites for lenders near you and because that's important too, that's. We talk about that when we're talking about financing a home, getting a mortgage, but the same is true with a heloc. Rates and fees are going to differ by different lenders. So yeah, make sure you do your due diligence on the front end there. Let's get to another question. This one is from a listener who thinks that solar power might help him retire sooner.

[Jacob]

I'm Matt and Joel. My name is Jacob and I'm calling from western Pennsylvania. I'm 51 years old. I make about 200,000 a year. I have roughly 1.5 million saved for retirement plus 150 in high yield savings. I still have about 300,000 left in my mortgage, but that's a low interest rate, so I'm not paying it off early. I'd like to retire in the next five to 15 years, depending on a lot of different things. Here's my question. Our electric bill runs about $400 a month. Solar contractors say a solar system to cover 90% of our usage would cost about 60, $70,000. After the federal tax credit, my net cost would be about 50,000 with a break even around 11 years, not including the opportunity cost of investing the 50,000. If I finance the project, the break even stretches closer to 20 years, but my monthly payment would stay the same as it is right now. So in the big picture, I think I would still be winning on that. On that trade off, I'm also considering trying to self gc the project, which is not something that I know much about, but I think I could handle it. And that would save me 10 to $15,000 on the total cost. My question is, should I spend the 50,000 of cash now to control expenses later in my retirement? Should I keep the money invested and just absorb the higher utility costs or should I take the extra risk of self gcing to make the numbers look a little bit better? I appreciate, appreciate any advice you can give me. Thanks and have a great day.

[Matt]

All right, so I believe that Jacob has a very good chance of retiring in five years. Sounds like it based on how much he's got set aside. That being said, again, we're talking about windows of time here and flexibility like the Fact that he's thinking, all right, I don't know. Sometimes, like in the next five, I don't know, maybe it'll be 15 years from now. I think that's pretty clutch when it comes to actually being able to pull.

[Joel]

The trigger and retiring as having that flexibility, having options.

[Matt]

Yeah. As opposed to, like, shooting for a specific year and then just realizing, oh, we're either gonna have to alter our lifestyle significantly, which, hey, for some people, that's. It's totally worth it, depending on what you got going on.

[Joel]

Yeah.

[Matt]

But I just don't love the idea of assuming that you'll be able to work even longer in order to make more money until you're just a ripe old age, because that's not always in the cards for folks. Again, Jacob having the flexibility to go either way, it just puts him in the catbird seat. I like it.

[Joel]

Agreed. There's the retirement window that Jacob mentioned, but there's another window that we're looking at here specifically with Jacob's question, Matt. It is the short time that he's going to be able to qualify for the tax credit for installing solar.

[Matt]

Oh, yeah.

[Joel]

And the tax credit is not an insubstantial amount in this case. It could. It could really turn something that feels like a solid decision into a not so great one. Overnight, like, and I mean literally overnight, because, like, January 1st, if you finish the installation, then you're screwed. Like, you, you're out of luck. You do not get the federal tax credits.

[Matt]

In his case, I guess close to $20,000. Because that's what he said, right?

[Joel]

Exactly.

[Matt]

$70,000 install. But with the credits, he's looking at closer to 50.

[Joel]

It's.

[Matt]

Holy cow. That's very significant.

[Joel]

It's kind of like how the EV tax credit went away at the end of last month and October 1st, if you bought an EV. Like, what sucker is going in to buy an EV on October 1st?

[Matt]

Nobody has purchased a new EV in the past. At some point, six days.

[Joel]

I'm curious, who's the first person who's actually going to buy an ev? Like, who is that person and what pushed them over the edge?

[Matt]

Well, if you're ultra wealthy and you don't qualify for any of the rebates.

[Joel]

That's true.

[Matt]

If your AGI is above a certain threshold, then you're like, it doesn't matter.

[Joel]

That's a good point.

[Matt]

I'll just get him whenever.

[Joel]

That's a good point.

[Matt]

But I feel like it, Joel, in.

[Joel]

This case, like, you just don't want to wait Too long. The economics of the project are going to get far worse if you wait. So given the known reality of no more solar tax Credits Starting in 2026, I think pouncing now is really important.

[Matt]

Yeah. But he also mentioned financing, which I don't love because that makes the numbers much less compelling. Jacob, you'd be paying interest unnecessarily and like you said, the break even timeline, it gets stretched way out. Yes. So on the other hand, what he's saying is, well, I could invest that money instead. But we're likely talking about interest rates, I'm assuming somewhere in the 6 to 10% range. And that's if you have good credit, which I'm assuming Jacob does. But that being said, the chances of outperforming go down significantly. If you're looking to say, oh well, my money's got to earn more than 9% in the market. Yeah, I don't know if I could, but I don't know if I would count on that. That's not going to go into my calculations.

[Joel]

I'd rather take the guaranteed number, which is paying cash and not paying the 9% interest, than hoping I earn more in the market.

[Matt]

Yeah. On top of that, Jacob's got a lot of cash on hand, man. He's got a good amount in savings and so forking over $50,000 to do the solar project, I don't think that would crush his finances. You're still going to have plenty of cash on hand. He still currently has a job, he's earning 200k so he'd be able to fairly quickly, I think, refill those coffers even once.

[Joel]

He just pays for that solar project. He still has six months worth of income on hand, which is quite a bit.

[Matt]

That's significant. Yeah. But what it would immediately do though, of course is lower his monthly bills very nicely moving forward. I think if you are getting hung up on the investing sort of part of your calculus here, just to remind yourself that you can take the savings that you are receiving every single month.

[Joel]

Essentially what you would have paid to the utility.

[Matt]

Yeah. And he said 90% of his overall usage. So 90% of that 400. $400 every month. Plug that straight into the market, man. So you're kind of getting, getting to have your cake and eat it too.

[Joel]

Agreed. And financing is better than leasing. There's a lot of weird stuff when it comes to leasing your solar panels, but it's still not our favorite. And if you try to sell that home, by the way, in the future, while still Owing money on those solar panels, it could add unnecessary stress to the situation, especially if you don't have the cash on hand to pay that loan down in full. And on another note, which I think is important to mention here, not only are you going to be saving on your energy bills, but you'll also be adding to the value of your home. That's something that a lot of people who install solar, they're not really thinking about. I don't think they're really building up.

[Matt]

That home equity in the sense that, hey, it's a feature, it's a benefit. It's like an amenity at a nice hotel.

[Joel]

It's a selling point.

[Matt]

Yes, absolutely.

[Joel]

For instance, he installs a solar and then he saves, you know, let's say roughly four grand a year for the next two years. Sells a. He. He saved himself eight grand in energy bills, and then he's like, oh, man, it's time to move on. I got to sell this home. Man, I'm such an idiot. Why did I spend all this money on solar? Well, the truth is, you're going to get a lot of that money back upon resale. So potential buyers are going to be willing to pay more because of the perpetual energy savings that having solar on the house provides. Like your investment in the energy savings of this house, even if they don't accrue to you for decades to come, they'll accrue to somebody else and they'll pay you for that. So, yeah, saving money now, it's a big attraction. But it's also, I think, helpful to know that it's a decent investment in your property, too.

[Matt]

Yeah, to that extent, I would make sure to keep good records to even show and to like, even demonstrate if and when the time came for you to sell that house, to say, hey, this is where my utilities were, this is where they are now. That way, when it comes to someone who's thinking about, oh, well, another house just like yours sold for this, and you can say, well, you got to factor in the additional savings here that you're going to realize every single month. Being able to communicate that effectively, I think is clutch. And then just shop around with multiple installers, make sure specifically though, that they can get the system up and running before the end of the year, because if not, if the install completes in 2026, you can miss out on those tax credits. I think for that reason, I would avoid. He mentioned possibly gcing it himself. Yes, I think for that reason, like, gcing it himself sounds like he's not super interested in doing it, but he's maybe capable. He sounds like a smart guy. I would be more likely to say yes if it was earlier in the year, but because there are going to be, there's going to be like a mad rush, I think, of folks who are trying to get these things done. Agreed. And these installers are going to be booked through like December 31st.

[Joel]

And that's one of the things you need to prioritize is like, hey, how, Like I would even interview people who have used the company in the past and say, do they stick to their timeline like I would want to? Similar to interviewing a general contractor who's doing other work at your house. I would want to know that they actually do good work, that people who have used them are happy with it and that they get it done in the time they say they're going to get it done.

[Matt]

And because it's a lot of money on the line.

[Joel]

There's a lot of money on the line. It's so crucial right now. I think, you know, getting this done makes sense. Gcing it could delay that process and that could cost you more than the savings you might be able to realize.

[Matt]

Totally. That could be a cheap move, not a frugal move.

[Joel]

100%.

[Matt]

Another aspect too, that like you're talking about the ongoing savings every month being the addition, you know, like you got the benefit, the immediate benefit of the monthly savings, but then just kind of like the long term benefit of like the increased equity in the home. There's also like something else as I was just picturing this on my own home, on my own roof, like it gets really hot up in the attic and there is just a massive increase in your home's ability to deflect solar energy that is not just getting sucked into the attic. Right. And so I was up there recently changing out the air filter. I was just like, it is so hot up here and picturing solar panels on there. It literally takes the brunt of the solar energy. Not only does it create, of course, electricity with it, but it literally shades your home to where it creates this energy passive system, which means that you need to use even less energy to actually cool your home. So some people might. It's like a double.

[Joel]

A double whammy.

[Matt]

It's a double. Yeah, it's a double.

[Joel]

Is that what you're gonna say?

[Matt]

I was actually. It's like it serves the end goal of what you're trying to achieve even more. And I think that that's just. I don't know how big of a deal that is. But you can tell the difference in your house. You know, like imagine like even when the external the temperature outside is roughly the same when it's a sunny day. At least in our house, man on the second floor, it gets so hot. It can get really hot up there. As opposed to a cloudy day where you're not getting that direct blast from the sun. That's just bacon the upstairs, bacon the attic.

[Joel]

Agreed. All right, we got more questions to get to Matt, including convincing your folks to make better financial decisions. And what about the best cell phone plan for wearables? We'll get to those questions right after this.

[Matt]

You probably think it's too soon to join aarp, right? Well, let's take a minute to talk about it. Where do you see yourself in 15 years? More specifically, your career, your health, your social life? What are you doing now to help you to get there? Well, there are tons of ways for you to start preparing today for your future with aarp.

[Joel]

What about that dream job you've dreamt about? Sign up for AARP Re skilling courses to help make it a reality. How about that active lifestyle you've only spoken about from the couch? AARP has health tips and wellness tools to keep you moving for years to come, but none of these experiences are without making friends along the way. Connect with your community through AARP volunteer events.

[Matt]

So it's safe to say it's never too soon to join aarp. They're here to help your money, your health and happiness live as long as you do. That's why the younger you are, the more you need AARP. Learn more at aarp.org wisefriend there's nothing.

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[Matt]

Hey, y', all, It's Joel and Matt from how to Money. Joel, you were just out in Seattle recently, weren't you?

[Joel]

Yeah, man, it was amazing. I went for one of the most glorious runs of my life. Along the waterfront. It had everything you could ask for. Crisp air, mountain views, fairies gliding across the water.

[Matt]

Beautiful. I love it, man.

[Joel]

Yeah.

[Matt]

For us, our road trip through Charlottesville was a highlight. We actually splurged on a custom built Airbnb and it was well worth it. The house had these unique touches, like a poured concrete counter there in the kitchen with a built in drying rack. Super functional. It even inspired some ideas for our house.

[Joel]

Plus, with a kitchen like that, you save money eating out.

[Matt]

Yes, exactly. That's what struck me. What seems normal to a homeowner. It can be the thing that makes a guest trip really special.

[Joel]

Which is why hosting makes sense, right? Travelers are looking for those authentic, memorable spaces. And if you don't have time to manage all that well, Airbnb's co host feature makes it easy. A local co host can help with everything from creating the listing to keeping your place running smooth.

[Matt]

Yeah. So while you are off making your travel memories, your home could be helping someone else make theirs. Find a co [e-mail] host all right, buddy. We are back from the break and of course it is now time for the Facebook question of the week, which this week happens to be from Bodie McBoatface, Esquire. Remember, I think that's a real name.

[Joel]

Bode.

[Matt]

So that's like a British boat or submarine or something that they did an online poll for.

[Joel]

They allowed the public to name the boat.

[Matt]

This is why we can't have nice things.

[Joel]

I know. I don't think they were expecting this.

[Matt]

Name to win, but it did so in Atlanta. So there is a public works project where they drilled underground from the river to like a new reservoir and they did something similar. And do you remember what end up ended up willing. I don't ended up winning for the name for that drill.

[Joel]

What was it?

[Matt]

Drill. A mic. So like Killer Mike from Run the Jewels, but which is a great. Yeah. How awesome is that? I think it's. I think it's great. Anyway, this is from Boaty McBoatface Esquire. TLDR. How do I convince my dad not to take out a home equity loan to pay for new air conditioning and a new furnace? My parents 77 and 75. They don't have central air in their home and their furnace is legit 50 or 60 years old, which is impressive by the way. That's probably why it still runs actually, because it's like they don't make them like they used to. They are planning on installing AC and getting a new furnace, but they're going to take out a home equity loan instead of taking some money out of their retirement cost could be 15 to $25,000. How do I convince them that taking out a home equity loan on a home, I don't think it's paid off yet is a horrible idea? When interest rates will be 8% or higher? I don't know what their situation is with their investments and how they have things invested, but if you are in stocks, you have had a pretty good couple of years being retired at 77 and 75. I'm sure my parents are more conservative with their money, but they still have to be making some money, right? I feel like taking the money out of their retirement would still be a much better idea in the long run than a home equity loan. How do I show them that doing this is a bad idea? Dad is retired, postal, with a pension, Social Security, and he moved his TSP to a private company. Mom's retirement income is fairly negligible. Thanks. Yeah, I'm not sure if the specific details matter here as much because I think what we want to talk about is sort of the relational dynamic.

[Joel]

Yeah.

[Matt]

That comes with financial advice and other people.

[Joel]

Yes. Especially your parents. I think every time you're trying to convince friends and family members to make more prudent financial decisions, that is often a recipe for relational dysfunction. Typically inserting yourself into that scenario when it's not been asked for leads to hurt feelings. Right. And so if, if they come to you and they sincerely ask you for your advice. Well, I would, I would be willing to offer my non judgmental input, but most folks don't love unsolicited advice. They don't like for you to come and tell them what you think they should do. And so if you really feel the need to intervene, I guess maybe the best way to go would be to ask a question instead of telling them what you would do or worse, what you think they should do. But maybe ask a question like hey, tell me more about this H Vac install and tell me more about how you're financing it. Or I don't know, but like maybe curiosity instead of judgment and trying to convince them that they should take your advice and not go their own way.

[Matt]

Instead of just immediately bringing down the hammer. Yeah, be inquisitive. I totally agree. And it's not like that your folks are, are looking to take out a payday loan, right. Or they're not looking to send money to a scammer overseas or something like that. If that was the case, I would say, hey, you probably do need to seriously intervene in that instance. But taking out a HELOC versus, you know, taking money out of the retirement, it might not be a bad call. It sounds like this expense is a need, not a want. So I don't think I would fault them for replacing that old unit and upgrading to a full fledged H VAC system while they're at it. And I mean, it sounds like nobody here has an idea of what their, their cash situation looks like, But I think there's a good chance that I would use some investment dollars at that point in my life for an expense like this. But it's also not a clear cut situation. Maybe they are in a cash flow tight sort of situation. They've got things figured out when you take into account the pension, Social Security. And so they're just saying, you know what, we're just going to keep that on autopilot so we can afford the payments. What we don't want to do is draw down on any retirement funds unnecessarily.

[Joel]

Yeah, yeah. And yeah, maybe they know things that you don't. And again, this is like you're saying, Matt, this is not this egregious financial move where you're like, I have to intervene because they're out of their mind. My mom's like watching QVC day in, day out and has packages showing up 10 times a day to the doorstep. It's not a problem. Along those lines, whereas a kid who of aging parents, you feel like you really have to intervene. This is one of those things where which one is the most fully optimized versus not the most fully optimized. And I think they're close enough to where you can let your parents cut them some slack on this and let them do their thing. All right, let's get to a question from Jordan who says looking to find a cheaper phone plan. My wife is against Mint because you can't have a line for wearables like kids, GPS watches. Is there a similarly priced service that has that option? Matt? We are seeing more wearable specific plans, which I like to see. And they're cheaper than cell phone specific plans. I think because the cell phone companies know that you're not going to use as much data on your watch as you would with an actual phone. But before we talk about that, I just.

[Matt]

Streaming high def video games on your watch, right?

[Joel]

Exactly.

[Matt]

Probably not streaming a show or a.

[Joel]

Movie maybe on your watch two years you are, I don't know. But there are like device specific plans I wanted to mention like the Gab watch. Depending on how old your kid is and what you want as far as parental protections, that might be something you look into. On the Gab plans the watch is like typically free but you pay a higher monthly rate and the watch, you know, comes out of the box with those more parent friendly features. I don't love how expensive it is for what you get, but for some parents and even for us for a time it worked. It can be worth the trade off. So just know that it's. Yeah, if you want a traditional like Apple or Android watch, you're going to want to go with one of these newfangled wearable specific plans. But there are also these like tech companies that have made watches specifically for kids and they have their kind of standalone plans that you can opt for as well.

[Matt]

Yeah, it's all in one all. It's like an all inclusive resort. You don't have to worry. It's like you can, you can stick with your current cell phone provider or you can go with Mint and then operate the wearable outside of that. But if you are looking for something that's kind of that has your cell phone plans, you and your wife, your kid as well, US Mobile, it totally rocks in particular when it comes to the wearable specific plans. $6.50 a month for a smartwatch. That's if you, if you pay all at once. If you pay annually, that is in my opinion that's a pretty great rate when it comes to the actual device. I would suggest going used. Certainly make sure to get the gps. Get the cellular cel model of like an Apple watch for instance.

[Joel]

Some of those Apple watches are GPS only and the plus cellular models cost more. But that's the only way you're going to be able to use it standalone.

[Matt]

That's right. But U.S. mobile is our current favorite for most folks in the cell phone and in the smartwatch space. I was just talking to a friend and I couldn't believe that they are still with AT&T dude, like the OG original terrible cell phone provider. Like they're paying I think over 70amonth for.

[Joel]

Going back to our last question, I'm sure you didn't obliterate him. But did you make it a helpful, gentle suggestion?

[Matt]

I made a very good case as to why US Mobile in particular is so awesome. And I was just explaining to her the benefits and like specifically I was telling her the best part is that hey, you can even switch between the different networks. Like that is what's so great about US mobile.

[Joel]

On AT&T's network you can.

[Matt]

So with US mobile it's called Darkstar. So Darkstar is AT&T. You can go with Warp. So that's the Verizon MVNO that's with US Mobile. Or if you want to go with Lightspeed, that's the T mobile version that they have. And you can switch in the middle of a month. You can switch whenever you want to say things aren't working out for you. You can be like, oh, okay, you just log online. I literally did this within the first month of trying us mobile because I thought AT&T was going to be the better option and it wasn't. So I hopped over. I'm sorry, I should say I thought that darkstar was going to, was going to be the best network. Turns out that it wasn't. So I hopped over to Warp and my phone was offline for less than five minutes before it's hopped over, was recognized by the new network and I was good to go. You can even, you can, you can even do like a multi network option to where you pay extra, you pay for extra data. Let's say you normally go with Warp. But then you know some, you know that like oh, when we go off to the cabin, the only network that works up there is T Mobile. You can do that too. You can do data add ons at high speeds with a different network as well. Like the network flexibility with the mvno specifically with US Mobile, man, it blows my mind. I think it's just like the best thing since sliced bread.

[Joel]

That's what's so fascinating now in the space is because some of these MVNO operators, because of that flexibility, they're better than the traditional guys that advertise all the time and it's better.

[Matt]

And I don't know what kind of like shady deals they got going on in the background where they are allowed to do this. Yeah, I don't understand how they have been allowed. Why do I have agreed to it?

[Joel]

Right? Why have the big networks? I don't know this.

[Matt]

Because they've got dirt on them. I think that's it.

[Joel]

Sure seems like US Mobile is going to be able to take over the world with the kind of rates and service that they're offering. So, yeah, yeah, for Jordan, I think that's the one stop shop, man. Like, that's what I would go. Everybody else is going to be minimum 10 bucks a month for wearable plans. A lot of them are closer to 15amonth, so less than half of that at US mobile. All right, Matt, let's get back to the beer before we clock out for today. This. We don't actually clock out, but we.

[Matt]

Should have, like, the punch card.

[Joel]

That'd be awesome. Like Flintstone style.

[Matt]

Sometimes you still see them in certain establishments.

[Joel]

Yeah. Okay. This beer was from Burlington Beer Company. It's called It's Complicated Being a Wizard. What were your thoughts on this double ipa?

[Matt]

It was pretty tasty. It was bold. It had a certain degree of sweetness going on, which I was thinking about because you're kind of stopp up. Could you. Do you feel like you're able to pick up on. On all the. All the flavors?

[Joel]

I think I probably was missing a step. I don't know, bringing my A game, my A tasting game.

[Matt]

I know when I'm like, got a cold or congested, I can't. That's like the first thing to go is I can't taste anything. And so food and drink becomes very unattractive to me.

[Joel]

I tasted it and I enjoyed it. I just don't know that I fully enjoyed every element of this beer because.

[Matt]

What it tastes like to you. And then I'll. I'll let you know what you're missing out on.

[Joel]

It tasted like. Yeah. Semi sweet double IPA with, like a nice rep, representative of a hazy ipa, but nothing spectacular sticking out. No notes that I can cling to where I was like, oh, man, this was unique in this way. Okay, maybe a little pineapple Y vibe if I was going to pick.

[Matt]

No, I think you got most of it. That's probably how I would describe it as. Well. They don't claim to be hazy, but it poured a little bit hazy. But it didn't have like those sharp, hoppy notes that you get with some of the best New England hazy's out there. So it's drink like halfway between just a regular hazy IPA and more of a traditional American double.

[Joel]

Yep.

[Matt]

But I'm certainly glad, though, that we got to share one of these today, buddy. And that's gonna be it for this Ask how to Money episode. You can find our show notes up on the website. Some of the different resources we mentioned during this episode. Like, you mentioned the golden rules of credit earlier on we'll link to that. We'll link to the financial samurai engineering your own layoff. You can find all that up in our show notes, but that'll be it.

[Joel]

So until next time, best friends out.

[Matt]

Best friends out. This is an iHeart podcast.