Ask HTM - Pro Help to Break the Paycheck to Paycheck Cycle, Down Payment Money Market Accounts, and Viable Student Loan Forgiveness Plans #979

Summary

Podcast Summary: How to Money – Episode #979 Release Date: May 5, 2025

In Episode #979 of How to Money, hosts Joel and Matt tackle pressing financial questions from their listeners, offering practical advice and actionable strategies to help everyday individuals achieve financial stability and growth. This episode delves into three main topics: breaking the paycheck-to-paycheck cycle, selecting the best accounts for saving a home down payment, and navigating student loan forgiveness plans. Additionally, they address questions on using credit cards for medical debt and deciding whether to sell an infrequently used vehicle to accelerate debt payoff.

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1. Breaking the Paycheck-to-Paycheck Cycle

Listener Question: Ann from California Ann, a 61-year-old single woman, finds herself trapped in the paycheck-to-paycheck cycle and is seeking assistance from a financial coach who can provide personalized budgeting and financial planning without focusing solely on investments.

Hosts' Response: Joel and Matt emphasize the importance of seeking a budget or money coach rather than a traditional financial advisor, who typically prioritizes investments over budgeting. They recommend low-cost options and reputable organizations such as:

• Money Management International (MMI): Provides debt management and personalized budgeting assistance.
• National Foundation for Credit Counseling: Offers certified counselors to create tailored financial plans.

Matt underscores the value of community and open conversations about finances to reduce shame and foster accountability. Joel highlights the significance of realistic expectations, acknowledging that overcoming financial struggles often requires gradual habit changes and time.

Joel [06:35]: "There's nothing to feel ashamed about. There's a way forward."

2. Saving for a Down Payment: Money Market Accounts vs. Alternatives

Listener Question: Phil Phil is saving for a down payment on a house within 12 to 18 months and is considering a money market account versus a high-yield savings account or a Certificate of Deposit (CD).

Hosts' Response: Joel and Matt discuss the suitability of various savings vehicles based on Phil's timeline and liquidity needs:

• Certificates of Deposit (CDs): Not recommended for Phil due to potential penalties if funds are needed before maturity.
• Money Market Accounts/Funds: Suitable for higher liquidity with competitive returns. They mention options like Vanguard's VMFX and Fidelity's Cash Management Account, which offer features like debit cards and checks.
• High-Yield Savings Accounts: Preferred for simplicity and competitive rates without the rigidity of CDs. Online banks and brokerage firms like Betterment also provide attractive rates and additional benefits.

Matt advises against investing for short-term goals to avoid market risks and emphasizes maintaining liquidity.

Matt [22:19]: "You can't go wrong either way here because they're very similar account types."

3. Navigating Student Loan Repayment and Forgiveness

Listener Question: Heather from Ohio Heather is concerned about her sister's escalating student loan balance despite consistent, on-time income-driven repayments. She seeks clarity on forgiveness eligibility and guidance on managing the growing debt.

Hosts' Response: Joel and Matt explore the complexities of student loan forgiveness, especially under fluctuating political landscapes. They discuss:

• Income-Driven Repayment Plans: Heather's sister is on a plan that cancels loans after 20 years, but the increasing balance is alarming.
• Policy Uncertainty: The hosts express skepticism about broad forgiveness measures but remain hopeful that existing income-driven plans will stay intact.
• Strategies to Maximize Forgiveness:
  • Reduce Adjusted Gross Income: Contribute to traditional IRA, 401(k), or HSA to lower taxable income, thereby reducing loan payments.
  • Consider Marriage Filing Separately: If applicable, to isolate income.
  • Prepare for Potential Tax Bills: If loan forgiveness becomes taxable, start saving to cover possible tax liabilities.

Joel emphasizes the emotional toll and reinforces the importance of staying informed and prepared.

Joel [37:47]: "Be prepared and be ready. Be saving up."

4. Using Credit Cards to Pay Medical Debt

Listener Question: Matthew Matthew is considering using a rewards credit card to pay off an upcoming $3,000 medical bill and seeks advice on whether the benefits outweigh the risks.

Hosts' Response: Joel and Matt weigh the pros and cons:

• Pros:

  • Rewards and Sign-Up Bonuses: Potential to gain significant rewards if the balance is paid in full promptly.

• Cons:

  • Risk of Accumulating Debt: Only advisable if Matthew can pay off the balance immediately to avoid interest.
  • Exploring Medical Aid: Before opting for credit cards, check if the medical provider offers financial assistance or reduced rates.

Matt advises using the rewards card only if Matthew is certain of timely repayment.

Joel [43:14]: "I think if I had a $3,000 medical bill, I would be looking to get a new credit card."

5. Selling an Infrequently Used Vehicle to Pay Off Debt

Listener Question: Anonymous The listener owns three paid-off vehicles, including an old truck that sees minimal use. Selling the truck could provide $5,000 to pay off the house faster.

Hosts' Response: Joel and Matt analyze the decision, considering both financial and practical aspects:

• Benefits of Selling:

  • Immediate Cash: $5,000 can significantly reduce the mortgage balance or other debts.
  • Reduced Ongoing Costs: Lower insurance premiums, maintenance, and storage fees.

• Potential Drawbacks:

  • Insurance Implications: Selling a vehicle might not always lower insurance costs, especially if it affects policies covering younger drivers.
  • Convenience: Owning an extra vehicle provides flexibility in emergencies or unexpected situations.

They recommend assessing the total cost savings versus the convenience and necessity of keeping the vehicle.

Matt [46:06]: "The cost of insurance, which has skyrocketed… holding onto it when you're using it so little likely means that there isn't enough value."

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Conclusion

In this episode, Joel and Matt provide nuanced and thoughtful responses to their listeners' financial dilemmas, emphasizing personalized solutions over one-size-fits-all advice. They advocate for proactive financial planning, informed decision-making, and leveraging available resources to achieve financial well-being.

Listeners are encouraged to engage with the podcast through the website howtomoney.com, where additional resources and tools referenced during the episode are available.

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Notable Quotes:

• Joel [06:35]: "There's nothing to feel ashamed about. There's a way forward."
• Matt [22:19]: "You can't go wrong either way here because they're very similar account types."
• Joel [37:47]: "Be prepared and be ready. Be saving up."
• Joel [43:14]: "I think if I had a $3,000 medical bill, I would be looking to get a new credit card."
• Matt [46:06]: "The cost of insurance, which has skyrocketed… holding onto it when you're using it so little likely means that there isn't enough value."

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This summary is intended for informational purposes and reflects the discussions from How to Money Episode #979. For personalized financial advice, listeners should consult with a certified financial planner or advisor.

Transcript

[iHeart Podcast]

You're listening to an iHeart podcast.

[Joel]

Welcome to how to Money. I'm Joel.

[Matt]

I am Matt.

[Joel]

Today we're answering your listener questions.

[Matt]

You know a buddy, we hope everyone had fantastic weekend. We're glad to see you back here, back in the podcast. You're back into the groove. It's Monday morning. You got stuff to do. You got podcasts to listen to.

[Joel]

You said, we're glad to see you. They don't know this. We're monitoring all their movements.

[Matt]

Yeah, the. It's like her.

[Joel]

She.

[Matt]

I forget, I never actually watched the movie with the, the phone.

[Joel]

Oh, I did a time ago. And I was like, that'll never happen.

[Matt]

The AI girlfriend.

[Joel]

It's happening.

[Matt]

Little did you know, Joel, that's the dystopian reality we now live in.

[Joel]

Not in my life, but in some people's lives.

[Matt]

So we are going to take listener questions. The listener is asking about breaking the paycheck to paycheck cycle. She's specifically wondering professional help is in order. Another listener is asking about our take on money market accounts. He's looking to park some down payment money. And we'll discuss student loans, the best way to proceed. Whether or not forgiveness is actually something that this listener can count on. We'll get to that. More on today's Ask how the Money episode.

[Joel]

Buddy, this ain't that blanket forgiveness. Oh, is that going to come to pass? I think everybody knows we know that's.

[Matt]

Not going to happen.

[Joel]

That's not happening.

[Matt]

Yeah, that's.

[Joel]

Yeah. But this is kind of more specified forgiveness that has been around for a long time. Is that going to remain. And other questions. Matt, real quick before we get to all of these great questions, just one idea for people. It's interesting actually. Americans used to move in a whole lot more numbers. We used to just be more willing to uproot, go somewhere for opportunity. And I guess that's actually maybe a little bit less necessary because of work from home. Right.

[Matt]

So has it declined?

[Joel]

It has declined. Yeah. Just. People are need to take a look.

[Matt]

At the latest BLS statistics and charts.

[Joel]

But my sister, my sister, my little sister is an exception to this rule. She and her husband are moving to a new city for a job offer. And one of the first things that came out of their mouth and they were excited about the job, they're excited about the town. But after that, one of the, one of the first things they mentioned was, oh, my gosh, you know how much money we're going to save by moving there. And because it's a smaller Town they live in kind of the heart of a big city right now. Very expensive to live there from a tax perspective, from a rent perspective, even just from an activity perspective. Like everything costs more where they live than where they're moving to.

[Matt]

Nice.

[Joel]

And so I just think second secondary cities in particular can offer a lot of those job opportunities, but then the living expenses go down considerably. He was able to negotiate essentially to get the same exact pay for the job he's moving to. She's able to keep her job, sort of.

[Matt]

So he didn't. So they didn't get a pay increase. They were able to maintain it, but effectively they got a.

[Joel]

It feels a raise like a massive pay bump because the cost of everything else is going down.

[Matt]

I mean, I'm assuming they're moving because they're looking to switch things up a little bit too. Sometimes you just want to like, check out a new place.

[Joel]

Sure.

[Matt]

You know, I don't know. It's a very different town than where they currently are, so. Yeah, but they were more natural outdoor sort of attraction as well, for sure.

[Joel]

And they, I think they were estimating they'd be able to save $600 a month in rent to rent something similar where they're moving to, which is kind of crazy when you think about it. That's like over $7,000 a year back in their pocket. So think of it like that. It's like an untaxed raise of that amount. That's pretty significant.

[Matt]

It's a move in the frugal direction for sure. I like it. And I also like the beer that we're going to enjoy today. Well, there goes my review from Save at the end of the episode. Now we are going to enjoy a Spring, which is a beer by Creature Comforts and not the Spring that is my favorite local restaurant, but Spring, the beer. And we'll share our thoughts at the end.

[Joel]

Yeah. Michelin award winning local restaurant. Correct.

[Matt]

We've been once since they won that star. And do prices go up afterwards? Yeah, you better believe, really. And rightly so. It's an amazing place. Yeah. I'm going to guess supply and demand, baby. Like the prices went up around 20 to 30%.

[Joel]

Wow.

[Matt]

For the exact same dishes.

[Joel]

Yeah.

[Matt]

And they weren't pompous or showboating, but you could kind of look off down the side towards the kitchen. You kind of see the. The Michelin star plaque just kind of like subtly placed within view of the diners, but not like it would have been, I would say, lacking taste. If they stuck it like gauche on its own little pedestal in the middle of the place.

[Joel]

I would be interested to know random. Before we get to listener questions, I'd be interested to know if restaurants who win a Michelin star, if that's the norm. I gotta imagine it is. There's enough foodies who follow Michelin star awards and they say, oh, now I want to go to that restaurant. And it just increases bookings. More demand means, hey, we're going to have to raise rates to just kind of create equilibrium here.

[Matt]

Yeah. There's been articles written about how winning these awards just completely ruins the restaurant because of the different expectations. And essentially you have to, you do have to cater to a different crowd, a different kind of folks who are looking for maybe a heightened experience. And then all the regulars who were there the whole time, that made it, that helped.

[Joel]

I don't know if you helped them make it, but you helped them keep the doors open.

[Matt]

You weren't back the amount of money, sous chef. I will say the amount of money that we spent there, I felt like we single handedly did it. Joel. Okay. No, not quite.

[Joel]

All right, well, let's get to listener questions. And if you have a money question, we want to hear from you. The funkier the better. You can just, yeah, literally record a voice memo on, on the voice memo app of your phone. Say, hey, I'm Denise from San Diego. And then your question, and if you really are Denise from San Diego, we definitely want to hear from you. But whatever your money comes from, she's.

[Matt]

Looking at her phone and like, they really are watching me.

[Joel]

How did they actually know? I thought they were joking. So if you want the directions, go to howtomoney.com ask, but it's super simple. We look forward to hearing yours and taking it next week on the show. Matt, let's get to a question about living paycheck to paycheck and how to escape that cycle.

[Ann]

I'm Ann and I'm in California. I'm a single woman, 61 years old. I believe that I'm in the lower end of middle class. Lately, I find that I'm living paycheck to paycheck. I looked into using a financial planner. However, I found that they really only work with investments and I don't have any investments. What I'd like is a financial coach, someone who can help me with budgeting and looking at my situation and then making suggestions. I'd like to meet with a person for a low cost. I'm not interested in an online worksheet type program. My question Is, is there such a person who can do this? Thank you.

[Matt]

Bye.

[Ann]

Bye.

[Matt]

Oh, Joel, what do you think about Ann hating on all the worksheets and the, the different programs out there that folks are, you know, folks are selling or sometimes giving away? We've got worksheets on our website that we give away.

[Joel]

I think those can be really helpful. But I also get, I get what she's saying. The desire to have a one on one relationship with a human who can help you out through this, like, that makes sense to me totally. That's how I work best.

[Matt]

But a real life person. Yeah, I don't want to talk to no AI Chatbot. Give me a real person with issues.

[Joel]

I was literally talking to a friend the other day and he was like, you guys should totally have an AI Chatbot. You have all the podcasts, all the content on your website. You could feed it in there and it could spit out Matt and Joel answers right and left to people and I don't know, man, I'm just kind of trying to avoid that AI game as much as possible.

[Matt]

That was one of the first questions. So, man, we're really going off the rails here. But back when we were talking to somebody we had, that we had hired to do some work on the site and one of our questions was about AI. We're talking about these large language models. Can we create our own chatbot, train it on our episodes, and essentially have answers in our voice the way that we would talk about it?

[Joel]

It's.

[Matt]

I don't know, it's a unique proposition. It is, but he's just like, we're not quite there yet. Maybe we are now because that wasn't again, the rate at which things go. Yeah, it might actually be a reality, but. And I've got to say, your desire here to avoid a financial advisor and instead to work with a money coach specifically is brilliant. Most folks, they tend to think of advisors as the only game in town when it comes to help with their money. But the average advisor, they don't do a whole lot with household budgets and holding people accountable. So your desire to find like a coach is totally. It makes a ton of sense. Advisors are going to be more interested in helping you to invest then the vast majority. Like they're not even going to want to work with you unless you've got like six figures of investable assets to your name either. This is also why Robo advisors, they found a nice niche as well for them to people who don't have a ton of money, but they are Looking for some of that additional help. Not unlike an AI chatbot.

[Joel]

Joel, kind of the in between step there for a lot of newbie investors.

[Matt]

Totally. And plus, you would likely pay way too much money if you ended up going with a financial advisor as well. So a budget coach, I think that makes a whole lot more sense.

[Joel]

Yeah. The cheapest model we know of essentially to get a financial advisor on your team to help you out basically is at minimum $150 per hour long session. And that's through the website hello Nectarine. But even they. It used to be flat fee 150, now it's flat fee 150 to 300. And so the price to hire a financial advisor is incredibly steep. We've had budget coaches, Matt, on the show before and you know, one of those folks or one of those types of folks is likely the right choice for you. And it's just, it's such a great segment of the finance space and it doesn't get enough love. Like nobody talks about budget coaches or money coaches. These folks, they offer, they're often offering services because they've had a meaningful financial awakening themselves. They've had to go through a debt payoff journey that was a multi year long slog. They learned a whole lot through trial and error in the DIY process. And so they've also on top of that been through the emotional roller coaster. Right. That can be and often is living to pay paycheck to paycheck. They know the right questions to ask and they often. That often allows them to better speak to how to turn the ship around. Right. To speak into your life about what's going on because of what they've gone through themselves. And typically they get paid. Yeah. Like an hourly rate or they charge for a specific number of sessions. I don't know, maybe like 350 bucks for four sessions, something like that. But I do think that budget coach, one, it's going to be cheaper and two, it's going to be more highly targeted to what you're going through. It's going to be more relevant. A couple of specific folks we've had on the show or even ones that we haven't looked that we can recommend. Erica Young, she's been on the show. Elena Fingal, she's also been on the show. And then this couple who runs a podcast called the Price of Avocado Toast, they're awesome folks and they're also financial coaches on the side too.

[Matt]

So that being said, and doesn't have a ton of money. So I also Want to point her towards free and cheap resources from some different nonprofits. In particular, I'm thinking of mmi, which is Money Management International, which by the way sounds super fancy and like wealth advisory, but they're not. They're there to help folks deal with debt and turn their finances around. Also national foundation for Credit Counseling. These are both excellent resources in order for you to gain credit, to gain some budget counseling. You can get one on one advice from a certified counselor there with those organizations and they'll typically help you to create a personalized plan. Kind of like if you're looking for a roadmap for moving forward. If you, you know, you find yourself kind of spinning your tires a little bit, perhaps this is going to allow you to gain some of that traction. And I'm not sure how much debt you specifically have, but I think they can help you to create a debt management plan to get rid of it more quickly. But don't trust some of the for profit companies who make these massive promises and end up under delivering. I will also say a money coach is no substitute for you learning some of this yourself. And so I'm talking about a DIY education. It makes me think of someone who's interested in becoming a real estate investor who opts to, let's say, hire a property manager. Well, if that were to be you, like you wouldn't even know the important questions to ask in order to hire a good property manager because you've never been exposed to this at all. And so I think listening to podcasts like this, reading books, this is still crucial. We've actually got a link to some different resources up on the website to where, I don't know, I think that can help you to get your, your journey started. One other free resource too. Don't underestimate the power of community and friendship. I think the ability to link up with somebody or to man, this isn't something that we said in a long time, but one of the goals for our show was is for money, personal finances to not be taboo. And when it is, people are afraid to talk about it. And when it's not, it's something that you talk about, you engage with, you challenge each other, you hold each other accountable and it allows you to see incredible progress, I think on a very truncated timeline. So not to mention this is something we've talked about recently, but the fact that relationships are always key to long lasting happiness. And so you're kind of like doing like a two for one here by talking to your friends about personal finances. It should be something we engage with and ask each other questions about as opposed to it never coming up.

[Joel]

I think there's also a lot of shame for a lot of people when it comes to their personal finances. And the more we can kind of normalize talking about it, the more we can kind of take some of that shame away. Bring, bring out those mistakes into the light. Because guess what, everybody has made similar mistakes. Right. So where Ann is, it's not uncommon. And there's also nothing to feel ashamed about. There's also a way forward. What it comes down to Ann, to get this ship right back on the right path. It's going to take changing some habits. Right. Feeling some pain along the way as well. Right. You might need to go on a bare bones budget, which we have articles about on our website, if you want to check it out for a few months to gain some savings, to gain some stability. I think it's important to mention that for most folks getting into a financial hole where they're living paycheck to paycheck, or where they're in debt that they didn't see coming, that they weren't planning on taking on, well, it often took. It was little things over the course of many, many months, if not many, many years. And then once the light dawns on you, hey, I'm ready to make a change, a lot of people think, all right, how am I going to get out of this in the next three months? And it's just, it's just not possible. Right. So you also have to have a realistic time frame and expectations about how long it's going to take to turn this thing around. And I think there are times to hire an expert. Right. And the information, the accountability you receive, it certainly might be worth the money that you put out there, the money you're forking over. You might even make progress more quickly. Right. Also, you mentioned you didn't want spreadsheets. Well, what about software? Software is something that's at least worth bringing into this conversation. Ynab, which is short for you need a budget and Monarch, those are really great software programs. It's not kind of the worksheet you mentioned, but when you kind of put all of your financial information in one place, they can help you think through where your money's going. You know, Monarch, even Pop pops up, hey, you get this recurring subscription, you're about to pay for it and you'd be like, wait a second, I forgot about that. And you can go cancel it really quickly. Just some of those benefits could far Exceed the costs with a financial software, with a budgeting software like Ynab or Monarch. It's not the same thing as hiring an individual, but it could be, I think, a decent middle ground solution.

[Matt]

Yeah, and I think that those are in a completely different class and different category than worksheets, which in my mind there's a whole lot of like thinking and dwelling and trying to like discovery that typically takes place with worksheets. But with software like these are tools that allow you to immediately take action. And that's what's so great about that also. And like you mentioned too, that you don't have any investments. And I want to point out that yes, you need to get your financial footing in a good place. But beyond that, I want you to set your sights a little bit higher too. Not just not living paycheck to paycheck, but you know, starting with the money gears, making sure you've got a basic emergency fund set up. Wish do you remember the amount, Joel? The new updated inflation.

[Joel]

Is it like 35, 50?

[Matt]

3,045. Okay, so $3,045. That is the new inflation adjusted emergency fund. Once you've got that in place though, start. I want you to start thinking about yourself as an investor because you still got some time to be able to make sure that you are going to be in a more comfortable position when the time comes for retirement. But Joe, we got more to get to. We're going to talk about old trucks, student loans, that and more right after this.

[Joel]

Are you 100% sure you're doing all the smartest things for your money? To be completely honest, I wasn't. And that's coming from someone who has committed their life to personal finance for nearly two decades.

[Matt]

That's right. So you looked into a company called Domain Money. Their team of expert certified financial planners get to know what matters the most to you. They analyze every aspect of your financial life. They build you a personalized plan with clear steps to reach each one of your goals. They make it incredibly easy. Domain Money is like having your own personal cfo, therapist and money coach all in one.

[Joel]

Yeah, I personally worked with Katie Song. She's an absolute gem. And the best part is that you can work with Katie or one of the expert certified financial planners on her team. I'm always looking out for great resources to recommend to the how to money community. And I can confidently tell you that Domain Money exceeded my expectations. And for a limited time, they're doing free 30 minute strategy sessions. So start today by booking a free strategy session with one of their experts by going to domainmoney.com howtomoney I am a current client of Domain Money. I received a financial plan as part of the compensation for Domain Money's advertising on the podcast. And therefore I have an incentive to promote Domain Money.

[Matt]

You know, the stoics, they value humility. It is vital to living a good life. That being said, don't fall into the trap of thinking too little of yourself, specifically your ability to earn an income. We all insure our cars, we insure our homes. If you are an owner. But how about you? I'm actually talking about life insurance here. What about protecting your family's Future? And with Policygenius, you can find life insurance policies starting at just $276 a year for $1 million in coverage. It's an easy way to protect the people you love and feel good about the future.

[Joel]

Yeah, Matt, I have purchased life insurance multiple times in my life because, yeah, when you married, you need a basic policy. And then. And then, you know what, you have a few kids and you're like, oh.

[Matt]

Man, my needs have increased.

[Joel]

The needs have gone up. And so that's where I've gone into life insurance laddering, having multiple different term life insurance policies. The great thing about policygenius is that it combines digital tools with the expertise of real licensed agents. You can compare quotes from America's top insurers side by side for free.

[Matt]

Check life insurance off your to do list in no time with Policygenius. Head to Policygenius.com to compare free life insurance quotes from top companies and see how much you can save. That's policygenius.com hey there, Joel.

[Joel]

Here with my buddy Matt from How to Money. Matt Summers right around the corner. I know you got that travel bug. What adventures do you have planned?

[Matt]

Oh, man, you are going to love this. We're planning this epic road trip up the east coast with the entire family. Just think, lighthouses in Maine, monuments in D.C. plus everything in between.

[Joel]

That's amazing. I'm jealous. Thinking about stowing away in your lugg. Wait a second. How are all six of you going to take this road trip?

[Matt]

Okay, so initially we were thinking about taking an rv, but I found some really awesome Airbnbs along our route. Places with something for everyone. And what I really love is that with Airbnb is we can always start our days with like a good breakfast at home. Like, it's our home away from home. And I love that routine. I don't know if you've ever tried getting a family of six out the door, let alone trying to find some breakfast in a middle of a city that you're not super familiar with. It's a challenge. Plus it's a budget killer.

[Joel]

Yeah, that's true. Sounds like chaos, to be honest. And you know that's actually what makes hosting on Airbnb so special, right? You're giving travelers a chance to really live like a local. They even have the co host feature, which gives you access to a network of high quality local co hosts who can help take care of your home and your guests when you're not there. Find a co [e-mail] host Matt the Tease you made before the break had me thinking of a country song, my old Damn Broken Trucks, other country songs.

[Matt]

And the woman who left me about student loans.

[Joel]

Though there should be at this point there should be. They've been pretty devastating.

[Matt]

That truly would be the saddest country song in existence.

[Joel]

All right, let's take this question from listener Phil Matt. He has a question about saving for his down payment and he highlights an account you and I don't talk about maybe as much as he'd like.

[Phil]

Hi Matt and Joel, I'm in the process of saving for a down payment for a house and I've been advised to put some of my money into a money market account. I don't hear you guys talk a lot about these and I was curious if it's something you don't recommend or if you do recommend and why or why not. I have looked online for some information but haven't found a lot of information about money markets. The account that I was recommended was Pcoxx and it's averaged about a 5.5% return this last year and the year before was about 6.5% and I assume with the interest rates going down it'll lower a little bit this year. That being said, I have a high interest checking account with Lake Michigan Credit Union and it offers 3% APY but only up to 15k. So since I'm over that and saving for a down payment on my house, I'm looking for a single place to put all my money. I did look it up with Dave Ramsey and he suggests a CD over a money market account, but didn't really explain why other than he said the rates were better. However, I don't see that the rates are better in CDs right now. Just for reference sake, I'm planning to purchase a house in 12 to 18 months, so I'm looking to have this money available and Liquid easily. And from what I understand money market accounts, you can get the money back relatively quickly when you need it. Thanks for your help. I appreciate everything.

[Matt]

Phil, Joel's actually going to make a donation. If you could just put together a GoFundMe for home down payment.

[Joel]

Yeah, I'll make a donation.

[Matt]

Joel's going to pitch in about 32.

[Joel]

Cents is what I can spare right now.

[Matt]

By the way, did he actually say his name? I don't know he said his name, but we know his name because he sent us the email. Of course. But Phil, good question. There are a lot of different places where you can save your down payment these days. You can save your money over in Joel's account and he'll. That's right.

[Joel]

No, the interest rate's much worse than what Phil's describing.

[Matt]

CDs, money markets, savings, these are all different accounts. Each one of these exists for different reasons. So we'll, we'll do our best to explain which one might make the most sense for you.

[Joel]

Yeah, they sure have a lot of similarities, I will say, but they have distinctive qualities that Phil's kind of looking to parse the details. So Matt, let's parse the details. Let's start off by talking about CDs. And I think they're out for Phil. Right. I think he knows that too. But because he said he needs liquid cash for the home purchase, that's really not in the too far distant future. You could, I guess Phil, opt for a short term cd since you said you needed the money in like let's say 12 to 18 months. But hey, what if you put it in a 12 month CD, you found the perfect home in 11 months and you're like, man, I need that down payment like now. Well, it's just not worth the loss of the interest you would take by breaking that CD would typically you forfeit the last three months of interest. Which would mean, hey, basically any other savings vehicle you picked would have been better than the cd. I think that's just a non starter. Like I wouldn't even consider it. There are. Matt, you know this well because you're an Ally customer. There are no penalty CDs from Ally, which I believe you put your money in at one point, but you pay right for that more flexible product by agreeing to a lower starting interest rate. That's right. There's something, I don't think it's quite half a point, but there's a, there's a decent gap between signing up for a CD that doesn't have a no penalty rider on it, essentially through Ally. And so yeah, you're just going to get paid less on your money and it just doesn't make sense for what you're trying to accomplish here. Although CDs might still make sense for other people.

[Matt]

Right?

[Joel]

Especially if they need downside protection against the possibility of falling interest rates for their cash. That's when a CD makes sense. But only if like, hey, you can lock it up, you know, you're not going to need to touch it beforehand. And that's just not the case that Phil's in.

[Matt]

Yeah, he wants to be ready to pounce. And we're going to not recommend CDs because Dave Ramsey sounded like he recommended that to Phil. So we're going to immediately just say the opposite of whatever Dave says. Now that doesn't surprise me.

[Joel]

Oh, did Dave tell you safe for retirement? Don't do it, Phil.

[Matt]

You better. You better not. It makes sense that Dave or someone you know, over that was a part of his crew mentioned that because just I feel like generally speaking they're a little bit more risk averse, at least when it comes to debt taking on. Well, yeah, I guess we're not talking about debt here, we're talking about savings. But there are a lot of things that we do agree with when it comes to Dave and some of his principles. But there's some things that we don't agree with, like credit cards, namely.

[Joel]

But I pay off your mortgage right there.

[Matt]

Yeah, I get the desire wanting to, to cross check some of these different recommendations. But when it comes to high Yield savings accounts versus money market funds, I'm going to say that we're probably a bit more partial to high yield Savings. But you truly, you can't go wrong either way here because they're very similar account types. One is offered by brokerages, that being money market funds, and the other is going to be banks. The High Yield Savings Account, of course, Vanguard's VMFX is actually a fantastic choice on the money market front. You do have to have an account at Vanguard, but the holdings of that fund are in very stable assets like cash, government securities as well. Fidelity, they've got a cash management account that's pretty good. And one perk of that, I believe that's Spax. Yeah, not Spanx, Spax, S, P, A, xx. I believe a perk of that versus a High Yield Savings account is you can use a debit card and you can write checks directly from that, which you typically can't do from a High Yield Savings Account. Although that being said, it's not too difficult to transfer money over from the High Yield Savings directly to a checking account, assuming you also have a checking account with that particular institution and they offer free checks. But the returns they're close to or sometimes oftentimes, I guess at least lately they've exceeded some of the highest returns on High Yield Savings accounts as well. So if you are a Vanguard or if you're a Fidelity customer, this is, I would say, a very reasonable place to stash your cash that you're going to need for a down payment.

[Joel]

Yeah, I think Money Market fund is definitely a reasonable option. And there's a reason I think more and more people have gravitated towards doing essentially all of their money business with a low cost brokerage firm. Because it's like, hey, I'm going to invest there, I'm going to have my cash management account. I'm just going to have it literally all under one roof. And the perks of some of those cash management accounts at the brokerage firms have gotten really good.

[Matt]

Right.

[Joel]

When it comes to like no fees, free ATM withdrawals, I think Schwab kind of started it. Fidelity has a great option now too. So more and more people are saying that works for me. And they're just saying, I don't think I need a bank at all. I also just want to say I think banks do a really good, some banks do a really good job on the front. Obviously not the big banks. So we love cit. We talk about CIT regularly. When you got lots of money, like a down payment fund because they've been paying top notch returns that are at or above some of these money market fund rates. If we're talking about like small time savings, like hey, I've got 1500 bucks to save, should I move banks? Well, the stakes are lower there, right? If you don't have a lot of money on hand. But if you've got a lot of cash because you're saving for, to buy a house, then every, every half a point or something like that matters quite a bit when it comes to your overall amount of returns, how much money your money is making. There's just no reason to not be with an online bank that offers highly competitive rates. Phil mentioned that he has a 3% checking account with strict limits. What 15k? Matt, you can't earn above that. Probably over 15k. You're making 0.01% or something like that. Well, now's the perfect time to move, get out of that. Credit unions are great for borrowing. They're not great for savers. And so they're just great high yield savings accounts out there for you, Phil, that are going to, you know, you're going to get a good bit more on your money with zero caps. So you're going to make the full 4 plus percent on all the money that you have right in that account. We don't want folks jumping around all the time to score a slightly higher interest rate. But moving your, your funds in your business to a bank that consistently pays customers incredibly well. I think, I think it's a no brainer.

[Matt]

Yeah. Specifically because it's something that you want to do regardless. It's not like you're only doing it for this down payment. This is just good general personal finance hygiene essentially. Also Betterment's got a pretty solid cash management account too. I think right now you can snag an extra half a percent as a new custom for three months for a total of four and a half percent right now. So that's pretty cool.

[Joel]

That's. Yeah. Like about the best I know of.

[Matt]

Yeah. Of course. I want to point out here with your timeline, Phil, do not invest any of these dollars and which might bring up a small note when it comes to the semantics here because there, there is a technical difference between a money market deposit account versus a money market fund and the one that you specifically called out. Technically it is an investment, but it's an investment that is very, very unlikely to ever go down in value. So a deposit account is actually FDIC insured, whereas the fund is technically an investment. And technically that means you could see that go down, but effectively it's not going to go down.

[Joel]

Yeah.

[Matt]

So I wouldn't, I wouldn't worry too, too much about that because the, the Fed, they're going to come swooping in, they're going to save the day, which is what happened I think the last.

[Joel]

Time was that like 2009.

[Matt]

Yeah. There's the Great Recession when that was.

[Joel]

The case happened to what, one or two of those accounts and it was a big deal then.

[Matt]

It's not something you have to effectively worry about now. Even though technically I'm saying not to invest, but you are investing. Just a small note, something to be aware of.

[Joel]

That's another just parsing of the details between high Yield savings accounts and some of these money market funds. You'll also notice that these different brokerage firms have multiple different versions of cash management accounts or money market funds and they're all created a little differently. So know what you're getting into that's where I think for most people, Matt, the simplicity of a high yield savings account with one of our favorite online banks that consistently pays high rates.

[Matt]

It's tough to beat.

[Joel]

Yeah, it's tough to beat. But I'm glad these other options exist. I do think the cash management accounts at some of these low cost brokerage firms have only gotten better and better and better. They've become a more compelling product in recent years.

[Matt]

Nice. Let's hear from a listener who is calling on behalf of not herself, but actually her sister.

[Heather]

Hi, Joel and Matt. This is Heather from Ohio and I'm a longtime listener and fan. My question is regarding my sister and her student loan payments. She graduated from college about 10 years ago. She's been making the income driven repayments and her amount that she owes has actually tripled from her original amount. Even though she hasn't missed any payments. She's been making them religiously. But I believe that after 20 years her amount would be. That she always would be canceled. But I wasn't sure if that was true or like, what can I guide her to? Because I feel like it's not clear. Thanks so much for any help.

[Joel]

Oh man. To see your balance triple, I gotta imagine that sucks. That feels like a punch to the face. So I hate seeing people go through the emotional turmoil of making payments on time, of like doing the right thing that they're supposed to do, right? Hey, I was told that this is what my student loan payment needs to be and doing the right thing every single month like clockwork. And then, hey, the balance continues to increase. It's so unnerving. Like I can't imagine going through that. It just doesn't feel right to be making on time payments, seeing the balance increase. And then on top of that, with the political football that student loans have become, I think worries are mounting for student loan borrowers of all stripes, especially ones who are like, well, I know the, the Biden forgiveness thing, that's not going to happen. But what about the forms of forgiveness that were essentially promised for many, many years before Joe Biden came into office? Is that going to stick around?

[Matt]

Yeah, well, most of that's going to stick around. The save plan is sunk. But these other income based plans, it just definitely seems like even if changes are made, that all existing loans would still have access to current payback plans. So for folks who are paying back their loans on an income driven repayment plan, like your sister Heather, I wouldn't be sitting on pins and needles. I would keep paying as agreed. Just under the assumption that the federal government is going to hold up their end of the bargain. But this is just a sad outcome of the political environment that we are currently living in. And not. I mean, I'm going to risk alienating listeners here. But this is why, like, truly our political system is broken. Because when you make a bunch of sweeping actions based on executive orders, which is what happened in the last administration, and then what happens when the other party inevitably comes to power? Well, with the strike of a pen and a phone, you know, and phone calls with this with a pen and with a cell phone, Joel, all of that gets undone.

[Joel]

Yeah.

[Matt]

And who suffers? It's the American people. And so it's the part of our politics that I hate the most, the fact that it seems like it's there more as entertainment, as opposed to doing the boring work of governing and legislating, which is where it actually does need to take place. Right. If these are laws that were truly laws as opposed to eos, I think we would see the American public in particular get jerked around a lot less.

[Joel]

What you're saying is process matters. And it seems Congress has become like a commentating class. They like to go on the nightly news shows and talk about the moves back and forth instead of legislating. If they would legislate the priorities, less.

[Matt]

Public servants and more using the platform for themselves as individuals as opposed to serving the country.

[Joel]

Yeah. And would feel like you're getting less done, I think, as the president. But it's the right way to go about things, and it's the way the founding fathers set it up so that we would have slower, gradual change instead of the whiplash we've all been enduring. But, Heather, your instinct, right, is that this is clear as mud is kind of true. The smartest way to proceed, I think, is as if the current arrangement stands and will continue to stand. Kind of like Matt mentioned, you said that she graduated from college a decade ago. I'm assuming this is undergrad. Under current IDR rule, she is eligible for forgiveness after 20 years of payments. So basically, hey, she's halfway there. And I think that's another reason that the ballooning balance, it's just not something to freak out about. Even if it's tough to watch, even if it's hard to stomach, that advice doesn't apply to everyone. I think some other people might be better off trying to pay their loans in full, not waiting on forgiveness. It just might not make the most math sense to hold on for 20 years and opt for a smaller amount of Forgiveness, but especially for your sister. It sounds like clearly forgiveness is going to be, needs to be. The aim is going to be kind of her salvation to a certain extent. Especially think about what's going to happen over the next 10 years, Matt. If the balance is already tripled, well, chances are it's going to grow a heck of a lot more. Think about ultimately what Heather's sister is going to be forgiven. The amount of student loan debt that will just be wiped off the face of the earth for her in one fell swoop. It's going to be massive.

[Matt]

Yeah. And there are even ways for your sister to work to maximize her forgiveness. So let's talk about that strategy here for a second. And what I mean by that is lowering her payment by reducing her income. So for instance, the more she quit.

[Joel]

Her job, is that what you're saying, Matt?

[Matt]

Yeah. They can't tax you if you don't have any income. The more she invests in traditional tax advantaged accounts and the more it's going to reduce her adjusted gross income. That would be a traditional IRA or a traditional 401k or an HSA. The more that she can sock into those accounts, the less that she's going to owe the government when it comes to the student loans. It's just the way it is. Obviously she does, you know, she's got to have money to pay for a roof over her head, to pay for food, groceries. But making these additional contributions can reduce her payment amount which would increase her balance even more over time. Wait for it. But lead to more overall forgiveness. At the, at the end of this period of time, it means less of her money actually going towards student loan repayment. So it's just, it's tough to stomach, but it's almost seems like that this can just be a stage of life where there's a whole lot of deferred spending. She's really focused on investing because investing right now it's a double edged sword because it means more time that that money is going to have to compound over time. But it also means the added benefit of paying less right now towards her student loans.

[Joel]

Yep, 100%. So it feels like a gamble, but I think that's the right approach, is to try and minimize the amount of money going out in monthly form towards a student loan payment. Yeah. Which means the balance is going to grow, but ultimately there's a big win at the end of the day or at the end of a decade.

[Matt]

Of the decade. Yeah.

[Joel]

And last but not least, I would say it's A good idea for your sister to start saving, though, for a potential tax bill now. And that is because the one caveat at the end of forgiveness is that your growing balance. Well, when that's forgiven, it could end up generating tax consequences. And so I say could, because that is the biggest unknown. What is Congress going to do about that? There's currently a law in place that prevents individuals from incurring what's been called a student loan forgiveness tax bomb. But that law is set to expire at the end of this year. And so anybody who has had their student loans forgiven in recent history, they haven't had any sort of tax bill. At the end of the day, they haven't had to pay anything. But let's just assume that there was, like $150,000 in forgiveness Matt of student loan debt 10 years from now, the tax bill would be not insignificant. And so, Heather, for your sake and for your sister's sake, I hope that gets extended. But if not, just be prepared and be ready. Be saving up. Your sister should be saving up for a tax bill that might come to pass.

[Matt]

Yeah, yeah. So you're addressing the tax implications. One other. One other thought, going back to her, reducing her adjusted gross income, the implications were she to get married. I didn't get an impression that she's necessarily married right now. It sounds like she might. Her sister might be flying solo at the moment, but were she to get married, this might be an instance. And this is really hypothetical, I guess. But if she combines her income with her partner, who might make a ton of money, well, that would. That's gonna have a dramatic impact on the amount that gets forgiven. So that might be an instance with where. Where she would continue to file married, but filing separately, because she would essentially want to isolate her own income to keep that technically artificially low for their overall health.

[Joel]

So if Heather marries. If Heather's sister marries rich, marries Prince Charming, like Heather's been trying to convince her to do.

[Matt]

Exactly.

[Joel]

That's when you got to.

[Matt]

We're reading between the lines. I know what kind of conversations Heather and her sister have.

[Joel]

I think it's good advice. If that comes to pass.

[Matt]

That's the strategy I'd employ.

[Joel]

All right, we've got more questions to get to more of your money questions, including using a credit card to pay for medical debt. It's kind of squirrely, but it could pay off. We'll talk about that and more right after this. Are you 100% sure you're doing all the smartest things for your money? To be completely honest, I wasn't. And that's coming from someone who has committed their life to personal finance for nearly two decades.

[Matt]

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[Joel]

Yeah, I personally worked with Katie Song. She's an absolute gem. And the best part is that you can work with Katie or one of the expert certified financial planners on her team. I'm always looking out for great resources to recommend to the How To Money community. And I can confidently tell you that Domain Money exceeded my expectations. And for a limited time, they're doing free 30 minute strategy sessions. So start today by booking a free strategy session with one of their experts by going to domainmoney.com howtomoney I am a current client of Domain Money. I received a financial plan as part of the compensation for Domain Money's advertising on the podcast. And therefore I have an incentive to promote Domain Money. Hey there, Joel. Here with my buddy Matt from How To Money. Matt Summers, right around the corner. I know you got that travel bug. What adventures do you have planned?

[Matt]

Oh, man, you are going to love this. We're planning this epic road trip up the east coast with the entire family. Just think, lighthouses in Maine, monuments in D.C. plus everything in between.

[Joel]

That's amazing. I'm jealous. But thinking about stowing away in your luggage. But wait a second. How are all six of you gonna take this road trip?

[Matt]

Okay, so initially we were thinking about taking an RV, but I found some really awesome AirB's along our route. Places with something for everyone. And what I really love is that with Airbnb is we can always start our days with like a good breakfast at home. Like it's our home away from home. And I love that routine. I don't know if you've ever tried getting a family of six out the door, let alone trying to find some breakfast in a middle of a city that you're not super familiar with. It's a challenge. Plus it's a budget killer.

[Joel]

Yeah, that's true. Sounds like chaos, to be honest. And you know that's actually what makes hosting on Airbnb so special, right? You're giving travelers a chance to really live like a local. They even have the co Host feature, which gives you access to a network of high quality local co hosts who can help take care of your home and your guests when you're not there. Find a co [e-mail] host 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 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 your biggest opportun.

[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 howtomoneY we.

[Matt]

Are back for the break and we'll get to that truck question here in a second, Joel. But first we now have the Facebook Question of the week, which is from Matthew, partial to that name. So I will probably have to pay off about $3,000 in medical bills coming up soon. Should I just find a good rewards card and do that? I don't have one at the moment. What do you think Joel? Is it time to this is where we separate ourselves from the Dave Ramsey's of the world.

[Joel]

Yeah. Oh yeah, yeah. I would say probably right.

[Matt]

Yeah.

[Joel]

But we need to then go into the specifics. I think the main question for Matthew here is can you pay off the balance on time and in full when the bill comes due? That's 3,000 bucks, right? So yeah, get the credit card if you have 3,000 plus dollars in savings and you're going to be able to pay the bill. If not though, no, because the rewards just aren't worth it. Even the more significant rewards that you can get from an initial signup bonus, which is what makes having a significant bill that's like a silver lining I guess Matt, because nobody wants to pay like $3,000 in medical bills. But if it means new credit card and sign up bonus that can make. That can just reduce the pain a little bit depending on what pain is going on in your body. I don't know that it's actually medically prescribed to do that, but it can reduce the financial pain. So I think if I had a $3,000 medical bill, I would be looking to get a new credit card. Right. Getting the brand new one, getting the sweet sign up bonus for paying that one bill. Right. Even if medical bills aren't that fun to pay. I think that makes sense and it's nice to do it. Not over a slew of transactions trying to monitor your progress, but being like boom, met the signup bonus makes it easy in with one swipe or one tap. That's kind of awesome.

[Matt]

Yeah. Assuming though that you do have the cash on hand and that you're not actually going to go into credit card debt. But also don't forget that you might have some recourse here to reduce the size of this medical bill pretty meaningfully or maybe even have it completely eradicated depending on your income. And so look into the financial aid possibilities that are offered there through that hospital or through that. That medical provider. Maybe you'll actually owe a whole lot less. That being said, it kind of sounds like maybe he's done that because he said I'll probably have to pay off about $3,000. So sounds like it's something that he. It's a journey that he's been on.

[Joel]

He parked up that tree and maybe the bill was higher and now it's been reduced to 3,000 and he can't get it anymore.

[Matt]

He's finally coming to terms that this is what it is. But last but not least, head over to the How To Money credit card tool to see what card might make the most sense for you. The top rewards often come in the form of travel points, so hopefully that's something you're open to. If that's case. The Capital One Venture X is well worth considering right now. If that's not something that you're interested in. Interested in Even something like the Blue Cash preferred card, which there's a similar theme that we've been discussing today, which is like doing something that you're already planning to do. The Blue Cash Preferred card is a fantastic card because it's not that hard to spend a ton of money at the grocery store these days. And so depending on how it is that you spend, that could be well worth the money.

[Joel]

Yeah. All right, let's get to another question. Matt. This one comes from Anonymous, which is a name I'm partial to. And they say we owe less than $10,000 on a house. We'll pay it off this year. Three vehicles, all paid off. Old truck isn't getting much use. We use it occasionally. Less than 5,000 miles in a year, the truck could fetch about 5,000 bucks. And that money would pay off the house several months faster. Would you sell it?

[Matt]

Well, I would say the value of the truck, like how much they can get for is only a part of the answer to this question. Because I think the bigger question is the ongoing costs of keeping the truck. So I'm talking about the cost of insurance, which has skyrocketed in recent years, but also repairs and maintenance. So even though this vehicle is close to full depreciation, you're still losing money in other ways if you keep it around. So holding onto it when you're using it so little likely means that there isn't enough value and instead selling it is going to be smart for you. So I love that you are prioritizing owning paid off vehicles, which is a rare tact to take when it comes to our transportation.

[Joel]

Yeah, all three of them owned.

[Matt]

Yeah. That's awesome. But we've almost never heard of someone who's regretted reducing their car fleet. Just makes life a lot simpler as well, less clutter. And when it's like the largest item other than your actual house that you own, I'm all for clearing that thing out.

[Joel]

I think you're totally right to point out not the what you could gain, but point out what you're actually losing month after month, basically in perpetuity by keeping that around.

[Matt]

Although I will say, okay, devil's advocate, I had a friend who they ended up selling an old vehicle. Heads up. Get a quote from your insurance provider and see what your premiums would go to. Because if you have teen drivers in particular, because my buddy, his teenage driver was on the old. Was a full time driver because they have to put him down as a full time driver on the oldest car. And by getting rid of that old car, they were forced to put him on a newer car. And so what they ended up doing was reducing the total number of cars that they had covered by car insurance by this provider. And what happened to the premium. It didn't, in fact go down, it went up.

[Joel]

Okay.

[Matt]

And so he was pulling his hair out when he discovered that because he thought there was no way that that was likely at all a possibility. But that is something. So that's the counter.

[Joel]

That's a smart tip.

[Matt]

That's the counter to the cost of insurance. Yeah, normal things like that.

[Joel]

Normally you get rid of a car from your fleet, your insurance cost is going to go down. But in those rare occasions, it might not. So I think that's a good point.

[Matt]

Teenage drivers, man, hop on the phone.

[Joel]

With your insurance company first and figure out what that would look like. And maybe you might say, oh, well, it's not going to save me anything on insurance, or it's going to save me so little to make it negligible. I'm going to keep this puppy around because, hey, it's not going to cost me really any more money in depreciation, which is the biggest nasty factor going against car owners. And the plus side, I guess, of owning that car, that truck for longer is that it's kind of convenient. The value is not going to decline meaningfully. You got to spare right when another car is in the shop or something like that. But there are other solutions to that problem, and I think that just require a little more inconvenience, like renting a car, borrowing one from a friend in a pinch, or Uber. Like, I think the sharing economy, the reality of the sharing economy, it might be the perfect solution, right, to save this poster a bit of money here. Plus, you don't have to worry about fixing the old truck. Truck. As more issues start to pop up with it. As all of us know who have driven older vehicles. Once you start getting to that point, I'm not trying to. I. We don't want people to get rid of their old car, trade up to a new car because of potential fixes they'll have to make most of the time. But the truth is, the older the ride, the more repairs you're gonna have to make. And it just becomes a more dicey, difficult decision when the repair bills get expensive and the value of the vehicle goes down. And so getting rid of it while it's still running, well, maybe avoid you from having to make a decision like that.

[Matt]

Yeah, unloading it essentially before it's a problem. I'll point out to getting $5,000 is cool. You know, you get that money back in your hands. You're talking about paying off the house early. I would be very hesitant to do that considering where you are on the amortization schedule of that house. The fact that you're basically paying no money to the bank right now, regardless of what your interest, I mean, you're paying something, but like relatively speaking, you're paying almost nothing. And regardless of what your actual stated interest rate is, you are paying much, much, much less than that right now because of where you are on the schedule. Most of the money that's going towards your payment is actual principal that is paying down the balance of that house.

[Joel]

It's the complete opposite of those early months and years of having the mortgage.

[Matt]

I mean, you're literally in like the last few months. I can. And I've never been to that stage of the payment cycle, so maybe that does something to you psychologically and maybe you want to get rid of it sooner, but I at least get the impulse right now where I'm sitting, I'm just like, no way that it's basically your own money. So why pay it off when you don't need to? And when instead what you could do is invest that money, assuming that you are in a stage of life where you are still growing your wealth. I would 100% be investing that money as opposed to paying off that debt.

[Joel]

Or even saving honestly, and just pay it off as agreed. Just because, like you said, what you're actually forking over an interest is infinitesimally small. And so prioritizing mortgage payoff. Although I get the psychological benefit when you pay it off as agreed, given kind of the terms you likely have in place in that mortgage and where you stand in it, it just makes almost no financial sense at all. It's really only a psychological win that you get.

[Matt]

That's right. Joel, the beer that you and I enjoyed today was a spring, which was a Belgian style white ale by one of our favorites, Creature Comforts. This, you know, it's called a white, but I feel like this just tasted full on, like Belgian golden. Like, not necessarily from the style golden. I don't know, it just tasted like liquid gold. Really enjoyed it, would you think?

[Joel]

Yeah, I didn't quite have like the most famous beer in this style is Allagash War White. Right. And it didn't quite have some of those, like, coriander notes that that beer has. And that's just a classic beer. I mean, it's such a good beer. And this beer I thought was fantastic. It was in that vein, but a little bit different. A little more orange, a little more floral, a little more refreshing, even a little crisper. Yeah, I kind of want to try them side by side to see, to see the difference because yeah, this is not my favorite beer style, but my goodness, especially this time of year, I dig it. I think that's pretty tasty.

[Matt]

Yeah, totally. The way I'm picturing an alligash white is it's a lot hazier and so like, like it's got more of those Belgian yeasts where it's so it's like this really creamy. Yeah. Like you're drinking a lot of yeast. Whereas this seems a lot more filtered, a lot more refreshing, but perfect to enjoy during some of these springtime months. Is it still spring? Technically, yeah. Feels like spring was like a month ago. It's full on hot now, which means enjoying more of these bad boys, buddy. But that's going to be it for this episode. You can find our show notes up on the [e-mail] where we'll have some of the different resources that we mentioned during this episode. And that's going to be it. So, buddy, until next time.

[Joel]

Best friends out.

[Matt]

Best friends out.

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[Matt]

In a world of economic uncertainty and workplace transformation, learn to lead by example from visionary C Suite executives like Shannon Schuyler of PwC and Will Pearson of iHeartMedia. The good teacher explains the great teacher inspires.

[Joel]

Don't always leave your team to do the work.

[Matt]

That's been the most important part of how to lead by example. Listen to Leading by Example executives making an impact on the iHeartRadio app, Apple.

[Heather]

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