Ask HTM - Covering Expensive Childcare, Fidelity Fees, & Frugal or Cheap Car Tires #940

Summary

Podcast Summary: How to Money - Episode #940 How to Money | Ask HTM - Covering Expensive Childcare, Fidelity Fees, & Frugal or Cheap Car Tires

Release Date: February 3, 2025
Hosts: Joel and Matt
Description: In this episode of How to Money, Joel and Matt delve into listener questions surrounding the rising costs of childcare, unexpected fees from Fidelity, and the debate between purchasing frugal versus cheap car tires. True to their mission, they provide unbiased, jargon-free personal finance guidance aimed at helping everyday individuals thrive financially.

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1. Navigating Expensive Childcare Costs

Listener Question:
Kelly from Richmond, Virginia, seeks advice on accommodating an upcoming increase in childcare expenses as her family prepares for a second child. She outlines her current financial strategy, which includes maxing out a dependent care FSA, contributing to an HSA, maintaining Roth IRAs, and participating in employer 401(k) plans.

Hosts' Response:
Joel and Matt commend Kelly on her solid financial foundation and offer strategic advice on reallocating her contributions to manage the additional $15,600 annual childcare cost.

• Maximizing Tax-Advantaged Accounts:
  "[...] keep the dependent care FSA because that's just getting a straight up tax break for money that you are going to be spending no matter what." — Matt [13:13]

• Prioritizing HSAs and Roth IRAs Over 401(k) Contributions:
  "[...] prioritize the HSA and the Roth IRA above 401k contributions that exceed the match." — Joel [14:26]

• Cutting Back on Expenses:
  "Look at everything, leave no stone unturned. Insurance, cell phone bills, streaming, eating out." — Joel [14:34]

• Advocating for a Pay Raise:
  "Push for a raise because there's something tangible that has impacted your life that you can kind of point to." — Matt [15:18]

Insights:
The hosts emphasize the importance of maintaining contributions to tax-advantaged accounts such as HSAs and Roth IRAs while considering reducing or pausing additional 401(k) contributions. They also suggest scrutinizing other areas of expenditure to free up additional funds and advocating for salary adjustments to accommodate increased family expenses.

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2. Understanding Fidelity's Fees and 401(k) Management

Listener Question:
Chelsea raises concerns about unexpected maintenance fees on her HSA account after switching to her husband's healthcare plan. She inquires about transitioning to a no-fee HSA account and maximizing the benefits of both her and her husband's healthcare plans.

Hosts' Response:
Joel and Matt address Chelsea's predicament by distinguishing between different types of Fidelity HSA accounts and advising her on selecting the most cost-effective option.

• Fidelity HSA Options:
  "There are two versions of the Fidelity HSA. One doesn't charge any account fees." — Matt [28:24]

• Importance of Choosing the Right Account:
  "Choose specifically for the self-directed Fidelity HSA, not the managed Fidelity GO HSA accounts." — Matt [30:41]

• Long-Term Benefits of HSAs:
  "The HSA is so tax advantaged, it's got a lot of times you hear it referred to as like the triple tax advantage, but really it's a quadruple tax advantage." — Matt [13:13]

• Seasonal Financial Planning:
  "Ensure that once [childcare costs] are reduced, you're ramping up your investments." — Joel [14:34]

Insights:
The hosts highlight the significance of selecting a self-directed HSA to avoid unnecessary fees and maximize investment potential. They advocate for viewing HSAs as long-term retirement accounts due to their substantial tax benefits. Additionally, they remind listeners of the cyclical nature of financial needs, advising to ramp up investments once high-expense periods subside.

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3. Frugal vs. Cheap Car Tires: Making the Right Choice

Listener Question:
Joe from Fairfax, Virginia, inquires about the merits of purchasing value tires versus name-brand tires for everyday driving without any off-roading or racing activities.

Hosts' Response:
Joel and Matt engage in a candid discussion about the balance between cost savings and tire performance, referencing Consumer Reports and personal experiences.

• Performance and Reliability:
  "According to Consumer Reports, the big name brands that you're used to seeing do perform better." — Matt [35:33]

• Cost vs. Quality Trade-Off:
  "Putting used tires on your car, especially if they're like mismatched used tires, it's not a brilliant move." — Joel [34:50]

• Recommended Purchasing Venues:
  "Where you can buy tires on that site and have them installed at a local shop. And yeah, again, look at those third-party reviews from a site like Consumer Reports." — Joel [43:04]

• Consumer Trust in Brands:
  "Consumer Reports tests, those nicer tires actually perform better. So you are getting a better product for your money." — Matt [35:33]

Insights:
The discussion underscores the importance of evaluating tire quality through reputable sources like Consumer Reports. While cheaper or value tires may offer immediate savings, name-brand tires often provide superior performance and safety. The hosts recommend purchasing from trusted retailers that offer warranties and free services like rotations and repairs, such as Costco, to ensure long-term value and reliability.

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4. Additional Highlights and Strategies

• Travel Booking Tips:
  Before delving into listener questions, Joel shares insights on booking hotels through platforms like Hotwire and Priceline, cautioning about hidden fees and encouraging booking directly with hotels for potential savings and better cancellation policies.

  "If you're willing to stay at an unnamed hotel that you don't know until you've actually gone through with the process, you can save the most money." — Joel [03:22]

• Listener Engagement:
  The hosts encourage listeners to submit their questions via voice memos and provide reminders about accessing resources and promotions mentioned during the episode.

  "If you have a money question you want Matt and I to tackle next week on the show, well, send us a voice memo." — Joel [06:42]

• Beer Review Segment:
  Joel and Matt conclude the content-heavy portion of the episode by reviewing a rum barrel-aged stout fermented with bretonomiasis, sharing their taste impressions and preferences.

  "The first thing that hits you is the rum sweetness... This had a little bit on the front end, but it dissipated quickly." — Joel [63:05]

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Conclusions and Takeaways

In this episode, Joel and Matt provide actionable advice on managing escalating childcare costs by optimizing tax-advantaged accounts and adjusting investment strategies. They also shed light on navigating Fidelity's fee structures, emphasizing the importance of selecting the right HSA options to avoid unnecessary charges. Additionally, the hosts dissect the frugal versus cheap tire debate, advocating for quality and performance backed by reputable sources to ensure both safety and long-term financial benefits.

Notable Quotes:

• "Make sure you're in the performance savings if you have an adult savings account with them, not the other savings account that pays the crummy rate." — Joel [54:48]

• "Invest it aggressively, let it grow, but then look on to just maybe some of these other ways that you can grow your wealth over time." — Joel [32:11]

• "Consumer Reports tests, those nicer tires actually perform better. So you are getting a better product for your money." — Matt [35:33]

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Resources Mentioned:

• Fidelity Rollover IRA: Fidelity.com/rollover
• Hotwire and Priceline: For discounted hotel bookings
• Consumer Reports: For unbiased tire reviews
• Costco: Recommended retailer for tire purchases
• Tire Rack: Alternative online tire shopping option
• HowtoMoney.com: For submitting listener questions and accessing show resources

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Promotions and Advertisements Skipped:
All advertisements, sponsorship messages, and non-content segments were omitted to focus solely on the informative parts of the episode.

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This summary encapsulates the key discussions and insights from episode #940 of How to Money, providing valuable financial guidance for listeners navigating childcare expenses, investment account fees, and automotive maintenance decisions.

Transcript

[Joel]

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[Joel]

Welcome to how to money. I'm Joel. I'm Matt and today we're answering your listener question.

[Matt]

That's right. Happy Monday everybody. And we are going to get to listener questions today, buddy. We're going to hear from a listener who's asking about some different ways that they can afford some expensive child care costs. We're going to talk about some of the different fees that Fidelity is charging. Gasp. Can you believe it Joel?

[Joel]

Fidelity say it ain't so.

[Matt]

And we're going to take more of a frugal versus Cheap. I guess we're going to talk about like the name brand, nice tires that you can purchase and put on your vehicle or maybe taking the more affordable route. I'm excited to get to that one and share with listeners maybe some of the ridiculous lengths that we might go to to keep the car maintenance bill down. And dude, having older vehicles. This is something that I've experienced But also that I look ahead and I see on the horizon in particular with tires as well, because I've got two tires that are older and I know those are gonna have to be replaced.

[Joel]

You've had a few bigger repair bills too, recently on the Minivan.

[Matt]

We're pushing 200,000 miles. And so, yeah, I won't get into it. There's a shop that we were going to that may not have been the absolute.

[Joel]

All right, well, one thing I wanted to mention briefly, Matt, before we get to listener questions, is some of the websites that allow you to book travel, and specifically hotels, cheaper than, or at least is what they advertise. You can book a hotel more cheaply through Hotwire and Priceline in particular than you can almost anywhere else on the Internet.

[Matt]

True.

[Joel]

And that's particularly true if you're willing to stay at an unnamed hotel that you don't know until you've actually gone through with the process. You say, all right, listen, I'm down to stay at any three and a half star hotel or whatever in this.

[Matt]

It's the mystery hotel, particular part of town.

[Joel]

And there's probably five or six hotels that are up for grabs. And yeah, just give me whatever one you're gonna give me. That's how you save the most money. I will say it's not always true and it doesn't always work out. And this is something I was helping my dad book a hotel room for for a trip that they've got coming up.

[Matt]

Did you see a discrepancy between the price on Hotwire as opposed to reaching out to them directly?

[Joel]

Yeah, exactly. Yeah. And surprisingly, when you were booking through, I think it was Priceline in particular, but the fees that are being charged were more significant.

[Matt]

Priceline fees? Yeah.

[Joel]

The Priceline fees can be more boisterous. I don't know that's a bad word. But they can be bigger than what you're going to pay when you go directly through the hotel. So I think, and hotels have kind of wised up to this too. And in the new era, they're willing to match prices that some of these online booking companies, these aggregators are charging. They know that that's their competition. And they are oftentimes offering discounts either on their website, you might have to put in a code or something like that, or if you call them on the phone and just say, hey, listen, this is the kind of price I'm getting on one of these aggregators. How much can you know? What sort of price are you able to offer directly? And So I just want to say I think some people have knee jerk, become accustomed to, to in habit form going to these websites, Priceline and Hotwire, and I think it's worth checking those websites out before you book. But it's also worth, especially if there's a hotel you like in the area you're staying and you feel like it's reasonably priced in comparison or you see a good price on Priceline, going to the hotel's website directly before you click Book. You might also have better cancellation benefits too, booking directly with the hotel. Whereas heck yeah, Priceliner Hotwire you, you might have zero ability to change or modify the reservation.

[Matt]

So dare I say, even picking up the phone and giving them a call, because maybe they haven't even updated the website to the latest discounts that they're offering, but they know that there's something that's out there and you could snag the absolute best room at the lowest price.

[Joel]

My dad found the hotel or directly from the hotel itself, saved a hundred bucks over the Priceline price and used to be, man, Priceline was the best and now I just think that's not quite as much the case. So we saved 100 bucks and it turns out the hotel has like a free car that they'll give you and for 3 mile radius rides. That's awesome. And so like they need you.

[Matt]

Like they give you a ride or you actually get to drive it?

[Joel]

No, they give you a ride.

[Matt]

Okay.

[Joel]

And so.

[Matt]

Oh, even better if you like a chauffeur. Yeah. Got a driver, babe. Yeah.

[Joel]

And so he was like, cancel my rental car too. I'm just gonna Uber and then take that little car wherever we need to go. So there's all sorts of ways to save on travel. That's a couple quick tips that picked up just from a recent travel booking encounter with my pops.

[Matt]

I love it, man. Let's introduce the beer that you and I are about to enjoy during this episode. And this is a rum barrel aged stout fermented with Bretonomiasis. This is by Wicked Weed and we've had plenty of Wicked Weed beers before, but I don't know if we've ever had the dark arts, which is I guess just a line that they're doing that's a little bit fancier.

[Joel]

Yeah, a little outside the box too. Right. Some kind of unique flavors they're trying to pull out of some of those beers.

[Matt]

Yeah. Looking forward to enjoying that. We'll share our thoughts at the end of the episode.

[Joel]

No doubt. Let's get on to Your questions, though. And if you have a money question you want Matt and I to tackle next week on the show, well, send us a voice memo. You go to howtomoney.com ask for the specific directions on how to do that. But really it's just recording your question on the voice memo app of your phone. State your name at the beginning and emailing it over. Hopefully we can take it real, real soon. Matt, this next question is one that I think is on the minds of a lot of parents of young children.

[Kelly]

Hi, Joel and Matt. My name is Kelly and I'm from Richmond, Virginia. I've been an avid follower since 2020. With your help, I've become really confident with saving money and investing. My husband and I are expecting our second child in March and will be paying for two kids in daycare. We are going to need to come up with 1,300 more a month or $15,600 a year to be able to afford this. In the meantime, we've done well saving. We have a fully funded emergency fund, a car payment at 0% interest, and a mortgage payment. We max out a dependent care FSA, an HSA as a family, two Roth IRAs, and we both contribute to our company's 401k to at least receive the match. My question is, which accounts do I decrease or completely stop contributing to to have more liquid income to afford this new change? My initial thought is to keep everything the same and only contribute $3,500 a year to each Roth IRA. So we can take advantage of that before we are over the income limit and then use the FSA and HSA to reimburse ourselves for daycare. Let me know your thoughts. Looking forward to hearing your advice. If you make it to Richmond, there's at least 20 breweries to visit. Most are in walking distance. Thanks so much.

[Matt]

All right, Kelly, thank you so much for listening to the podcast since 2020. Joel. That's back when I feel like that's when we were, we started taking it a little more seriously back then.

[Joel]

We've always taken it seriously. We just maybe we took it more seriously.

[Matt]

I mean, we did because early on we're like, we're not. We, let's be honest, we weren't looking for another hobby. We were looking for something for us to actually do. We wanted this, this podcast to take off and to succeed. But 2020 specifically is what I'm thinking of is when we launched the Friday Fight. Yeah, the episodes where we were diving into the news a little bit more. So KE appreciate you Being with us since then, I still.

[Joel]

I love doing the Friday flights, but can you. Do you remember, Matt, just how things were changing? Like, every. Every week?

[Matt]

It was fast moving back.

[Joel]

It was like shifting sand, and we were covering so much stuff going on. It felt like the Friday flights were like, it's so important back then. I still love those episodes, but, man, they were like, it's more of a.

[Matt]

Lifeline and a little more necessary at that point, especially because. Because we were recording, like, three weeks in advance at that point, and we weren't addressing the fact that there was a pandemic going on. And folks were like, hey, guys, how about something about this novel coronavirus that's hitting the streets?

[Joel]

We're like, oh, wait, we have to shift things up if we're gonna go full time.

[Matt]

Exactly. Yeah. But, Kelly, I also want to say congrats on the soon to be addition there to your family. It sounds like you have set yourself up well for the ability to make this pivot, to be able to grow your family to take on additional daycare costs, which are pretty significant. There's been plenty written about the rising costs of daycare, and my guess is that it's at least a part of the reason for the declining birth rates that we're seeing. Folks are like, I just can't afford, like, even just somebody watching my kid while I'm able to go out there and try to earn a living.

[Joel]

It does make you think twice.

[Matt]

The economics of growing your family has been getting a bit more difficult. And I think most families, they have to decide whether or not they can afford it. Many families that make the difficult decision of, you know, having a parent quit their job or at least maybe take a sabbatical hiatus, I don't know. Once they reach the point of having two or three kids. Right. Like, once there's a double triple ward score when it comes to those daycare costs, it gets a lot more expensive, and it doesn't make financial sense given the tax savings and not having to pay for. For childcare.

[Joel]

Yeah. Especially if they're preschool age. Right. Because once they start getting into kindergarten, first grade, and you got a couple at least in school, and then you're talking about maybe daycare for just one or two, then you can make a different decision. But you're right. Management, let's say you got three kids, five and under the child care bill can be astronomical.

[Matt]

I don't want to go back to.

[Joel]

Let's mention the diaper bill.

[Matt]

It was an awesome time, but I.

[Joel]

Appreciate where we are now also, yeah, I'm a little bit less tired these days than I was back then as well. But there's actually some new data out about, specifically about the cost of childcare. And out of the state of Tennessee. Well, they, they found that it costs more to pay for your child's daycare than it does to afford in state tuition for college. So you think about as a parent, you're, oh man, you got tons of time to save up for college. Well, you don't for daycare. Right.

[Matt]

And you got nine months, sucker.

[Joel]

Right, exactly.

[Matt]

Get your act together.

[Joel]

So childcare now costs more than college in 34 out of the 50 states. So again, for college you have, let's say 18 years to save, to invest, to prepare for the high expense. But you know, you just don't have that when you're talking about saving up and affording that childcare and having a kid has always involved trade offs and it has always impacted family finances. But it just does seem like the stakes are higher these days. And Kelly mentioned what $15,000 a year is what it's going to cost for kind of full time child care.

[Matt]

Well, I think she said $15,000 more to come up. So maybe 30, 30. Maybe she's even paying like forking out 30 annually for both of her kids childcare.

[Joel]

That's, it's a lot, that's a lot of money. But it also doesn't seem out of the realm of normalcy for like $15,000 a kid.

[Matt]

So specifically she's asking which particular accounts should you dial back on? And I'm going to say that your analysis I think is spot on. Definitely keep that dependent care FSA because that's just getting a straight up tax break for money that you are going to be spending no matter what. And then you know, you're mentioning dropping, contributing to your Roth IRA. I would 100% do that. I would. Because you mentioned you've got that HSA and rather than dialing back on that account because of the fact that the HSA is so tax advantaged, it's got a lot of times you hear it referred to as like the triple tax advantage, but really it's a quadruple tax advantage because you're also not paying payroll on any of the funds that are going into your hsa.

[Joel]

Payroll tax is underrated in how expensive?

[Matt]

Yeah. And you compare that to a Roth. Roths are awesome. We love Roth IRAs, but they only grow tax free and only get to be withdrawn once you hear retirement tax free. But that's Only two out of the four.

[Joel]

Yeah.

[Matt]

With an hsa, that truly is the ultimate retirement account. And given, I guess, how disciplined it sounds like you are and just how organized you are, for some folks, I would say that HSA isn't the way to go when it comes to retirement savings. Instead, you know what, just kind of hit the easy button. Let's just keep. Definitely get the match like you're doing with your 401ks. But then beyond that, let's just do the Roth IRA. It's super easy. But if you have the ability to stay organized to keep up with qualified expenses over the years, the HSA from an optimization standpoint is 100% the route I think you should be taking when it comes to prioritizing a retirement account.

[Joel]

Yeah, I think you're right, Matt. It's kind of tough to know which accounts to keep and which ones to cut back on. I think if, if Kelly was contributing above and beyond the match amount in the 401k, well, maybe I'd dial that back to just the match amount because I would prioritize the HSA and the Roth IRA above 401k contributions that exceed the match, if that makes sense.

[Matt]

Yeah, because there's more flexibility with the Roth ira. But beyond the flexibility, just the tax advantage, though, with the hsa, baby. Come on, you can't beat that.

[Joel]

I think it's also important to mention here, and this might sound just trite or silly, but what about cutting back on expenses so that you can. I think you're still going to have to cut back on your investments, but if you can cut back on some expenses, you might be able to continue investing more than you thought you would be able to. Right. So it's highly unlikely that you're going to be able to cut $15,000 out of your expenses and, you know, dial that back overnight so that you're able to invest just as much as you were before and then also afford this incredibly expensive childcare bill. But look at everything, leave no stone unturned. Insurance, cell phone bills, streaming, eating out. Right. Even. Even just like a hundred bucks a month.

[Matt]

Let's be honest, they're probably not going to be doing a whole lot of eating out.

[Joel]

Right.

[Matt]

In the coming months as well.

[Joel]

That's true, too.

[Matt]

It's a way to kind of pare back on the monthly budget.

[Joel]

That's right. Like, I think in those, you know, first months and first year, you're just eating out a whole lot less because it's just a pain in the butt. Right. To get out there with a newborn. If you save 100 bucks a month, that's 1200 bucks a year. And that's not nothing.

[Matt]

So, yeah, you might be able to.

[Joel]

Save a few hundred bucks.

[Matt]

And that coupled with dialing back the Roth IRAs, I mean, if they both have been, or typically at least max out the Roth IRAs, you're looking at $14,000 right there. And so just by shaving some expenses here and there, I think you could pretty easily hit that $15,000 mark, that dollar amount for childcare. Something else I would say, too, is I think that Kelly could use this opportunity to push for a raise because there's something tangible that has impacted her life that she can kind of point to. Because I think for a lot of folks, they might find it difficult to advocate for themselves. They might be doing amazing work, they might do an incredible job, but when it comes to the annual review or kind of being the squeaky wheel, they have a harder time saying, hey, you know, I think I'm worth this much. But when there's something that sort of feels like is outside of you that you can kind of point to, I think for some folks, at least, it could be easier to say, hey, I've got this bigger monthly bill that I've got to fork out every single month now. Hey, some companies, they offer childcare that's a benefit, that's a perk that they provide. We don't really do that here. So maybe there's a way that I could see some of those expenses deferred a little bit. It's just, I think, an easier way to advocate for yourself when it comes to maybe your next pay raise and the ability to continue investing while also covering this larger daycare cost.

[Joel]

Yeah, I like the way you framed it, too. It's not just like, I had a baby, pay me more. It's like, hey, actually, other companies who do something similar, we do have these additional perks that they offer people who have. Who have young kids. And I think the other important thing to mention, too, is that you can and should ramp up your investments in the future. Right? So like I was saying, there's this gap. It's typically four or five years, maybe a little longer, depending on how many kids you have and. And what the time span is of having those children that you're particularly hard up for cash because of those childcare expenses until you reach school age. And some people, Matt, they're prioritizing private school for their kids or something like that, or they're adopting to homeschool so they're having a reduced income from that as well. But in particular, if you're sending your kids to public school, that takes a huge expense then off of the line item of your budget. So make sure that once that happens, you're going back up and you're ramping up your investing. You're thinking of this just as a season that you're not able to invest as much, but you're going to hit it hard once you're able to get back on track. And those kids are not costing quite as much money once a car note goes away, by the way, that's one thing Haley mentioned. Invest that money.

[Matt]

That's true.

[Joel]

Right.

[Matt]

Even though she mentioned that it's got a zero percent. I think she said it's a zero percent car loan, which is great. You got to have an incredible credit score to be able to snag one of those.

[Joel]

But.

[Matt]

And you also need to be careful because oftentimes they roll extras into that because they're like, hey, you're getting such a great deal here. You may as well go for the undercarriage application to make sure it doesn't rust.

[Joel]

Right.

[Matt]

Don't you want that? Right. Then you end up paying a lot for the vehicle even though you're not paying financing costs. Yeah.

[Joel]

And I guess the last thing I want to mention here too, Matt, is there might be some creative ways to reduce the cost of childcare. And maybe that is going part time at work and you're able to still keep the benefits that you need and your Pay is reduced 25% or something like that, but you're able to spend more time with your child, but you're also not giving up work and you're not, you know, reducing your future career earnings. That there might be creative ways to kind of figure this out or some sort of nanny share if you've got other friends. Yeah. Who have some sort of. Who also have newborns. And you're like, listen, what if we all go in together?

[Matt]

Yeah.

[Joel]

This nanny's like 40 bucks an hour, but when you split it three ways, it's actually cheaper than our local childcare place. And maybe they're getting more individual attention. I think there are ways to noodle out ways to save on childcare. It's not easy, though.

[Matt]

That's right. But we've got more to get to. We will get to the cheap tires question, Joel, if Aldi sold tires, would you buy your tires from Aldi? Duh. We will get to that and more right after this. We've all got some old things laying around. But listen, if one of those things is an old 401k, well, it is time to take care of it. Whether you've recently left a job or you're just making time to get your finances in order, Fidelity can help you explore options for your old 401k. A fidelity rollover IRA has no account fees or minimums, plus you can choose from a wide selection of investments.

[Joel]

Learn more about options that may give you flexibility for using your money today and for your future. It's an easy to follow rollover process that makes it simple to get started online in under 15 minutes. And just in case you need any help along the way, you'll have access to one of Fidelity's rollover specialists. So why leave that 401k lying around? It's time to make sure you keep your money working as hard as you do.

[Matt]

That's right. Learn More about a 401k rollover at fidelity.com rollover consider all your options and the applicable fees and features of each before moving your retirement assets. Fidelity Brokerage Services, LLC Member NYSE Member.

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[Joel]

Matt we were able to get customized Indochino suits. We love them. Getting to customize everything, it kind of endears you to the final product in a different way, including the best friends out embroidering on the inside of the jacket takes a couple of weeks for your custom suit to arrive. The fit and the fabric though, they're second to none. I feel like a total stud when I hit up a wedding in my Indochino suit. My next one though, it's going to be tweed.

[Matt]

Matt Ooh, I like it man. Yeah. You can even set up your measurement profile on Indochino's website and you can choose customizations without even leaving the house. Or sign up for a premium in person experience just by booking an appointment at a showroom near you and let an Indochino style guide walk you through every step. For your 2025 plans. Look your best in Indochino. Visit Indochino.com and use code how2money to get 20% off any purchase of $499 or more. That's 20% off at Indochino.com promo code.

[Joel]

Howtomoney as every business owner knows, inefficiency will cost you time and money. Too many meetings, for instance, can be burdensome and ineffective. That's why we schedule a quick planning meeting every morning. It helps HTM run smoothly.

[Matt]

It's the morning cuddle.

[Joel]

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[Matt]

Joel yeah, it's easier than most people think. And trustin will's simple step by step process guides you from start to finish, one question at a time. Personally, I felt such a relief, just a weight off of my back once I was able to check that off my to do list a few years ago. It is a great idea to keep your family prepared and protected by managing your will or trust online. Each will or trust that you create is state specific. It's legally valid and customized to your needs. Ensure that your family and loved ones avoid that lengthy, expensive legal proceeding or the state deciding what happens to your assets by going with trust and will.

[Joel]

Uncomplicate the process with trust and will protect what matters most in [e-mail] howtomoney and get 10% off plus free shipping. That's 10% off and free shipping at trustandwill.com/how to money all right, we're back. We've got more of your questions to get to more your money questions. Matt, let's get to a question about an old retirement account and some fees that this listener is really worried about.

[Chelsea]

Hi Joel and Matt, My name is Chelsea and I really enjoy your podcast and I was hoping you might be able to help answer a question for me. So my family, which is my husband, our two young daughters and myself, we've been on my employer's high deductible health care plan for the past several years and I've contributed the annual maximum to my HSA health savings account. But earlier this year my husband got a new job and we switched to his health care plan and I now max contributions to an fsa. But that means I can no longer contribute to my HSA and I just noticed that I'm now paying a $5 per month maintenance fee on my HSA account since I'm no longer making new contributions. So I was wondering if you had any advice on a no fee HSA account that I could transfer it to. I looked into Fidelity, but the fees for balances over $25,000 would be more than what I'm currently paying. And I guess did you have any other ideas potentially too about how we might maximize both of our health insurance plans? I kind of looked into this when we initially switched, but it seemed pretty complex with trying to combine FSAs and HSAs. And I honestly just went with one plan for simplicity. But I'm wondering if I maybe am not maximizing the options we have there. So yeah, I would just really appreciate any advice that you had for I guess using the two healthcare plans or just options for no fee HSAs. Thanks a lot Joel.

[Matt]

I noticed that you said a retirement account, which is exactly how we should be thinking about the health savings account, not as a way to cover healthcare expenses.

[Joel]

It's just not how most people think about it. Indeed, it's partly because of the naming convention.

[Matt]

So condolences Chelsea on the loss of your retirement account, which feels overly dramatic.

[Joel]

Can we play some like funeral dirge.

[Matt]

Music back the fsa? So the flexible spending account for healthcare expenses, that's solid, but it's not nearly as good from a long term perspective, which is how we like to view the Health Savings Account, but still, it's amazing that you've been able to sock away more than $25,000 into your HSA. And honestly, that's a good problem to have. The fact that you have this account that's available to you because it's open, because you have money in there that you've been so diligent about putting money in there that they're now saying, hey, you can't get something for nothing. Why don't you send some of your dollars our way? This is something that we want you to avoid, especially given the fact that this is something that you're going to in perpetuity. Right. The fact that, like, we're talking $5 a month, but, like, chances are that dollar amounts are going to go up from here. And the fact is you're probably planning to hang on to this account for 20, possibly 30 years.

[Joel]

Yeah, that's right.

[Matt]

A lot of months of paying this perpetual fee.

[Joel]

So if you can find a way to nip it in the bud now, yeah, five bucks a month sounds minimal, but five bucks a month, repeating every single month for decades.

[Matt]

That's the worst part.

[Joel]

It adds up. Yeah. The truth is, though, on the HSA front, Matt, the average HSA comes with fees like this. So, you know, almost all HSA providers charge an annual or a monthly account fee. Many have really subpar investment options, too. So While we love HSAs from a tax perspective, but when you look at the providers who are offering HSAs, they impose more fees than what you're able to get, typically in the 401k or IRA sphere. So these accounts, they have their issues to contend with. Even though we like them, it doesn't mean they're perfect. And again, that varies significantly, provider to provider.

[Matt]

Sure. And even within providers, I'm sure you thought you turned to the right place when it came to going to Fidelity, especially all that we've said about them having the best HSA in existence with essentially zero fees.

[Joel]

We were like, did Matt and Joel lie?

[Matt]

No. No. There. So there are two versions of the Fidelity hsa. One doesn't charge any account fees. And this is the one that we've talked about here on the show. No $5 a month, nothing. No percentage of your assets once you reach a certain threshold. But I think that possibly what you saw is that. Is that if you are a Fidelity Go customer, which is their. It's more of a. It's a newer offering. It's kind of like a robo advisory sort of service. You'll have to pay a 0.35% fee which can really add up. It would, it would quickly be more than the $5 a month that you're currently being charged that's on balances over $25,000. So even, even that right there, you're looking at, I think it's something closer to 88 bucks right out of the gate every single year as opposed to paying that, that flat $5 a month leading to $60 a year.

[Joel]

Yeah. And as the balance grows like that, 88 is going to turn into a heck of a lot more as your HSA continues to crush if invested in the stock market. Right. And Matt, this is actually, this makes me think of something we've talked about in the past is Fidelity's target date fund offerings. They have two different versions of that as well. And so this can be confusing to people who go to Fidelity's website. It has confused me in the past. And one of those target date offerings is vastly inferior to the other. One comes with like a 0.8 expense ratio and the other is like a 0.08 expense ratio.

[Matt]

So the ever so similar, oh so different.

[Joel]

Yes, exactly. So the same thing is true here with this hsa. If you go the wrong path and you, you can opt for the expensive one but you certainly don't have to and we would recommend the cheaper version on both accounts. So you want to opt specifically for the self directed Fidelity hsa, not the managed Fidelity GO HSA accounts. This also means you're going to be able to choose your own investments including and this is what we recommend typically for the average investor in the wealth building phase of their life, a super low cost S&P 500 fund. They also have their better target date funds at your disposal inside of your the self directed HSA as well. So we would say yes, go ahead and make the switch to Fidelity. You will get rid of all those account fees, let those HSA dollars grow without paying any fees at all. Just got to make sure you choose the right one.

[Matt]

Totally. And my guess is that you switch to your husband's new healthcare plan because it just makes more financial sense for your family. You mentioned your two daughters, you know, like that despite losing access to an hsa, I'm assuming that you've got superior coverage for less money and that's great. This is an instance where we don't want the tail to wag the dog. And I'm actually going to go revisit something I said about the condolences on the HSA because I Would like to maybe. Let's change the language around here a little bit. I'm going to say that there is a perspective shift when it comes to how you view your hsa. Like, I want you to look back at your HSA and think, you know what, it was so great to be able to sock that money away when I had it, but now there are other benefits that are available to me, or even if there's not additional benefits, let's say, just as decent of a plan. Things change, seasons change. Joel. As the philosopher group Future Islands once say, not to get too sappy. It makes me think of a friend who recently was talking about how she misses her babies. Like her girls are growing up now and they're no longer babies or no longer in that kindergarten sort of phase of life. But you know what? There are some massive advantages to when your kids are able to wipe their own butt and feed themselves and to clean their own room.

[Joel]

I'm not mad about that.

[Matt]

I'm not mad about it. And so it's just a different stage of life. And so as opposed to thinking, man, just pining for the HSA and what was at that point the sweetest account that you had access to? Things are different now. Yeah, you still have that account, certainly invested, invest it aggressively, let it grow, but then look on to just maybe some of these other ways that you can grow your wealth over time.

[Joel]

And you and I, we have always sung the praises of HSAs and talked about the massive benefits that they can bring. All the while, you and I, neither of us have had access to an hsa.

[Matt]

I've never contributed to an hsa, ever. Yeah.

[Joel]

So part of me is like, oh, man, wouldn't it have been nice? But also, you kind of have to work with what you got. And some people, a lot of people listening, don't have access to an hsa. Either they're not in a high deductible healthcare plan, or they don't have the additional funds to stick into an hsa.

[Matt]

Yeah, they're like, great, guys. I wish I could use all those dollars to be able to invest for my future as well, but I gotta spend that on whatever sick visits that are bleeding us dry every time we have to go in to see the doctor.

[Joel]

Sure. Especially newer how to Money listeners.

[Matt]

Right.

[Joel]

They're like, I'm trying to pay off your credit card debt, guys. Let's talk about that. And we will. We talk about that on the show too. Matt, let's get to our next question. I think this one's A good frugal or cheap. Specifically about the tires you put on your ride. Hey, Matt and Joel, this is Joe from Fairfax, Virginia.

[Matt]

I had a question about tires. My dad always bought the cheapest value.

[Joel]

Tires and you know, said the reason.

[Matt]

He did that is because they're so highly regulated you can't really buy a bad tire in America. So that's what I've always done.

[Joel]

But I was just curious what your.

[Matt]

What you guys do.

[Joel]

Do you buy the value tires or do you see any reason to upgrade? We're just driving around town, not doing any off roading or anything crazy like that.

[Matt]

Thanks a lot. Oh, I actually know very little about automobile tire regulations, Joel, but I feel like this is a classic. This is such a great frugal or cheap. It's a question of do you. Are you able to gain the value out of something that you're paying a premium on, that you're paying more than maybe what's necessary out of something that pretty much everyone out there who's driving around something that they are faced with on a fairly regular basis?

[Joel]

Yeah, it is a good question. It's basically part of the question is, are there, you know, the equivalent of store brands and name brands in tires and am I getting the additional benefit out of paying more for the name brands once I see all the commercials for. So we will talk about that. And Matt, I think part of this comes down to people's income, money, gear, where they're at in their money progress, and kind of what financial goals they have for themselves as well. When I was first starting out, I was so intent on saving every penny that I even bought used tires at times at those roadside shops. We've all seen them. Some of them are like 24.7o. I just was, I thought, oh, this is gonna help me save money on the tires I need to upgrade because they're what, 35 bucks a pop or whatever.

[Matt]

So I'm thinking of one that used to be in our old neighborhood on the main street. Is that what you're talking about?

[Joel]

No, I never got them there. But that was a shady one. That was a really shady one.

[Matt]

Yeah, that's one that I feel like I'm like, where did you get these tires? Did you pull these directly off somebody that was parked in an overnight parking lot? No.

[Joel]

It's weird and I think the truth is it probably saves you money in the moment, but it's not the best long term money saving strategy. Right. Like putting used tires on your car, especially if they're like mismatched used tires. It's not a brilliant move, I think.

[Matt]

I'm glad you've come around, Joel.

[Joel]

I mean, we all did things, at least I did in my 20s to experiment to save money that I'm no longer willing to do. We've talked about donating plasma on the show before. Right. And at the time when my income was not great, donating plasma made more sense from a time perspective. Right. I was willing to donate my time for 50 bucks because. Or 40. But I forget what plasma used to.

[Matt]

Pay, but you can probably more like 150 today it might be with inflation. That sounds pretty good. The cost of one tire right there, right?

[Joel]

Exactly. But yeah, I just am not willing to do it. I also didn't have kids back then, so the hoops I would jump through to save a buck were significant. I value my time more than I did and I'm just no longer willing to go to those lengths.

[Matt]

Totally. I think it's also worth pointing out that. So according to Consumer Reports, the big name brands that you're used to seeing do perform better. So like Michelin, Continental, they, yes, they do spend more on advertising. It takes maybe like a split second to recall the Michelin man. We can all picture him in our minds. Or even Continental even likes food too.

[Joel]

Right. He gives like star ratings to restaurants.

[Matt]

Which is a whole. Another fascinating thing that they were. Yeah. How the Michelin guide came about. But Continental, that, like, I feel like a lot of folks, or at least I can see the typeface written out. Like they've kind of got like a unique script. Like I don't even watch racing or like Formula one. But I feel like I can picture it written on the, like, what are the barriers, you know, like on the side of the track. But the fact is that according to Consumer Reports tests, those nicer tires actually perform better. So you are getting a better product for your money. Specifically Michelin and Continental, I think they're like number one and number two when it comes to tire performance. But I think the biggest question is, do you need that additional performance? And he said, Joe, he said he's not doing any off roading or anything like that. Are you also doing any like high speed racing? What kind of cornering are you doing? Because that does have an impact, at least for me. The money that I would be willing to spend on tires and specifically not just like how I'm driving, but if there's somebody else driving the vehicle. Like, luckily we don't have teenage drivers yet, thank the insurance gods out there. But when the time comes and we've got kids who are driving, I think I'm going to be less prone to maybe take the more affordable tire. Like every additional bit of performance is something I'm going to kind of be kind of weighing in my mind of like, all right, maybe I do want to spend $20 more per tire in order to get the higher performance version. Where are they going to be driving? That's something else I'm thinking of too. Like if it's just like you, Joel, where when it's pouring down rain sometimes, occasionally you'll like drive into the office. We don't every single day walk or ride our bikes to the office.

[Joel]

Just 96% of the time only.

[Matt]

Probably like 98, 99% of the time you are walking or riding your bikes. But if you're just putting around town on surface streets. Right. Like on low speed streets, there's a big difference in what I'm expecting out of my tires as opposed to someone who's on the interstate constantly. You know, if you are regularly driving 80 miles per hour. Okay. And the conditions vary, like if it's pouring down Raid, well, I'm going to be more likely to go with a higher performance tire, something that rates better. And I'm going to be more likely to swap those tires out as well once they, once the tread, once it starts getting, what do they say, like below 5, 30 seconds of an inch or something like that to be like, start planning on replacing your penny to.

[Joel]

Check the tire depth.

[Matt]

Right. But I think if it was just me driving Joe, I'm gonna be much more willing to roll the dice a little bit, drive a little more carefully, knowing that, hey, my stopping distance might be a little bit increased. But with all those other factors in mind, I think that might steer me in a slightly more performance minded direction.

[Joel]

So Matt, I don't know about you, but where I get my tires now is Costco. And so, so would you get your.

[Matt]

Tires from Aldi, Joel, if that's something that they, that they stole?

[Joel]

Well, I would want to read the reviews, but my assumption is based on everything else Aldi churns out is that they do pretty solid stuff for a lot less money. And so if they followed that same program with, with tires, I'd get my brand new tires at Aldi.

[Matt]

What if they're on like the seasonal aisle where you've got like the Christmas decorations or the. They're selling at a discount and there's also four tires.

[Joel]

Just install them yourself. Yeah, I'm probably not Doing that. Yeah, I wouldn't do that. So I think Costco is such a great place to go, especially when they have, like, quarterly sales and you can get 80 or 100 bucks off or whatever it is. It might not be the absolute lowest price, the absolute best deal that you can get, but it's a competitive price. And then on top of that, here's why I like buying from Costco. There are other significant benefits that a whole lot of people that you kind of underrate. You're looking at, like, the walkout price, but then you're not looking at the benefits after the fact. Right. The warranty and maintenance. That adds a lot, I think, to the value proposition that Costco offers. If you need to get your tires rotated or balanced, think about how much money that can cost over time. Or you just need a tire plug because there's a. There's a hole in your tire. It's free. If you bought your tires at Costco.

[Matt]

True.

[Joel]

And Matt, you're talking about the difference between performance levels of different tires, and I'm not. I have not done enough research to know how. How different like one Michelin versus a B.F. goodrich versus a Continental can be. If you want to wade into those weeds, you totally can. I'm just looking for a good tire at a solid price and ordering from a company who stands behind the product and the installation. I think, yeah, Costco is that they hit that sweet spot for me. I'm paying more than I used to buying used tires, but at this point in my life, it's. It's worth it. And part of it is just kind of the peace of mind that provides. Sure.

[Matt]

If you can get an appointment scheduled with our local Costco is. I tried for multiple weeks when it came time for us to get our tires replaced, and I couldn't get on the freaking schedule.

[Joel]

Oh, really?

[Matt]

And that was even when they would pick up. They're like, yeah, we're booked for. Are you talking, like, two weeks from now? And I'm just like, well, geez, I don't know. I was looking at, like, this coming Friday. And so that being said, I was wanting to do Costco because they did have a decent sale coming up, but I guess when they do have their sales, they. The calendar gets really full.

[Joel]

I bet.

[Matt]

And so instead, I reached out to the discount tire, and that is where I went. And they. When you buy a tire from them, they also do free flat repairs. They do free balancing, free rotations on tires that you purchase and that they install. And there you can also buy just more like off brand tires. And so specifically, the last time I was there, when I got two tires replaced, I was able to go with this Falcon brand.

[Joel]

Oh, yeah.

[Matt]

So it's not falcon.

[Joel]

I was gonna make a bird han crook or something like that.

[Matt]

No, honestly, I think falcon rates higher. So it's F, A, L, K E, N. I think they rate higher. Falcon like Rylokin, I guess. I don't know.

[Joel]

That's funny.

[Matt]

Yeah, but so I was standing there in the, like in the store and he mentioned that these were like a good value. And so I literally pulled it up on the spot and was able to see that these falcons rate pretty dang high. They're not as. They're not better, bro.

[Joel]

You getting those TEMU tires?

[Matt]

Oh, kind of felt like that when he mentioned originally. But when I pulled them up on Consumer Reports and saw that they were like fifth and they were only the fifth one down from, you know, the Michelin man, I was like, okay. I felt pretty good about it. I was like, hey, let's go with those Falcons and add a note of confidence. He's just like, good choice. Actually, those are the exact same tires I have on my car. That's anecdotal, but it still made me feel. Feel good about it.

[Joel]

I think it's a good point to, to point people towards a third party, unbiased tire reviewer, and that is Consumer Reports. And I sure, I trust Consumer Reports when it comes to car reviews and reliability ratings. Why not also look at tire ratings as well? And I think if you, if you're, if they're in that, if they're in that top upper echelon, that top 20%, I'm, I'm more than willing to consider a tire brand I've never heard of. If Consumer Reports. Those are good.

[Matt]

They're even. They're way better than Goodyear. I remember being surprised because I'm like, okay, who, who are they better than? And it was like, they're better than some of these other name brand tires that you had heard of. It's attorney to Consumer Reports because in the store he also had like their own reviews, you know, like their own sort of database where they're like, okay, this number of customers rate this one, you know, this highly, that kind of thing. And I tend to be a little more skeptical. So I'm like, all right, man. I don't, I'm not sure if I'm going to trust the, the, the discount tires review reviewers as opposed to seeing it third party. But for Me, that was a big vote of confidence.

[Joel]

I think last place that you might want to consider looking at tires is tirerack.com and that's one I've never checked out. Tire Rack. Yeah, they're great. And you can kind of buy tires on that site and have them installed at a local shop. And yeah, again, look at those, those third party reviews from a site like Consumer Reports. And then you can do some shopping online. And maybe Tire Rack's got a better price than kind of what some of these other shops are offering or what, what Costco is offering. And again, if it's hard to schedule that appointment at Costco, then it makes the price null and void.

[Matt]

Right. I get it though. Right? Like if you are already going to be at Costco, you're already gonn shopping. Go ahead, schedule that thing. Do you have to, you have to schedule it, right?

[Joel]

Yeah.

[Matt]

You can't just like show up and expect to be seen.

[Joel]

Good luck.

[Matt]

Yeah. So the ability to drop your vehicle off, do all the typical shopping that you would do in the same location, I completely understand the convenience. And so I think for a lot of folks it comes down to what is going to be easy for them to access, what is going to be convenient for them. And for some folks, I've even heard that Walmart is a solid, solid spot to get tires as well. And I think a lot of it depends on the individuals who are working at the specific stores there near you.

[Joel]

No doubt. All right, Matt, we've got more to get to, including we have a listener who wanted to weigh in on a recent Friday flight segment. We'll get to that and our Facebook question of the week right after this.

[Matt]

We've all got some old things laying around, but listen, if one of those things is an old 401k, well, it is time to take care of it. Whether you've recently left a job or you're just making time to get your finances in order, Fidelity can help you explore options for your old 401k. A fidelity rollover IRA has no account fees or minimums. Plus you can choose from a wide selection of investments.

[Joel]

Learn more about options that may give you flexibility for using your money today and for your future. It's an easy to follow rollover process that makes it simple to get started online in under 15 minutes. And just in case you need any help along the way, you'll have access to one of Fidelity's rollover specialists. So why leave that 401k lying around? It's time to make sure you keep your money working as hard as you do.

[Matt]

That's right. Learn More about a 401k rollover at fidelity.com rollover consider all your options and the applicable fees and features of each before moving your retirement assets. Fidelity Brokerage Services LLC Member NYSE Member.

[Joel]

SIPC what does the future hold for business? Ask nine experts and you'll get 10 answers. Will we have another bull market in 2025 or we're going to get a bear market? What about inflation? Will it continue to calm or will higher prices remain sticky? Wouldn't it be cool if someone could invent a crystal ball that would give us some foresight?

[Matt]

Well, until then. Joel Over 41,000 businesses have future proofed their business with NetSuite by Oracle, the number one cloud ERP bringing accounting, financial management, inventory, HR into one fluid platform with one unified business management suite. There's one source of truth giving you the visibility and control you need to make quick decisions. With real time insights and forecasting, you're peering into the future with actionable data. When you're closing the books out in days, not weeks, you are spending less time looking backwards and more time on what is next. Our business is really small, but if we needed netsuite, we would be pumped about the time the cost savings that it provides. Whether your company is earning millions or even hundreds of millions of dollars, NetSuite helps you to respond to immediate challenges and seize biggest opportunities.

[Joel]

Speaking of opportunity, download the CFO's guide to AI and machine learning at netsuite.com howtomoney the guide is free to you at netsuite.com howTomoney that's netsuite.com howtomone Living in the present is an important practice, but we simultaneously need to plan well for the future too, and ensuring that your family is taken care of is paramount. You can protect your family by securing their future with life insurance from policygenius. Policygenius makes finding and buying life insurance simple and ensures your loved ones have a financial safety net they can use to cover debts and routine expenses or even invest that money to earn interest over time. With policygenius you can find life insurance policies that start at just $292 per year for $1 million of coverage. Some options are 100% online and let you avoid unnecessary medical exams.

[Matt]

That's right. And Joel, I will say as I get older, I think attempting to minimize regret, that has been a helpful lens in order for me to to view the world. It helps me at least to make good decisions and if that resonates with you. Well, get this, 40% of people wish that they had gotten life insurance at a younger age. So we're trying to help you out here by getting policy genius on your radar. Let's get rid of that. Could have, should have, would have, regret. And I love that you can compare quotes from America's top insurers side by side for free with no hidden fees. It's the best online insurance marketplace out there.

[Joel]

Yeah, secure your family's tomorrow so you have peace of mind. Today, head to policygenius.com to get your free life insurance quotes and see how much you could save. That's policygenius.com Ever wonder what it's like.

[Capital One Ad]

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[Matt]

All right, buddy, we are back from the break and we're gonna get to a question pertaining to the msrp, the suggested retail price of lost teeth on kids. But first, Amber. She's actually got a response to a recent how to Money segment.

[Amber]

Hey, Matt and Joel, this is Amber from Vancouver, Washington. I just heard your Friday flight where you were talking about Capital One getting into trouble over savings accounts. Now, a while back, I had ING Direct as an online savings account which was bought by Capital One, and after a while they started announcing that they were doing the higher interest rates. I forget what it was at the time, but it was like 3% and I never saw that in the bank in the savings accounts that I had with Them. And around that time I think Ally had some special transfer offer. So I just moved everything over to Ally and didn't think twice about it. Later I was talking to a friend and he mentioned he called them because they were advertising this rate that he obviously wasn't getting on his Capital One savings accounts. And they told him, oh, you have to actually call us to convert your account from this old type of account to a new type of account. So even though they were emailing us and saying, hey, guess what? New interest rate, they weren't actually applicable to the accounts that we had. So something to think about. And no, I haven't looked into this lawsuit or whatever, but that's what it made me think of when you mentioned have a great day.

[Joel]

Okay, Matt, Amber is specifically referring to the lawsuit we mentioned. The Consumer Financial Protection Bureau levied a lawsuit against Capital One. And it is true. Capital One had multiple savings accounts paying different rates. And the CFPB said you guys were being real shady about that. Paying some people a really high rate of interest on savings accounts and paying other people next to nothing. One rate was super sweet, the other not so much. And the thing that Capital One is kind of in trouble for is they didn't point this out to customers in an attempt to help them secure the best rate. The customers who knew better asked for that account or opened that account online. And the ones who didn't kind of suffered in not getting paid very much on their savings. We mentioned on the Friday flight that this was kind of shady. It is a shady practice. We even talked about it many, many months ago when we found out that Capital One had these two accounts and people were getting frustrated by it. And we said, listen, make sure you open the performance savings account. That one pays a heck of a lot more. But we also noted that Capital One's less beneficial savings account, their worst one, was still better than what the big banks are offering. So we thought it was interesting that the CFPB targeted them. When the big banks pay nothing on savings have for many, many years and they never get in any sort of trouble for not caring about their customers. I don't know where this lawsuit is going to go, but I do think it is incumbent upon us to know the rate that we're getting paid and to move whether that's to a different bank account within the bank we currently do business with or it is to another bank altogether if the rates and or the customer service are not up to snuff.

[Matt]

Totally. And this is a great excuse to be able to Talk about ING Direct, which Amber mentioned. I'm guessing there's a lot of folks or a lot of listeners who don't know anything about ING Direct. They had the lion. You remember the like the lion logo. They were the best. And specifically their Electric Orange account, which was a great name, was, it's like, hey, we're on the Internet, it's electric. But they were really, they were the first customer centric online bank out there. They changed things from the ground up. They ushered in like this new era of service. I think it was like, was it oh five Joel, Is that what like when I think back, that's, that's when I remember signing up for my ING Direct Electric Orange account. But because of them, I don't think banks like Ally or CIT or Discover, I don't think they would even exist in their current formation had ING not paved the way. And then of course Capital One came along. They bought ing. Everyone was nervous, ourselves included. But Capital One, for the most part, it hasn't changed much of the service that they were offering at that point other than of course the name. And even with this sort of what I would call a short sighted 2 savings account misstep, I'm still a fan of Capital One. It's where we have our business account. And Joe, I know there have been times when you've had all of your money over there with Capital One as well.

[Joel]

Yeah, I have accounts with multiple banks. Capital One is still one of them. And I just actually opened up a new account or two new accounts with Capital One.

[Matt]

Were they offering a bonus?

[Joel]

Well, no, they offered the best in my estimation from all my research. Kids accounts. So if you want savings accounts with debit cards for your kids and you don't want to pay. You know, we've talked in the past about Greenlight and go Henry, those are great specific apps set up to help teach kids about money and they offer them a debit card and those are fun and great, but those cost money. And so if you want a free option with less bells and whistles, Capital One is the only one I know of offering something like that. They call them teen accounts, but you can actually open them up for kids who are even younger. My girls are 9 and 11. I think they just have to be 8 and over and so they just.

[Matt]

Have to be alive. Yeah, no, I have a child.

[Joel]

I don't think my 5 year old would qualify. I think they do have to be over a certain age, but they, the Capital One is still offering a lot of great perks And I guess I just don't think the CFPB lawsuit should cause anyone to balk at doing business with them thinking, oh man, this is some sort of, you know, cruddy institution. They're not treating their customers right. I just don't think that's the case. And again, make sure you're in the performance savings if you have an adult savings account with them, not the other savings account that pays the crummy rate.

[Matt]

I think those are called post teen accounts.

[Joel]

Yeah, that's right. Yeah. But I guess if it does give you pause, seeing this lawsuit or seeing the way Capital One acted in this case, Ally and cit, those are great alternative choices for where to put your money. But I guess I just want to highlight, man, there's a lot of great stuff and both Matt and I do business with Capital One. And so this one faux pas, it's not going to change my relationship with them.

[Matt]

It wouldn't. Yeah. It wouldn't personally make me nervous. So, speaking of kids and money, let's now get to the Facebook question of the week, which is from Wendy. She wrote, my kids are just starting to lose their teeth and someone suggested that the tooth fairy leave. Well, tooth fairy is capitalized, which is kind of cute as well.

[Joel]

It's a proper noun, Matt, a proper entity here.

[Matt]

Someone suggested the tooth Fairy should leave $5 enough to spend, donate, invest and save. Realistically, what can a 5 year old start investing in? And how. What do you think about that, Joel? Five bucks. What is the suggested retail of a tooth over at your house?

[Joel]

That's a good question.

[Matt]

That's not what I'm paying.

[Joel]

I'll take that five bucks. I was shocked to see, and maybe that is the going rate and inflation has just been tamed on the tooth front in our house in particular.

[Matt]

Maybe this is the tooth fairy from the Bay Area or up in Manhattan or something like that.

[Joel]

Yeah, maybe on the elite coastal cities.

[Matt]

This is what the tooth fair tooth fairy in Tokyo, in London, what she.

[Joel]

Pays, our tooth fairy pays $1.25. But on top of that, our tooth fairy leaves a kinder egg under the pillow of each kid. So it's kind of like the opposite.

[Matt]

Of what the tooth fairy should be advocating for.

[Joel]

Sure. I'm sure dentists everywhere are shocked and appalled by what our tooth fairy leaves. But I just don't feel the need, I think, to fork over five bucks per tooth per kid tooth fairies, because, you know, other people around you are doing it. It's totally fine if you want to, but that really can add up, man. Five bucks a tooth is a lot. Yes.

[Matt]

I mean, I guess if you want to use those two, three dollars to start teaching about donating, saving and investing, that's certainly admirable. But I would push back on the fact that a larger dollar amount would allow you to do that more easily. Because I'm just going to think back to a long time ago, back when I was a little kid and when I was getting paid for jobs by my parents. It was typically like a dollar to do something. And guess how I received that dollar? It wasn't a single $1 bill, Joel. I was paid in dimes, So I received 10 dimes. And this was, I think, in part because my dad wanted to. My parents were teaching me how to be generous and how to be a giver, specifically how to tithe and give money to our local church. And it was like, all right, you always take off one of those dimes and that's the dime that you give. And so as long as you are paying your kids or whatever they're receiving from, the tooth fairy is. Isn't just like a bill or denomination that's difficult to break down. I still think there are lessons you can teach, and I still think that the kids see that as valuable as well. Like, I guess what I'm pointing to is the fact that, like, at least with our younger kids, they don't see like, bills being more valuable as coins. Like for them, you mean? I'm thinking of my five year old. He thinks the more coins he gets, the better.

[Joel]

Just more units, more denominations. It's less about the actual dollar amount, it's about having more to play around with. Exactly.

[Matt]

And so I almost think, like, I don't know. As long as you can break it. Yeah. I don't want to say the more the better or it's better to have coins, but as long as you are giving them money or that they are earning money or that they are gifted money in a way that allows them to direct that money in different ways, whether it is saving, whether it's investing, spending it at the store, or giving that money away. I think that's, to me, like, that is the task that falls upon us. Like, that's where we as parents are incumbent to make sure that we are not being. I don't, I don't call it laziness, but like, it's pretty easy to say, all right, here's, you know, a $5 bill or here's a $1 bill, as opposed to having to take bills into the store, breaking up bills from 20s even down to ones to where we can even pay our daughter for babysitting, like that kind of thing. That's literally a situation, a scenario that we found ourselves in recently where I'm just like, man, we need more ones. But we always use our credit cards because we're looking to maximize the advantages that we're receiving via points and all that. But what we need to do is go in, break up some of those 20s so that we can more effectively pay our kids for some of the different chores and jobs that they're doing.

[Joel]

But they look at your little askance when you're like, I need 100 ones. What are you up to, sir?

[Matt]

Yeah, I've literally had, not even joking. I've had this on my to do list to take a 20 or a couple 20s in and just, you know, next time I'm at Aldi to say, hey, do you mind breaking this into a 10, you know, a 5, 5 ones, like just something other than a large bill that the kids can do something with.

[Joel]

And you're talking about kind of the coin approach of the five year old. I think that works with a five year old. Less so with a 10 or 11 year old. Right, because totally. Then at this point understand money and how having more dollars as opposed to more units. Right. More coins actually impacts their ability to spend or to do the things they want to do. So you can't really get away with that once the kids get a certain age. But five years old, you totally can. And actually you might be helping them by doing that. And I don't want to discourage you from teaching your 5 year old about investing or some of these finer points of personal finance, you know, that tooth fairy money, it might be able to help out in that regard, but I think given their lack of real financial resources and their ability to understand maybe as much as you'd like them to at that age. Like I'm still trying to talk to my 11 year old and 9 year old about investing and it is slow going. Yep, my five year old. I have a five year old too. Yeah, that conversation is not going to go over well.

[Matt]

Is there a sword involved?

[Joel]

Yeah, exactly. He's going to be like, okay, not interested.

[Matt]

Sorry, bud.

[Joel]

Got it. Dad, can we just like play with cards or something? And it's not really that you can't have any sort of productive money conversation, but maybe just temper your expectations, talking about compounding returns or something like that, it's going to go right over their heads.

[Matt]

Well, and this is coming. I think this is a mistake that, I mean, I'll let you speak for yourself, but I know that I made for sure early on because I think our oldest daughters, I think they were around five, six or seven years old maybe, where I was trying to teach her about investing and compounding returns. And initially Kezel's like, all right, it needs to be a big enough return that she sees some progress. So what I'm going to do is call it a match because that's something that she's going to experience out in the real world. Right. Contributing to a 401k. So we're going to call it the Match. But then I realized, well, she's more likely to realize interest and see returns on investments that way. So then I kind of changed the name of it from a Match to interest instead. And I wanted it to be weekly so that she. It was recurring and not something that she only thought about like once a year. And what I realized is that I overcomplicated it.

[Joel]

At least for that age.

[Matt]

At least for that age, Exactly. And especially when we're talking about a five year old, like this is something. These are real conversations that we're having now within an 11 year old about opening a Roth IRA with babysitting earnings, that kind of thing. But I think the desire for us to teach our kids about investing, how that can potentially overshadow some of the more basic lessons, which I think are the biggest things that we need to enforce. Like I teaching our kids the value of a dollar. Oh, that. I think that should 100% come before them understanding how it is that they should be investing their dollars.

[Joel]

Yeah, yeah, I agree with you. I think it's also important to note that teaching smart money management is a long play. They're going to imitate you more than they're going to follow what you say. And I realize that in basically everything when it comes to parenting is they're going to do as I do, not do as I say. And so when it comes to how you handle your money, they are watching, even at the age of five.

[Matt]

So how you talk about your money, how you are talking about different expenses, different things that you're spending your money on. Yeah, all of those things. Man, kids are such sponges.

[Joel]

Yep. So I think tooth fairy money. Great. And can you use it to teach lessons? Yes. At the age of five, we're talking about like 10 words of teaching that you can accompany with it because their attention span and their capacity just is. Is pretty small. So, yeah. As they get older, you're gonna be able to kind of pour in and teach more and more.

[Matt]

Totally, man. Okay, it's beer time. Let's get back to the beer review. The beer that you and I enjoyed during this episode, and I will say the craft beer, we're not just drinking like macro pilsners here on the show, that kind of thing.

[Joel]

Definitely.

[Matt]

These are the beers that you and I enjoy are like works of art.

[Joel]

These are the Michelin of beers.

[Matt]

The Michelin star beard. This is the rum barrel aged stout fermented with bretonomiasis. What do you think about this one, buddy?

[Joel]

So the first thing that hits you is the rum sweetness. I mean, I think this beer was aged for 18 plus months in rum barrels. And you, you taste that, that heavy rum sweetness.

[Matt]

Yeah. Before we even dove into it, like the smell of it, like it's a combination. It almost made me think of bananas. Like, you know, like you get a ripe banana and it's got like this over, like kind of over the top sort of sweetness that is associated with that. That's totally where my mind went. Which then made me think of what's the banana dessert? Like a flame Bananas Foster. Yeah, like where it's on fire and that whole thing, it almost had a richness that you would expect from a really fancy dessert like that.

[Joel]

Dark and rich is what I was thinking. Yes, for sure. And they used bretonomiasis in the making of this beer, which is a type of yeast that often adds kind of a funky element. I didn't get as much of that. Yeah, I'm not smart enough to understand, but it can often yield like funky flavors in the final result. This had, I think, maybe a little bit on the front end, but it dissipated quickly. So I've had some of their beers and like, that would have made it even more interesting, I think, if the. If the Breton of myces had been played a larger role, but it would have been a little more unique at least.

[Matt]

It's super fascinating because typically, like, if. When you characterize a beer as bready, it's like in my mind it tends to be drier. Like a lot of times they're associated with farmhouses or saisons, but they're not typically beers that are higher in the sweetness index. But yeah, I had a hard time getting past the rum because, like, it tastes like they're just like rum soaked raisins in here that were liquefied that we're now drinking.

[Joel]

Oh, yeah.

[Matt]

Which I don't know, maybe that was.

[Joel]

The case, but almost like. Yeah, what are the, what's the candy? The raisins are covered in chocolate Raisinets or something. Yeah, it's like that, but Asian rum barrels just soaked in here.

[Matt]

Soaked in rum.

[Joel]

Yep.

[Matt]

Really unique, super delicious. And maybe a fantastic beer to enjoy. I don't know, maybe when it's like 15 degrees outside, which it may or may not be at this exact moment.

[Joel]

Right. All right, Matt, that's going to do it for this episode. We will link to some of the resources we mentioned in the answers to your questions up on our [e-mail] you know it.

[Matt]

So until next time, buddy.

[Joel]

Best friends out.

[Matt]

Best friends out.

[Joel]

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