Ask HTM – Deploying Cash to Recast or Invest, Free $ in Trump Accounts, & David Ramsey Falling Short #1114

Summary

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How to Money – Episode #1114 (March 16, 2026)

Ask HTM: Deploying Cash to Recast or Invest, Free $ in Trump Accounts, & David Ramsey Falling Short

Hosts: Joel & Matt
Podcast: How to Money (iHeartPodcasts)

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Episode Overview

In this episode, Joel and Matt tackle a range of listener questions around deploying large sums of cash, recent “Trump accounts” for kids, and pitfalls of traditional financial advice. The hosts offer practical, jargon-free advice on mortgage recasting vs. investing, compare different kids’ savings accounts, and explain how to start building credit for the first time. They also share their thoughts on buying used cars from individuals and caution against dubious debt relief companies. The tone is friendly, slightly irreverent, and deeply empathetic, with real-world stories and a focus on flexibility and long-term financial wellness.

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Key Discussion Points & Insights

1. Mortgage Recasting vs. Investing a Large Lump Sum (Listener: Dan from New Jersey)

[09:06 - 20:16]

• Listener Dan's Dilemma: His wife has come into $130,000 and they're torn between recasting their mortgage (6.5% interest, $850/mo reduction) or investing for probable higher returns long-term.
• Mortgage Recast Explained:
  • A recast means making a lump-sum principal payment; the lender recalculates your payment based on the new balance but doesn't change your rate or term.
  • "You typically pay a small fee, which is a whole lot less than refinancing." – Joel [11:10]
  • Frees up monthly cash flow without extending loan term.
• Pros and Cons:
  • Recasting brings guaranteed 6.5% 'return' and significant breathing room monthly.
  • Opportunity cost: Historically, the market may outperform, but the future is uncertain.
  • Flexibility is a key psychological and financial win.
  • The hosts suggest balancing both: recast enough to reduce the payment substantially but retain some cash on hand for “unknown medium-term goals.”
  • "The flexibility that this affords you is meaningful." – Matt [16:09]
  • Use a small portion (e.g., 10%) to make memories, especially if the money is an inheritance.

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2. Trump Accounts and Where They Fit in the Kids’ Savings Hierarchy (Listener: Xavier from Hawaii)

[23:54 - 35:35]

• What are “Trump Accounts”?
  • New financial accounts for minors, offering a $1,000 federal seed for children born 2025–2028, plus a Michael Dell-funded $250 for kids 10 and under who’d otherwise be left out.
  • Accessible only to US citizens with a Social Security number.
  • "Grab that free money for your child if you are eligible." – Matt [26:44]
• Compounding Interest Magic:
  • The hosts riff on the mind-blowing power of long-term compounding, using the account’s hypothetical value projections.
  • "Compounding returns are truly a wonder." – Joel [28:24]
• Where Do Trump Accounts Fit?
  • “Not one of the best accounts in the universe.” – Joel [31:59]
  • Use it for free money, but prioritize 529 plans or custodial Roth IRAs for bigger, better tax/flexibility wins.
  • Hawaii’s 529 plan is derided as “trashy” due to high fees; hosts recommend Ohio or Utah plans instead.
  • "Get your own finances in order, and then eventually you can start for your kids on their behalf... the Trump accounts are awesome in terms of free money and hopefully prodding people into thinking more about investing for the future, but not so great in terms of utilizing that account to do more than beyond what you're able to do for free." – Joel [35:14]

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3. Building Credit with a Thin File after Years of Following Dave Ramsey (Listener: Grace from Washington)

[35:43 - 48:42]

• Situation: Grace (28), credit responsible, no debt, maxes out retirement, but gets declined for a travel reward credit card because she has a “thin” credit file.
• Hosts’ Take on Credit Culture:
  • Joel: "This might be the biggest juxtaposition or the place where we diverge the most from old David Ramsey... It's possible, but my goodness, you're fighting an uphill battle." [41:01]
  • No shame in wanting to play the “credit game” responsibly; it’s modern practicality.
• What is a Thin File?
  • Too few accounts for bureaus to assess; not bad, just “unpredictable” in their eyes.
• Action Steps:
  • Authorized User: See if parents can add you to an old, healthy card for a retroactive boost.
  • Secured Card: Discover It Secured is favorite (has modest rewards, can “graduate”). Capital One Platinum is another solid option.
    • "Discover has always set themselves up as a very beginner-friendly credit card company." – Matt [45:09]
  • Self ‘Credit Builder’ Loan: Optional way to quickly diversify credit type/history.
• How Fast Can You “Graduate”?
  • 6–12 months typically enough to pivot to a solid rewards card.
• Bonus Advice: Watch for foreign transaction fees if planning to travel abroad—Capital One often waives them.

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4. Finding Used Cars from Real Individuals (Listener: Ezra)

[51:56 - 58:32]

• Trend: It's harder than ever to buy from private sellers (i.e., non-dealers) in 2026; Carvana and Carmax have soaked up much of the market.
• Preferred Platforms:
  • Facebook Marketplace: Most volume, but mixed quality—“you have to wade through more junk.”
  • Autotrader: Has a “private sellers only” filter that’s higher quality but only ~1% of listings; better for those seeking careful private-party deals.
    • "On AutoTrader...I think the pickings are slim, but the caliber [is] much higher." – Joel [57:02]
• Buyers' Checklist:
  • Whatever the platform, always get a trusted mechanic inspection before finalizing a deal.
  • Even when buying from major web sellers, use any “return period” wisely (Matt tells the story of Carvana paying for a needed repair after inspection).

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5. Beware For-Profit Debt Relief Companies (Listener: Maria)

[58:32 - 60:50]

• Red Flag: Lawsuits and customer horror stories—hosts suggest fleeing fast.
• Advice:
  • Not-for-profit agencies (Money Management International, National Foundation for Credit Counseling) are a safer, lower-cost bet.
  • Never pay up-front fees for debt relief services.
  • If you’ve just started with a for-profit, you can likely cancel before services are performed.
• "The vast majority of these [for profit] organizations are not straight up scams. But seriously, under deliver, let's just say that." – Matt [59:41]

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Notable Quotes & Moments

• “Flexibility, I think, is such a money win, but it's such a psychology win as well.” – Joel [15:11]
• “Compounding returns are truly a wonder.” – Joel [28:24]
• “It's not all that difficult to play the game, play the system without overdoing it and harming your personal finances.” – Joel [41:12]
• “You don't think it should be that much...it speaks to our inability to fully grasp compounding and what it can do if you are harnessing this eighth wonder of the world” – Matt [29:57]
• [On Trump Accounts] “This could prod people into understanding and looking into the reality of compounding returns a little bit more just because there's actual money that's been put into their hands.” – Joel [31:26]
• “David Ramsey...Did she do that intentionally?” – Matt [37:50] (Both hosts affectionately jab at Dave Ramsey’s style and impact.)
• [On avoiding for-profit debt relief:] “I would highly recommend to run away.” – Matt [58:59]

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Timestamps for Major Segments

• [09:06] Mortgage recast vs. investing – Dan’s question
• [23:54] Trump accounts/kids’ savings order – Xavier’s question
• [35:43] Building credit with a thin file/Dave Ramsey critique – Grace’s question
• [51:56] Buying used cars from private sellers – Ezra’s question
• [58:32] Debt relief company warning – Maria’s concern

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Additional Tips & Resources

• Teen/Youth Banking: Fidelity Youth and Capital One teen accounts are top picks for fee-free, robust, digital-friendly options.
• 529 Plans: For listeners in Hawaii, choose a plan from a state like Ohio or Utah for lower fees.
• Credit Building: Don’t apply for too many cards at once; use secured cards or become an authorized user to speed the process.
• Car Buying: Use paid platforms to weed out scammers; always get a pre-purchase inspection.
• Debt Help: Use nonprofit agencies, avoid up-front fees, and know your rights to cancel early.

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Host’s Sign-off [62:23]:
“Until next time, best friends out.”

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This summary captures all key advice and conversational highlights, using the hosts’ informative and relaxed tone to ensure you get all the useful information and memorable banter—no episode listening required!

Transcript

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[Matt]

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[Joel]

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[Matt]

for indeed sponsored jobs struggling to see up close make it visible with viz. VIZ is a once daily prescription eye drop to treat blurry near vision for up to 10 hours. The most common side effects that may be experienced while using VIZ include eye irritation, temporary dim or dark vision, headaches, and eye redness. Talk to an eye doctor to learn if VIZ is right for you. Learn [e-mail] travel is such a life

[Joel]

changing pursuit and my trip to Australia was one of the best investments I've ever made. I got to enjoy the bustling metropolis of Melbourne and some of the best coffee of my life while also driving the great ocean road and taking in spectacular views. I even hopped on a plane to the island of Tasmania. That was my favorite stop. I loved it all. A trip to Australia doesn't just offer a getaway, it's an investment in experiences that stay with you and explore more destinations in Australia and start planning your memorable [e-mail] welcome to how to Money. I'm Joel.

[Matt]

And I am Matt.

[Joel]

Today we're here to answer your listener questions.

[Matt]

Something about that R.E.M. reminded me of like Schoolhouse Rock for some. Like a bill, I guess. The Capitol Hill, that whole thing. Happy? What is it? Middle of March to everybody.

[Joel]

Can you talk like the bill? The whole episode today I'm just a bill.

[Matt]

Yeah, that's how he. That's how he did it. I remember watching that in third grade or whatever it was that I watched that.

[Joel]

That was like wholesome stuff, man. Like, but it's sad. I don't know that's applicable anymore. Now it's like, oh my gosh, I'm just an executive order.

[Matt]

Bills don't really happen like they used

[Joel]

to back in the day. There's this defunct legislative body called Congress

[Matt]

Way that we used to actually enact legislation. Laws that stuck around as opposed to changing every four years as the executive changes. But we've got listener questions to get to, man. We're going to hear from a couple who has a load of cash to invest or to recast Their mortgage, which isn't something that we've talked about recently. So I'm excited about that.

[Joel]

Most people don't even know what a recast is. A recast.

[Matt]

It's been a minute. We're going to talk all about Trump accounts, whether they're worth it, where they stack up in the personal finance paradigm, what we are planning to do in regards to the Trump accounts. And we're also gonna hear from a listener who got some bad advice from

[Joel]

Dave Ramsey, I believe she called him.

[Matt]

That's right.

[Joel]

David Ramsey.

[Matt]

We're gonna go there. So we'll get to all that.

[Joel]

More little battle of htm Verse doctor. But we'll get to that in a second.

[Matt]

But first, you know who's gonna come out on top? The poor. Not poor boys. Not Ramsey Solutions. Come on. There's some good folks over there. Yes, they do.

[Joel]

Yeah. There's particular is.

[Matt]

He's my favorite. He's great.

[Joel]

He's great. But we had Jade on not too long ago. Jade Warshaw. And she. I liked her a lot, too.

[Matt]

You liked her, too?

[Joel]

Yeah. She rocks.

[Matt]

Hey, I want to spend a quick minute and talk about this new account that I opened up, buddy.

[Joel]

Okay.

[Matt]

This is an account that's been around for actually not all that long. It's a relatively newer Fidelity account. It's called the Youth Fidelity account. Or is it. Maybe it's Fidelity Youth Account.

[Joel]

I forget.

[Matt]

Anyway, my daughter, she was like, hey, I want to be able to have a debit card. She's getting older, kind of going out with friends. Wants to be able to not constantly have to count her cash that she has on hand as well, because she has acquired some jobs and she's making more and more money. And so we found this thing going to the clubs. Yeah, she's not quite doing that yet, thank goodness. But I will say she. Oh, I was bummed because we created this account, and then I immediately saw that, oh, we're planning to phase this out. That is not the case. It's the app. So there is a Fidelity Youth app that they launched a few years ago. They're getting rid of that app literally this month here in March.

[Joel]

Okay.

[Matt]

But the actual account is still gonna stick around. And I will say, man, so far, so good. I'm sure there's other listeners out there who have probably tested the waters and have plenty to say as well. But technically speaking, it is a brokerage account. So it was, I think, created as sort of like a counter to Robinhood kind of gobbling up all of this market Share, essentially. But we are treating it like a spending account, like a checking account because the, the amount that's in there automatically sweeps into a money market account. It's all automatic. And so she's earning a solid three something percent on, on the cash that she's got in there. It does have a routing number and ach, whatever, all that. So what you can do then is that means you can also link it to Venmo, you can link it to Cash app. So in that way it can perform just like a, like a typical spending or typical checking account.

[Joel]

She's entered the freewheeling real world of digital money.

[Matt]

Yeah. Which I have been hesitant to get there because we early on launched into it a little too hard from the digital standpoint. And I realized, you know what, let's just dumb this all down. Focus on cash. Really. Let's focus on, hey, if you work, you get money. If you don't work, you're going to be broke. Especially when they're essentially understanding the value of a dollar.

[Joel]

Especially when they're single digit ages. You know, like once they hit double digits, I think they're typ ready from my experience to enter into the digital realm a little bit more. Especially now when like preteens and you know, almost teenagers.

[Matt]

Hey, man.

[Joel]

Then they're for real ready for that. Exactly. Yeah.

[Matt]

So it's a teen account and I know y' all have used. So one of the reasons you've got like the capital one account. Right.

[Joel]

For your oldest. That's right.

[Matt]

And you've been, sounds like you've been happy with that.

[Joel]

For the top two. Oldest two. Yeah.

[Matt]

Nice. This also has a free debit card and so we just, we just ordered that. And so the ability for me to pay her directly for jobs or babysitting gigs around the house and for that money to show up instantly as well because you can, you set up your own cash management account over there. And then it, if she pays for something, she just literally sends it over or I, I draw it, I guess out of her account in that way.

[Joel]

Can she.

[Matt]

And then when I pay her, I initiate that and it shows up like pretty much instantly as opposed to it taking like multiple days. Feels like a kind of a bummer, you know, because you're not. I want to cement those lessons like I'll, you know, I want the closest thing, the closest physical cash equivalent of it showing up right away to sort of connect those lessons.

[Joel]

Same is true with the capital One. Just because I have a capital one account sending money to then the Capital One accounts that the girls have. It happens instantaneous. Instantaneously, which is nice. And so I guess it seems like there are very few options in regards to teen and preteen accounts out there that are fee free, that are easy to use, and that are robust enough. But my goodness, seems like Capital One and Fidelity are like two of the top choices in that.

[Matt]

It's solid. Yeah, I was hoping. Actually, I wasn't surprised to see that Vanguard didn't have much to offer because old school, they're not. Yeah, their offerings aren't very deep as far as what, you know, when it comes to the kids. And a lot of their products don't have a whole lot of bells and whistles. But so far I've been very happy with the, with, with the Fidelity Youth account. So I'll keep folks posted on that as we continue to use it.

[Joel]

For sure. Sounds good. All right, let's mention the beer we're having on this episode. It's called Wavelength. It's an IPA by Equilibrium Brewing.

[Matt]

It's been a minute since we've had New England Hazy, I think.

[Joel]

Yeah. And it's been a minute since we've had a beer by Equilibrium. And that's.

[Matt]

I think they're out in New York, right?

[Joel]

That sounds right. I just distinctly remember the first time having sticker shock at a four pack of beer. It was an Equilibrium beer. It was like $32 for a four pack or something. And I was like, are you thinking

[Matt]

of Equilibrium or you think about Mortalis?

[Joel]

Oh, maybe it was Mortalis.

[Matt]

Mortalis is the one where you get four pack and it was like 30 something dollars. And you're like, what the hell?

[Joel]

And then I tried it and I was like, it's not worth that much.

[Matt]

That's when they're overcharging. That's when the craft beer equivalent, you're just like, yeah, I don't know if I'm willing to spend that much on a craft beer.

[Joel]

It does have its limits, I guess. And by the way, if you have a money question, please do send your voice memo our way. We love to hear it. The more interesting and unique, the better.

[Matt]

Just record more likely it is to make it on the show.

[Joel]

That's right. We got some really good ones today. Like, really interesting questions I'm stoked to tackle.

[Matt]

How to money listeners are coming through.

[Joel]

Yes. If you've got one of Those, go to howtomoney.com ask or literally just record your question on the voice memo app of your phone. Send it to us. Howtomoneypodmail.com all right, Matt, let's talk about. Let's get to a question about mortgage recasting. It's an interesting term a lot of people probably are not familiar with.

[Dan (Listener)]

Hey, Matt and Joel. My name is Dan from New Jersey, and my wife came into $130,000, and we're wondering if we should invest or recast our mortgage. The mortgage is at a 6.5% rate, and the recast would knock the payment down $850 per month. If we recast and pay the same for the total mortgage, we could pay it down our house in 10 years. But if we need more money, our mortgage payment is still $850 cheaper, which is great. If we invest, assuming the market would beat 6.5% in 10 to 20 years, we'd have more money at the end of that term. Emotionally, we'd love to have no mortgage payment, but financially, we'd love to have more money. Our goals are to retire early and pay down the house, but we're not sure which one of those goals to allocate this money to. Thanks for your advice.

[Matt]

All right, Dan, thank you for reaching out. And the fact that you guys have six digits on hand like that, you came in to do 130,000. That's what he said. That's awesome.

[Joel]

I'm curious. That's great. I would like to know how you come into 130,000.

[Matt]

But I feel like it typically means, I mean, something that big. It typically means like an inheritance, I

[Joel]

think either that or a massive drug deal gone. Right. You know, Breaking Bad style or.

[Matt]

Yeah, this isn't money that you find on find missing money.com or whatever. Like, there's a difference between. That's like Hundreds usually like $67 that are sitting over there as opposed to, yeah, $130,000. But I love that you are looking to optimize this chunk of money. And first of all, I think it's going to be important for us to cover what a mortgage recast is because this is not super common, although maybe it should be, especially as there's more and more folks out there who have higher mortgage interest rates. But a mortgage recast is when you make a large lump sum payment, your mortgage principal, and then the lender recalculates your monthly payment based on this new lower balance that you have. And this is the key part, without changing your interest rate or the loan term. So essentially you've all. Everything stays the same except for the actual payment. They re essentially amortize it and Take into account how much you've put down in order to eliminate the principal balance that you have.

[Joel]

Right. And you typically pay pretty small fee, which it costs a whole lot less than refinancing. You know, when you talk about refinancing, you're talking about creating a whole new loan. It's a strenuous process and it can be incredibly expensive to refinance. And then for a lot of people, Matt, when they refinance there to lower their rate, they're getting, they're lengthening how long it's going to take them ultimately to pay off their mortgage as well. Right. If you had a 30 year mortgage

[Matt]

to move to a 15, unless you

[Joel]

do that, which a lot of folks, I love for people to consider. A lot of people, a lot of people don't. But so then you're talking about kind of similar to what we talk with cars. You're talking about being in debt for that home for a long period of time, paying more in overall interest. Yeah, maybe you're getting a better interest rate, but still. Yes, exactly.

[Matt]

That's what you're signing up for.

[Joel]

That's right. Maybe when you're 88, you finally own your home free and clear. The nice thing about this process though is depending on how much free cash you have, you can chop off a good bit of your monthly payment. You're going to reduce the overall amount of interest you pay, of course, but it's also just going to reduce how much money you have to put towards your mortgage every single month, which frees up cash flow to use in other ways, of course, like saving or investing. It's. It's different than just lowering the balance by paying a lump sum, which is what most people do. If you're paying extra towards your mortgage, whether it's in a lump sum or on a recurring basis, and you're putting it towards principal, that's ultimately what you're trying to do is to pay off that mortgage more quickly, but your payment stays the same. If you do that, you're just going to find that no payments are required sooner rather than later. Whether a recast makes sense depends on a whole slew of things, including your interest rate. But I think that's what makes a recast so interesting, Matt. It's unique and it's something that not many people know exist or talk about. But for a lot of people, being able to dramatically reduce their mortgage payments by putting a lump sum towards that mortgage in one fell swoop. That sounds pretty nice.

[Matt]

Yeah, it does. I think I recall There being more lenders who are offering one free recast as a part of the loan product over the past like three or four years. There's more talk about it at that point. And so if this sounds interesting to you, I think it's worth reaching out to your lender and seeing if that's something that might be an option for you. But Joel, specifically, you brought up Dan's interest rate and they've got a six and a half percent rate. So that's kind of. Man, that's tough because any more than that, easy, any less than that, it's a bit easier to answer the question. It is, man. Yeah. Is it more financially advantageous to invest the dollars that you have or to work on paying that thing off? Who knows for sure? Because obviously investing it would have paid off more handsomely over the past decade, but I think it's less likely that it will over the next decade. Still, that's impossible to accurately predict. All you can do is just look at historic returns, maybe look at some current valuations, try to make an educated decision. But with that in mind, I think it does bode well for the recast. And obviously on top of that, not to mention like you are getting a known return on your money, six and a half percent that you are no longer paying and you're freeing up cash flow on an ongoing basis. Then you use that extra cash to put more into the market regularly on an ongoing monthly basis. I think it would be helpful if you thought about it like this, where recasting, it doesn't necessarily mean less investing. It does mean lower stakes. It means smoother investing, where you are investing more on a regular basis, month to month, like that $850 that you freed up.

[Joel]

It's more of the dollar cost average approach to investing. Exactly one fell swoop, getting rid of some debt, that's not so great. It's not. It's not credit card debt. Right. But it's still 6 and a half percent interest rate on a mortgage, which is. It's not ideal. And so, yeah, I think that there's just multiple checkboxes that make the recast seem attractive to me. If I were Dan, if I'm sitting in his shoes, six and a half

[Matt]

percent is not ideal. It's big enough to be annoying and get under my skin where I dan

[Joel]

100% and freeing up 850 bucks a month, that's not nothing, right? That sounds extra compelling to Dan. It's great, understandably. So, like 850 bucks a month, there's a lot you can do with that. Flexibility, I think, is such a money win, but it's such a psychology win as well. It's likely that given your goals, Dan, you're going to be able to invest all of this additional free cash flow. You're likely already investing quite a bit more on top of that, it sounds like. But let's say a difficult life circumstance were to arise, like a job loss or some sort of health issue to come up in your life or the life of someone that you love, you'd be able to dial back with a whole lot less stress. Being like, I got this, like, tiny little mortgage over here on the side. And so if it means I, you know, maybe I'm not investing the whole kit and caboodle, I'm actually just working a little bit less because I need more free time right now. You can do that too. Like, the flexibility that this affords you is meaningful.

[Matt]

I like that. And yeah, you're not living on the brink. You're not like, living. You're not just right there perched on the edge of the financial abyss.

[Joel]

And not that he is now, but, man, you reduce that mortgage payment by 850 bucks, too. It's like miles away, tons of breathing room. So much margin. Yes. Yes. So much margin, which is such a. I don't know for us, Matt, that's something we value highly. And Dan also said that owning his home outright is a priority. You're not reducing the mortgage payoff timeline when you do a recast, but you're getting far closer to that goal, being able to pay off that mortgage more quickly, because any additional lump sum or additional payments you want to make towards that mortgage allows you to hit that goal even sooner.

[Matt]

Yeah. Yeah. That is one thing that I think I would push Dan on a little bit. Right. Like that being one of his. One of his goals. And I totally get that. But I do think, like, when I think back, like, I think about, like, the last 20 years of my professional sort of career, and I had so many different goals that shifted over the years. Like, I almost want to say over the months, but that sounds a little too. Not accurate. It sounds a little knee jerk.

[Joel]

Sounds a little wishy washy.

[Dan (Listener)]

Yeah.

[Matt]

Because there were times when I thought when Kate and I said, oh, man, this is what we want to do. This is all we care about. We're going to work towards this. And, you know, we would work towards that for a couple years. And then we're like, oh, shoot, we didn't think about this. And so I think, I do think it's worth thinking through what other goals, like what other medium term goals that Dan might have because he's saying, like, I remember thinking, oh, I want to pay off my house as soon as possible. But you lock up all your money. If you do dump it into the home like that, and then, oh, it's a little bit tougher to pull that money out. If you do take that money out, you're having to, you're certainly having to pay for it as opposed to, oh, maybe we want to renovate this home. Is that a possibility? Oh, maybe we want to have kids. There's a chance that that's going to cost us a little bit more money. Oh, maybe that means we actually have less income coming in every month because one of us ends up staying home. Maybe we want to start a business that's something that can, that tends to be capital heavy. And so I think identifying some of these potential other medium term goals could lead you to maybe doing both and not doing both from the standpoint of, okay, you're dumping all the money in, you're recasting. All of a sudden you got the freed up cash flow to be able to invest on a monthly basis, but possibly to where you're not fully using all that money to dump into the home to recast. So this is, I think, where you can kind of split the difference and find a way to recast, reduce your monthly payment, but still retain, I don't know, like 30, $40,000 on hand, where you're setting yourself up for a potential future medium term goal that you don't even know that you have yet. That's. I think Dan would put you in such a beautiful position and give you guys not only options from a, oh, we've got time to be able to make decisions off in the future. But like completely you are controlling your own destiny. You are at the, you're at the helm of the ship, man. Yeah, that makes me really excited for you guys.

[Joel]

Little best of both worlds, right? Where you're like, I'm going to take 80 to 100 of this and I'm going to recast the mortgage with that. That's going to reduce my payment not quite as much, but still by a significant amount. Then I've got this other lump sum of cash that I have a little more flexibility, liquidity, I have more optionality over what I want to do in the near and medium term. I think you're probably not suggesting that he blows all 30 grand of that on some dope European vacation or something like that. But it's like, hey, I don't know if this is inheritance. Something that you and I talk about, Matt, is maybe you do take a percentage of that 10% lots of times to honor that person's legacy, to use it in a way that creates memories that for yourself and like go to the place where your favorite vacation spot that you took with them and there's like, there's something you can to be said for using money in just a purely joyful way, right. That you stumble upon that you weren't necessarily like counting on. Right. But then with the majority, with the rest of it to just really further your financial goals. So Dan, take that into consideration as well. If this is money like you said, that you stumbled stumbled upon or came into, like use a little bit of it for fun, use a lot of it to recast this mortgage and then maybe keep some liquid on hand to kind of facilitate some of those other short term goals that you got. That's right.

[Matt]

But Joel, we got more to get to. We're going to hear from a listener who evidently has a thin credit file. Hear from her and others right after this.

[Joel]

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[Matt]

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[Joel]

you need the right person to cut through the chaos. This is a job for Indeed sponsored Jobs and listeners of this show will get a $75 sponsored job credit to help get your job the premium status it deserves@ Indeed.com podcast just go to Indeed.com podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com podcast terms and conditions apply. Need to hire. This is a job for Indeed Sponsored Jobs.

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[Joel]

all right, more money questions on tap.

[Matt]

Matt, let's get to mo money Mo questions. That's what Biggie sang about. Yeah, wasn't it? That's what I heard.

[Joel]

I don't know. I never really. And I really listened to. I had a middle school friend who would listen to but just. It was not into. It was not my jam.

[Matt]

Wasn't your jam?

[Joel]

No.

[Matt]

As opposed to the actual Space Jam soundtrack, which I'm sure was your jam.

[Joel]

Dude, I did have like the Shaquille o' Neal rap album back in.

[Matt]

You're like, I don't really like Biggie, but I do like Seal.

[Joel]

I think it just shows what a loser I was in. Really?

[Matt]

He was on that album.

[Joel]

That's what you're highlighting?

[Matt]

No, no.

[Joel]

Thank you for doing that. Oh, please.

[Matt]

You don't even want to get into my musical taste in middle school, all right? I don't think I had musical taste. I don't think I listened to music in middle.

[Joel]

Okay. I was. I did like Hooting the Blowfish and middle schools. That was seventh grade for me, man. Really?

[Dan (Listener)]

Oh, yeah.

[Matt]

Oh, man, you were ahead of your, ahead of your time.

[Joel]

Still like Hootie and Oasis. Come at me.

[Matt]

You.

[Podcast Announcer]

Okay.

[Matt]

You had an older sister, right?

[Joel]

Yes.

[Matt]

Was she listening to some of that?

[Joel]

I don't think so.

[Matt]

No.

[Joel]

I wish I was purely okay what

[Matt]

I was into because I could see a situation like that where the firstborn, they're kind of like, well, I don't know. And then they get. They start to listen to some stuff and then the kid, you know, the younger siblings are like, oh, yeah, I love that too. So, yeah, I didn't have an older sibling. So I was just kind of like twiddling my thumbs.

[Joel]

Flying by the seat of your pants. Figuring out for yourself. All right, let's get to this question about Trump accounts and where they stack up in the saving for your kids order of operations.

[Xavier (Listener)]

Hi, Joel and Matt. This is Xavier from Hawaii. Would like to know your thoughts on the new 530 Alpha accounts for the Trump accounts. My wife and I are expecting our third child in the summer and would like to take the $1,000 benefit for him and was curious to know where these new types of accounts fit in the Money Gear solution. A little bit about my spouse and I. I have a stable job and my spouse is currently a stay at home mother because I frequently travel for work. Once travel is over and the kids are a little bit older, she will return for work as a registered nurse. Our current assets are a taxable brokerage account that has $257,000 in it. We fully fund a Roth TSP that has $495,000 and I fully fund a Roth IRA that has $95,000 in it. The only financial liability that I have, or my only debt is a mortgage on a rental that is in a Sunbelt state that pays for itself and then some. And it's really because it has a 3% mortgage rate. Anyways, thanks for all you do. Looking forward to your answer on these new financial accounts. Thank you.

[Matt]

Xavier is crushing it, man. I love how much money he's got set aside in all the different accounts, not only in retirement but also in taxable brokerage as well.

[Joel]

You know what he mentioned too giving

[Matt]

him lots of options.

[Joel]

The retirement accounts that he has, they're Roth and so never going to have

[Matt]

to worry about that again.

[Joel]

Think about the grim reaper of the tax man that a lot of people are going to have to face down the road.

[Matt]

Amazing.

[Joel]

Not, not, not Xavier. Yeah.

[Matt]

I don't know how he's actually been able to do all this. Did he say this is. He's about to. They're about to have their third child.

[Joel]

Yeah.

[Matt]

Like how is he doing it all at once? I don't know. Mad props.

[Joel]

It's impressive.

[Matt]

You got to go out there and pay a visit. I should actually go out there and pay a visit to him because I've never been out to Hawaii.

[Joel]

What?

[Matt]

And I can explain.

[Joel]

Yeah.

[Matt]

You know that you've been to Hawaii multiple times. We were just talking about it yesterday with lunch with, with Tim.

[Joel]

Yeah.

[Matt]

He was talking about the Laoa. I don't know, Lula Lao in Kauai.

[Joel]

Like a 22 mile trail that we want to hike at some point.

[Matt]

That sounds amazing. Yeah. Something I need to. Need to do.

[Joel]

Well, if we go in person to answer Xavier's question, then we can turn into a business write off. Right.

[Matt]

And meet up for a beer.

[Joel]

Yeah, exactly.

[Matt]

Anytime we have Beer. It's a business write off because it's

[Joel]

like it's part of the show, guys, right?

[Matt]

Folks are like wait a minute, is that why they started a. Yes, it is. That is exactly why we, we started this thing. Let's talk about Trump accounts which were a part of the one big beautiful bill. Now act like we discussed bill going to Capitol Hill.

[Podcast Announcer]

Joel.

[Matt]

Basically these accounts are available to kids who are 18 and under. But the free $1,000 that we keep hearing about that is only available to kids. So they have to be US Citizens. They have to have a Social Security number who are going to be or who have been born, let's say between 2025 or who are going to be born within the year 2028.

[Joel]

So if you want your kids to

[Matt]

get free money like now's the time,

[Joel]

time to start like procreating. So they get $3,000. It's totally worth it. Expand your family just for this reason.

[Matt]

Hey, if you were already planning on it, it's certainly nice to know that you've got that some like a light breeze at your back. I would call it like, I wouldn't call it like a stiff wind or anything like that. But obviously grab that free money for your child if you are eligible. It's IRS form 4547. Evidently that is what you will need to fill that fill out if you had a child issue.

[Joel]

You know why it's 45 47, right?

[Matt]

Oh my gosh. That's right. We know. We talked about that. Yeah, yeah, I just.

[Joel]

But I forgot the self promotion is never ending.

[Matt]

It. It's strong with that one. But yeah, we talked about that on a Friday flight remembered. But there's an online portal that's evidently going to open this summer to make it a bit easier as well while we'll see if that actually happens because I feel like a lot of times with these government promises there's a whole lot that's talked about, not a lot that's followed through upon the site is up.

[Joel]

And actually when it comes to like Trump Rx like that site's up like so they've been doing a good job.

[Matt]

It's true.

[Joel]

Actually pulling that off.

[Matt]

Yeah. And I will say have you been to Trump? Trump accounts.gov it looks good. It looks really good. I was actually very impressed. It's a good looking site. They've done a good job. I think it's gonna be going through the hypotheticals and showing hey this $1,000 if you never invest, this is how much it's gonna be by the time your child is 18 here, by the time they're 27, by the time they're 55.

[Joel]

Oh, how much was it at 55, do you remember?

[Matt]

Oh, no, I remember because it had. If you never contribute again, it has. If you contribute like a thousand every year. And then it had. If you contribute 5,000 every year. And that one is the one I remember because it was something like 13 million dol.

[Joel]

13 million.

[Matt]

13 million 5000 every year.

[Joel]

Compounding returns are truly a wonder.

[Matt]

Yes. And this is why. Maybe this is why I'm so excited, because that's one of the things.

[Joel]

Although. And when I talk about this, you probably don't want to add additional.

[Matt]

Yeah, yeah. Please don't hear us overselling it. Get the free money for sure. But yeah, I was going to say that was one of the things that really turned me on to personal finance is realizing sort of. I'm like, wait a minute, this can't make sense. Seeing some charts when it came to compounding, diving into it, realizing that. No, in fact, this is how this works. That for me, kicked off the whole interest in investing and compounding specifically.

[Joel]

Yeah. It's enough to make one get a little obsessive, a la Warren Buffet, who's just like, taking that reality of compounding returns to the most ridiculous human extent. Right. Where the vast majority of his returns have come after he reached essentially retirement age. When you see stuff like that and how powerful it can be, it's exciting enough to get you to defray the current usage of some of those dollars so that you have more dollars down the road at your disposal.

[Matt]

It truly is amazing. Like, I don't know if you should just take a second here to talk about compound interest, because it's not something that we totally naturally. Like, we are not programmed as human beings to think in compounding terms. Right, Right. Like, we've talked about this before, but if you take seven. If you do seven plus seven plus seven plus seven plus seven. What is that, Joel? So I said seven five times.

[Joel]

Yeah. That's 35.

[Matt]

Yeah.

[Joel]

Yeah.

[Matt]

That's really easy, isn't it? What's seven times seven? You can do that one. Yeah. But then times seven times seven times seven.

[Joel]

Yeah. I don't know.

[Matt]

I know, right? Like, I can't even. It's something like 16,000.

[Joel]

Okay.

[Matt]

It's over. I'm pretty sure it's over 16,000 because I. I did this one time with one of my kids.

[Joel]

That's still just five sevens. Just done differently.

[Matt]

Just done Differently. And you don't think it should be that much. Like, how is there such a difference between adding five sevens as opposed to multiplying seven, five times? But it just, it speaks to our inability to fully grasp compounding and what it can do if you are harnessing this eighth wonder of the world.

[Joel]

Yeah. And the people who, even if you just naively buy into it. Right. Which I think I did early on. I was like, I guess it sounds good, let me try that. And then you look back later and you're like, holy crap. No, it works. It does.

[Matt]

Literally working for me.

[Joel]

Yeah, yeah. So you mentioned trumpaccounts.gov I'm glad you mentioned that. That's a place to go, especially when the portal opens in June or July. Of course. It's worth mentioning too that there's money for kids aside from being born between 2025 and 2028. Michael Dell, which we talked about on the Friday, Friday flight in public private partnership, he's offering an additional $250 for kids 10 and younger who would have been left out otherwise. Right. Because it's a very narrow span of newborns essentially who qualify for this free money. But Michael Dell was like, nah, let's give more kids the ability to get at least some free money, which I love. Which is cool.

[Matt]

I love that a private individual chose to do this.

[Joel]

Let's give it to the elementary age kids.

[Matt]

Yeah, right.

[Joel]

All of them. So your other kids might not get as much money, but they still stand to get some free money for their future. Neither of these sums are life changing. Right. But like we kind of talked about with compounding returns, they could be, they could become.

[Matt]

It depends on how long you wait.

[Joel]

Yeah. They could become life changing, but they're an interesting step. I think they could breed a lot more financial curiosity for parents and kids alike. Matt, that's. To me what this represents is that. Tell me more about this account and the free money that I'm getting and being. Yeah. This could prod people into understanding and looking into the reality of compounding returns a little bit more just because there's actual money that's been put into their hands that's at stake now.

[Matt]

Yeah. They got skin into the game even though it was free skin.

[Joel]

Right, right. And this is.

[Matt]

That sounds weird.

[Joel]

This is not one of the like best accounts in the universe in our opinion. But I could see this actually probably not for everyone, but for at least some people this provoking their curiosity in a really beautiful way that's going to lead to a Lot of benefits for them for years to come.

[Matt]

Absolutely.

[Joel]

Yeah.

[Matt]

And again, at the very least get the free money and so about. So you mentioned the 250. So it's $250 essentially if you have a 10 year old or younger.

[Joel]

Our poor preteens are left out of the equation.

[Matt]

Yeah, I know they barely missed it, but the rest of our kids will be able to get that. So I'm obviously going to get that. But no as well, you can't double dip. So you are either eligible for one or the other. So don't think that you're like, oh, we're gonna score 1250. No, you're either getting 1000 bucks or you're getting 250 bucks. But go ahead and get that. There are a few, I don't know

[Joel]

what I just said.

[Matt]

A few. There are a few certain qualifications that you have to pass in order to get that. The median income we'll link to where you can look all that up. That being said, I am not planning to contribute a dime more to my, to the, the kids Trump accounts. And that's because there are other accounts out there that offer more control. They offer better lower fees because of the investments. They're structured better from a tax standpoint. They have additional flexibility. So the 529 account, for instance, is a much better place to build money for your child's future. And okay, so on that note, Xavier, since you live in Hawaii, you don't get a state deduction. And because the fees are awful with the 529 accounts where you live there in 529, I would highly recommend going with another state's plan.

[Joel]

It's such a trashy plan, the Hawaii plan. It's really bad.

[Matt]

I looked into the details. I was like, I was shocked.

[Joel]

I wanted to puke. I was like, who's running this 529 plan over there in Hawaii? They need to figure something out or partner with Vanguard or one of the low cost providers that's working magic for people in dozens of other states. Like a lot of the 529 planes, when they first launched, Matt, there were like a couple really good ones and there, there were a bunch of like really subpar ones and a lot of them have gotten much better over the years and reduced fees. But Hawaii doesn't seem to have gotten, gotten on that train.

[Matt]

They're like, nah man, we're Hawaii.

[Joel]

We do, we want, we relaxed, we ain't gonna make no changes. So yeah, Ohio or Utah are two of kind of our always stand really solid favorites, which prioritize low cost for people. And since, again, you don't get the state tax deduction, don't go with your actual state's 529 plan. Go with a better, cheaper one. And so where. He specifically asked Matt, where do the Trump accounts fit into the money gears? They kind of don't, right? It's, it's free money from the government to help your kid get started investing for the future, saving extra for your kids. It comes in money gear number seven. Typically, like, you don't even put money into a 529 plan until you've reached that stage. Some parents feel the pressure, right, to do it sooner to their own detriment. And it's, we talk about the, the oxygen mask in the airplane. Put yours on before you put it on your kids. That's the same thing. Get your own finances in order, and then eventually you can start for your kids on their behalf. The only exception, again, sorry, just because of all the nuance of 5 29s is you want to, like, start the account with a little bit of money because there's, like, timelines that get rolling. So don't forget that. But we just rather see you, Xavier and other listeners crush all your own money goals first before really working on behalf of your children. But like Matt said and like we've talked about here, the Trump accounts are awesome in terms of free money and hopefully prodding people into thinking more about investing for the future, but not so great in terms of utilizing that count to do more than beyond what you're able to do for free.

[Matt]

I totally agree. All right, we got more to get to. Joel. Let's hear from a listener who grew up listening to some bum financial advice. Let's hear her question.

[Podcast Announcer]

Hello, Joel and Matt. My name is Grace. I'm 28 years old and I live in Shoreline, Washington, which is just north of Seattle Properties. I found your podcast a couple months ago and have really been enjoying it. I grew up listening to my parents play David Ramsey's show in the car, so it's fun for me to now have my own version of that as an adult. I'm learning a lot from you both, and I'm taking more of an interest in my own personal finance journey. So thank you for doing what you do. I feel like I'm pretty financially responsible. I don't have any debt. I have an emergency fund. I get my employer, 401k match, and I've fully funded my Roth IRA for the last four or five years. I've stayed away from credit cards for most of my life because I mainly heard about the ways they can mess up your life. But I trust myself to be responsible with a credit card and have decided that I'm willing to play the game a little bit so that I can get mileage rewards and other credit card perks because I'm starting to want to travel. I recently applied for a Southwest Airlines Visa platinum account through Chase, and I was not approved. I was initially pretty surprised and frustrated. The reason that they listed for not approving me was that I have too few accounts on consumer credit. File reported recently. I did some research and it sounds like I have a thin file or not enough credit history to be approved. In hindsight, I'm not completely surprised that I wasn't approved. I've had a credit card before, but have been using debit for basically all of my adult life. I'm curious if you two have some suggestions for cards that would likely approve me so that I can. So that I can start building credit. Maybe there's one that even has a little bit of rewards. I'm worried that my rejection hurt my score, and I don't want to hurt it further by applying for too many other cards. I'm also curious if you have any idea how long I need to use my starter card before I can reapply to a card with better rewards. Thank you so much.

[Matt]

You were right. I think she did say David. David Ramsey.

[Joel]

That's how we should refer to him from here on out. I love that.

[Matt]

Did she do that intentionally?

[Joel]

I don't know, but it's awesome.

[Matt]

I like. I totally love that. It's just a way for us to kind of jab.

[Joel]

Do we know his middle name?

[Matt]

And then jab him a little bit.

[Joel]

Then we can refer to him like he's in trouble. Like, you know, when your mom uses your middle name.

[Matt]

Anytime we invoke David, Whatever Ramsey's name, he knows he feels it.

[Joel]

That's right.

[Matt]

It feels the burning tremor in the father's ears.

[Joel]

Well, Matt, of course, one of the things she talked about at the very beginning, I think. Just want to highlight this for a quick second. The goal of how to Money is to translate timeless concepts for the next generation. It's not like you and I are spitting out brand new stuff that's never been said before. But that's what humans do, right? We translate stuff constantly. We're updating for the way humans speak and think and operate. Now. It's a reason, I guess people still read the King James version of the Bible, but there have been new translations of that. Right. And like, people are like, ah, I like that Eugene Peterson version better now. Or we're always just updating the way we speak and think about things. And to go. Not that Dave Ramsey's so old school that you can't understand what he's saying, but the goal of how to Money is to be that for millennials and Gen Z ers these days.

[Matt]

Yeah. I think that's why he's trying to bring in some younger folks as well, to be able to continue the legacy, but too late. Guys, Joel and Matt are here. We stole the crown, Grace. I mean, like, we're obviously making fun, but, like, I will 100% give full credit to David Ramsey for sparking my interest in addition to compounding returns. Literally. It was at a Dave Ramsey event that I saw the compounding returns chart that caused me to realize it was the chart where it said that someone who invests and max. Maxes out their Roth IRA between ages 17 and 25 versus someone who starts investing at like, age 25 until they retire or something will never be able to catch the person who invested for just seven years and stopped.

[Joel]

And that's enlightening.

[Matt]

Which, that was the. One of the things that. That blew my mind. Maybe that's why I got all excited about the the Trump account.gov site.

[Joel]

Talk trash, lightly ingest. But Dave's done a lot of great work.

[Matt]

He's done a lot of.

[Joel]

David. Excuse me.

[Matt]

Get it right, man. Grace, it sounds like you are doing an awesome job and it makes sense because again, you. You learn a whole lot from David Ramsey as you're growing up. But I do love that you're wanting to enter into the credit card phase of your life. It's the credit cards era for Grace, Joel, because she handles things like the

[Joel]

1989 era from Taylor Swift. Exactly.

[Matt]

That's what I was referring to. You've been really responsible, and so I'm not worried about you being able to handle your credit card properly. Just follow the golden rules of rules of plastic. You're gonna be just fine. Right. That means not carrying a balance. And by the way, this is the very reason that we want people to handle their cards responsibly. Because figuring this out now is going to ensure that you're going to build up a healthy credit score, which you're going to need in your life moving forward. It's just kind of ironic that the thing that got you in this super healthy position to begin with is the same Thing that's keeping you from being able to take advantage of some of the different perks and rewards out there.

[Joel]

And this might be the biggest juxtaposition or the place where we diverge the most from old David Ramsey.

[Matt]

It is the spot.

[Joel]

And they try to talk about and tell people how they can get by in life without a credit score. And you can.

[Matt]

It's just getting harder and harder, though.

[Joel]

It's possible, but my goodness, you're fighting an uphill battle. And I just don't want to be pushing a boulder uphill, which is what you're doing if you're trying to live in modern, you know, American society not caring about your credit score. And Grace is seeing the effects of that firsthand. Right. And the truth is it's not all that difficult to play the game, play the system without over overdoing it and harming your personal finances. Yeah, something like 46% of Americans carry a credit card balance. They're not playing the game properly. But if you listen to how to money and like, you follow our advice, you can have the best of both worlds with like, yeah, a little bit access to credit cards, use them wisely, and then have a solid credit score so that you're not hampered when you're trying to make other moves. Let's talk about the thin file thing in particular, Matt. Like that Grace mentioned. It's just what it sounds like, right? It's the credit bureaus. The old school analogy would be that there's a manila envelope on the desk and it's got two pieces of paper in it. And there's just not much for them to go on because you have almost no documented usage of credit for them to be able to sign a score to you.

[Matt]

So, yeah, they don't look at your resume. Right, Right. They're not looking at all the great things that you did and they're not

[Joel]

looking at your net worth or your, hey, guess what? You maxed out your Roth IRA over the last five years. Obviously you handle money well. Grace, they don't care about that. That's not what they look at. They look at how you use debt products and if you have too few active accounts or an incredibly short credit history, you get put into the thin file status. Doesn't mean you're bad. It just means from the credit bureau perspective, the data is insufficient and that you're an unpredictable borrower because of that, because they have so little information, what's actually a decent thing for you, which is not having tons of credit at your disposal, not Using credit in an unwise way, not many, having many debt products. Right. That you've taken out, it's a bad thing for your credit score. And so it's time to remedy that in a smart way.

[Matt]

Which then impacts other things. Your ability to get a competitive rate. If you're looking to buy a home, utilities, renting a, you know, just it, it comes back in multiple different ways to essentially harm you financially. But one of the ways that you can create a thicker file, let's say your parents who may or may not have a credit card because of the fact that they listen to David Ramsey. But if they do have a credit card and if they do handle it well, they could add you as an authorized user. That's something we've talked about on the show before. I've got four kids, all four of them are authorized users on one of my cards. And so that history is going to go back really far. I'm not trying to completely ensure that they never experience any sort of hardship. But I'm like, here's one thing that I can do that doesn't cost me anything.

[Joel]

Get them started off on the right foot.

[Matt]

Yeah. So that's something that you can do. But the other major way is by going with a secured credit card. Essentially these are like credit builder credit cards is another name. But basically you put down a refundable deposit with this bank and that becomes your credit limit essentially. And so then you use that card just like you normally would. I would use it sparingly in order to avoid using a large percentage of your overall credit limit that's available to you. But you do that in a sort of self funded attempt in order to build your credit score. You can check with the local credit union. A lot of times they're offered there. But Discover, they have a great secured card that actually has this auto graduation built in where they auto graduate you to a full fledged credit card after 7 to 12 months of use of Responsible Use. I actually saw another article that mentioned that even within six months of handling that well, you could apply for the unsecured version of that card. So look into that. Discover has always set themselves up as a very beginner friendly credit card company. And in fact I think they were my first credit card that I had way back in the day.

[Joel]

And I'm pretty sure this card, this Discover card that you mentioned, the Discover IT card comes with rewards too. Grace mentioned that, hey, I'd like to earn something like while I'm using this credit card.

[Matt]

Yeah.

[Joel]

And I think it's One of the only secured cards that comes with rewards.

[Matt]

I want to say it's like one and a half percent. And so you do have to put down money that you then get back once you get to get to graduate. So there are other secured cards that don't have benefits. So maybe that's what you're highlighting here. So Capital One, they've actually got the Capital One Platinum card, which you might be hearing us say and think, sounds fancy. Sorry, guys, I don't think I'm quite yet ready for the Platinum card. No, this is a, this is a beginner's credit card as well. This is for folks who don't have credit scores or who have really rough credit scores. And this is a card that you don't have to put any money down, which is really attractive. And actually. And you were talking about how you're not sure if you would get approved for that one. You can go to the site and enter in information and without doing a hard credit check, they'll let you know. So that'll save you some time and maybe some heartache on the actual credit score front as well. So it's. And there are no rewards associated with that particular card. So there's a couple options out there for you on the, on the beginner credit card front.

[Joel]

Both of those are solid options. The Discover card might be a touch better if you're like looking to earn rewards as well. But. And I think this is a problem that can be solved within 6 to 12 months time. Right. This is not something where you're in purgatory for years to come. Credit score purgatory, because you haven't, you know, built up or taken on any debt in the past. And so, Grace, you should be able to fix this pretty quickly.

[Matt]

Ooh, I just thought of something else. Yeah, Capital One card. Does the Discover Card, they charge foreign transaction fees, right?

[Joel]

Ooh, that's a good question.

[Matt]

I think they do. Capital One doesn't. And so that's another soft benefit. And with her being up there in. She said Shoreline. And of course, Joel, I looked this up because I'm like, well, I need to figure out where Shoreline. Oh, looks like shoreline is on the Puget Sound. Looks like a wonderful place to live.

[Joel]

Oh, my gosh.

[Matt]

Yeah, which it is, by the way. It's suburb north of the city, not unlike where we live. So the cost, Cost of living is a little bit lower, specifically when it comes to housing. But I don't know, maybe she hops across the border, heads up to Vancouver. Have you ever been To Vancouver.

[Joel]

I've never been to Vancouver.

[Matt]

Me neither. I'm gonna go there sometime. But that would save you from having to deal with some of those foreign transaction fees if on your next trip across the border. So that's just something else to think about. Some of the other additional benefits that come with the different cards out there.

[Joel]

Last thing I wanted to mention too was a company called Self. It used to be called Self Lender and basically it's another way of putting down money, creating a debt product where you're paying yourself back and Self collects a small fee every single month. And it's basically just in an effort to help you build a better credit score. Yeah, I think you can just do the secured credit card approach and you'll be just fine. If you want to like double down and you're super keen. Supercharge it. Yeah. Because Self says, oh you can, you can increase your score by dozens of points by 30, 40, 50 points by doing this. That in addition to a secured card, you might be able to create a robust score for yourself even more quickly. But that's just going to cost a little bit of money. It might be worth it though, right? Because the goal is to get more reported behavior. You're doing the stuff the bureau's want to see. You're getting in their good graces. Again, it's a weird game, but we think it's a necessary one. Some say opt out of the game completely, our friend David, but we would say no, we don't think it makes sense to opt out of the game. And just these quick small moves and using these new, this new access to credit wisely, you're going to be just fine Grace.

[Matt]

That's right. I think one of the advantages of Self as well is the fact that it's not a revolving credit line that you're paying down, it's installment. And so that's one of the things that goes into creating a robust credit score is having two types. You got the revolving credit line, but then you've also got the installment loans. And so I, it makes sense why Self can say you're actually going to do much better for you to also join up over here because it's not most of the time when you are thinking about installment loans, it's car loan, it's a mortgage. And so the ability, ability for a beginner, someone who's trying to get their credit score essentially off the ground, it's kind of rare to be able to enter into an installment loan like that. That's where Self steps in.

[Joel]

If you take the how to money approach to buying cars and you're a ways off from buying a home, you could be a long ways off from having any sort of installment loan. That's right. So having that self loan, having some sort of installment loan on your credit history could help improve and boost your score too. All right, we got a couple more questions to get to Matt, including Let's talk about buying cars. Where do you actually find cars from real humans? We'll talk about that and more right after this. Man, we've hired some great folks to work behind the scenes with us at how2money over the years if you're a small business, you know this the right hire can make or break things for you. Hoping the right people see your job posting is not the best growth strategy. So when the pressure's on and you need the right hire, this is a job for Sponsored Jobs.

[Matt]

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[Matt]

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Struggling to see up close? Make it visible with vis. VIS is a once daily prescription eye drop to treat blurry near vision for up to 10 hours. The most common side effects that may be experienced while using VIZ include eye irritation, temporary dim or dark vision, headaches and eye redness. Talk to an eye doctor to learn if VIS is right for you. Learn [e-mail] all right buddy, let's keep this money train rolling. We've got the Facebook question of the week, which is from Ezra. Remember Ezra?

[Joel]

Uh huh.

[Matt]

This is Ezra with an S, but you pronounce it like a Z, not Ezra.

[Joel]

I'm gonna pronounce it however I like you say.

[Matt]

Yeah, you be you, man. Ezra wrote. Where have y' all had the best luck with finding used cars from private sellers? Facebook Marketplace. Joel, have you purchased a car off of Facebook Marketplace before?

[Joel]

So I've looked at cars I found on Facebook Marketplace. I do not think I've ever purchased a car that I found on Facebook Marketplace, though. Yeah, I'm trying to think back. I don't. I don't think so. The last place.

[Matt]

I've only purchased one car in the past 10 years and it wasn't on Facebook. And before then, I don't think Facebook Marketplace existed.

[Joel]

It barely existed.

[Matt]

Yeah, maybe it did, but maybe not. The motors.

[Joel]

Sure. Or at least it wasn't in Craigslist. Was still kind of up there rivaling Facebook Marketplace back then.

[Dan (Listener)]

Yeah.

[Joel]

Last car, not so much anymore.

[Matt]

Was private. Was. We listed ourselves and I listed it on Craigslist. Oh yeah, I remember that.

[Joel]

Yeah, that used to be the place. And now I just don't even think to check Craigslist anymore.

[Matt]

It's crazy.

[Joel]

Gosh, it was groundbreaking when it launched because it upended the direct. The ads in the newspaper, which is. People are like, huh. What are you talking about? That used to be a real process

[Matt]

center for newspapers and it was huge. I had a folder on my computer back in the day that was literally labeled Craigslist. And it was a file that had all the different pictures and listings that I'd created. I don't know why I kept it, but I mean, I'll show it to you after we finish recording. I'm such a nerd.

[Joel]

You should probably delete that now.

[Matt]

I guess so. I don't know. There's something about seeing like our old stuff. Yeah.

[Joel]

Nostalgic.

[Matt]

We've talked about photos, keeping up with pictures recently here on the show. This is one of the ways that I'm weird and I hang on to stuff like that.

[Joel]

There's so many ways that's true. Okay, so in 2026, it is so hard to do this. Matt. I have found this out too. Trying to buy cars from humans. And I don't know why, like, should that be a massive priority for me? For me it is. And so I love that ESRA is. Is trying to do that. He's trying to buy that car from a human. These. The resale sites have Just soaked up so much of the market share, talking about Carvana, Carmax. Yeah. Yep. And it's not bad to turn to those places. In fact, like. Like, they have decent. Like, oh, I guess you want a week or 30 days or something like that to take this car back because you don't like it.

[Matt]

It's pretty great.

[Joel]

Carvana and Carmax provide that. But still, you're. You're paying more money, typically, than you would buying directly from the private seller themselves. And I still feel more comfortable buying from an individual, Matt. I don't know why. I don't know if it's, like, old school or if it's just that person, that part of me that wants to get a good deal and find something that's well taken care of, finding something that's like. Like outside of the norm in a good way, where I'm getting more bang for my.

[Matt]

I think that's what you get when you buy from a private seller. Like, I think if.

[Joel]

If you take the time, like, if you're really intent. Because there's a lot of. A lot of listings on Facebook, Marketplace, that are subpar, too.

[Matt]

Yeah, yeah, There's. There's sketchy. Well, I mean, there's brokers, there's folks who are selling, like, different little companies and are trying to portray themselves as individuals, but there's also individuals who are just selling a car that may not be all that great.

[Joel]

You.

[Matt]

I mean, I can't remember, like, you didn't. Y' all didn't have the best luck with one. One car that you purchased a long time ago. Didn't y' all have, like, y' all had a Subaru for.

[Joel]

That's right.

[Matt]

Was that private sale?

[Joel]

That was a private sale, and that was not our best purchase.

[Matt]

So, like, there's. I mean, there's, like, there's really good deals to be had, but then sometimes there's vehicles that maybe are like, ah, dang it. Like, maybe this one isn't. This wasn't a great one. But I think that's why these, like, the Carvanas out there tend to be. I don't know, I feel like they're serving an audience because you're not gonna get the best deal. But generally speaking, it's like all of the cars pass a certain sort of whatever checklist that they say, you know, they're really clean when you get them, which is. I don't know. That shouldn't be a reason why you buy a car that is really clean, because you can drop 50 bucks and have it Detailed at some local car

[Joel]

wash. And they make it easy, right?

[Matt]

Like, they make it super easy, drop

[Joel]

it off at your doorstep, that kind of stuff.

[Matt]

But I get the desire though, to want to find a vehicle that like, well, your last purchase. And like, didn't the guy have like every service directly from the dealership?

[Joel]

Talking about manila envelopes that are stuffed full of stuff.

[Matt]

Was it a thin file?

[Joel]

No, it was a thick file. Right. And. And he just had records for everything he'd ever done.

[Matt]

So incredibly trustworthy is what you want right there, man.

[Joel]

It wasn't like, oh, you just vacuum this out and put it and took it through the car wash. It was, oh, you've taken care of. You've babied this baby, this car. And so. So the place I found that car was autotrader. And nice. It typically it costs, I forget how much, maybe 60 or $70 to list a car for sale as a private owner on Autotrader. But I have found. And there's a button that you click at the very bottom when you do a search. Like if you're searching for particular maker model specifically to get private sellers only. And there's still ads that pop up in there and stuff as well, so be sure to bounce through those. But you can find people who are only selling the make or the make and model car that you want who are legit private sellers through Autotrader. You as the consumer, you're not paying any money. But I think to me, like, the pickings are slim. It's like something like 1% of the listings on Auto Trader are actually listed by private sellers. But still filter it by that way. That way you're only looking at the listings you want to see. And to me, that's how I've had the most luck in the past few years.

[Matt]

It's like a higher. It's a higher barrier to entry. Right. The fact that they have to pay as opposed to being able to list it for free. So you probably have to wade through more junk on Facebook Marketplace. And there's fewer options maybe on Autotrader, but I'm guessing the caliber of the listing is going to be much, much higher there. Regardless of where it is that you're going to get it though, take it to a mechanic.

[Joel]

Yes.

[Matt]

So whether you're talking private sale or if you're going with one of the big sites, because obviously if you got somebody who maybe didn't who did just do the vacuum thing, snapped a couple pictures, listed it and it's actually in terrible shape, you might Run across those.

[Joel]

But also.

[Matt]

So the vehicle that we still have our Honda Odyssey, I purchased on Carvana back in 2016 and I took it to a Honda Acura specific mechanic, someone who was known across the city for being just excellent. And what they discovered was that this Honda Odyssey needed a new timing belt. And this is within the window of time that I could return it to Carvana. And I said, hey, this is what they say, here's the write up. And Carvana straight up paid to have that timing belt replaced and said that for me, the kind of built in warranty period of time, that was great.

[Joel]

That was time to do your due diligence.

[Matt]

Oh my goodness, that was fantastic. And otherwise the van checked out just, just fine. So regardless, there are diamonds in the rough, but also just rough diamonds, I guess. I don't know whether it's private sale or with tons of dirt, some of the big, some of the big sites. So yeah, either way, make sure to take it to a trusted mechanic.

[Joel]

Yep. All right. This next question comes from Maria. She says, I recently applied for a debt relief program. I was feeling desperate as I found myself in debt. However, after reading more about this program, I learned there is a lawsuit against this company and clients have reported being left in worse financial hardship than before. Yikes. She says, I'm feeling very anxious. I'm not sure I can mention the name of this company. Wanted to hear if anyone has used them or if you have any knowledge about companies like this.

[Matt]

Yeah, Maria, I'm not sure what company that you're using, but I would highly recommend to run away. And I hope you haven't signed a contract where you've entered into any work. Actually, even if you have signed a contract with them, you have the right to cancel if they haven't performed any services that they have outlined that they're gonna, that they're planning to do. So I guess given what you're saying here, it sounds like you're, you might be in the early stages of working with them. Maybe you haven't set up a specific account for them to use or for them to help you out with. So I think now is the time to get out of this relationship. Because the vast majority, regardless of who you are actually with, like all of these for profit, I don't wanna say all of them, but the vast, vast majority of these for profit debt relief organizations are not straight up scams. But seriously, under deliver, let's just say that.

[Joel]

Yeah, yeah, yeah. And even the ones that are decent at what they do, they still just aren't as good as the not for profit debt relief companies which we talk

[Matt]

about, which is totally the way to go.

[Joel]

Yeah, those are Money Management International, the National foundation for Credit counseling. Those are two of the places you should check out. Moneymanagement.org, and FCC.org and the advice they offer. It's going to be more well aligned with your needs. The fees are lower than you'd encounter with the for profit companies. They might even be able to help you, by the way, reduce your balance or the interest rate that's attached to your debt. If you enter into a debt management plan, I think it's well worth looking into those agencies to see what they can provide for you. And it's man, don't ever pay a company money up front. Not for profit debt relief companies or debt advice agencies are just a much better way to go. So sorry, sorry these people are freaking you out, but it sounds like you still have time to wriggle free of the hook and move on and find better help elsewhere.

[Matt]

That's right. Let's quickly get back to the beer Joel that you and I enjoyed during this episode, which was a Wavelength IPA from Equilibrium, which is actually out of New York. Middleton.

[Joel]

Okay.

[Matt]

Middle or Middletown? I don't know.

[Joel]

But yeah. What'd you think? I thought this was nice. It was bright, had lemony vibes. Oh yeah, I was definitely getting a lot of like hops that like, I don't know, lemony vibe hops is what is what I'm gonna go with.

[Matt]

All right.

[Joel]

Like nice kind of citrus, bright citrus going on. Flavors going on in this one.

[Matt]

Sweet.

[Joel]

Yeah, I enjoyed it.

[Matt]

It made me think of like the like green peas which makes is typically what I think of.

[Joel]

It tastes a lot like lemons, which

[Matt]

is what I think of when. When I when I enjoy a burial beer or or another green hoppy flavored New England IPA maker. Other half where they name all their beers after like broccoli or collards or you know, different names like that. So it doesn't surprise me that these guys are also out of New York. But yeah, just really good. It's been a minute since we've had a great New England hazy and I'm glad you and I got to share it during our episode today, buddy.

[Joel]

That was delicious. Very nice.

[Matt]

Yep.

[Joel]

Glad we got to do it too. All right, that's gonna do it for this episode. Just go to howtomoney.com if you haven't been there.

[Matt]

That's where all the stuff is.

[Joel]

We got an interesting new article actually a couple one on Coast Fire that's that's really great. Written by one of my friends by Pam and a long form article about using artificial intelligence, employing it properly in your personal finances. So check that stuff out and sign up for the how to mini newsletter while you're there. And that's gonna do it though. Till next time, Best friends out.

[Matt]

Best friends out.

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