Ask HTM - Road Trips with Old Cars, Steps to Combining Finances, & When to Drop Escrow #997

Summary

Podcast Summary: How to Money
Episode: Ask HTM - Road Trips with Old Cars, Steps to Combining Finances, & When to Drop Escrow #997
Release Date: June 16, 2025
Host/Authors: Joel and Matt
Produced by: iHeartPodcasts

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1. Introduction and Episode Overview ([02:10] - [04:03])

Joel and Matt kick off Episode #997 of How to Money with their signature banter, addressing listener perceptions about their similar voices and sharing a bit of behind-the-scenes on their audio setup. They introduce the episode as an "Ask How Money" segment, where they will tackle listener-submitted questions on various personal finance topics.

Notable Quote:
Joel ([02:10]): "Welcome to How to Money. I'm Matt. I'm just kidding. I'm Joel."

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2. Listener Question: Road Trips with High Mileage Vehicles vs. Renting Cars ([07:09] - [17:56])

A listener named Rob from Ellicott City, Maryland, inquires whether Joel and Matt plan to take their high-mileage vehicles on an upcoming extensive road trip or opt to rent a car instead. Rob expresses concerns about the reliability of older cars during long journeys, especially with family in tow.

Discussion Highlights:

• Depreciation vs. Wear and Tear: Matt mentions calculating the depreciation cost of using their car for the trip, estimating a loss of approximately $600 for 3,000 miles.

  Quote:
  Matt ([08:42]): "I'm talking about losing $600 at least in value on the car by putting it through its paces."

• Peace of Mind: Both hosts emphasize the importance of reliability and avoiding potential breakdowns that could disrupt travel plans.

  Quote:
  Joel ([10:01]): "Especially for that private audience with the Pope that you've got coming up."

• Rental Car Benefits: Renting offers unlimited mileage and newer vehicles, reducing the risk of unexpected repairs.

  Quote:
  Joel ([12:38]): "The nice thing about renting a car, especially when you're going on a really long road trip, is that you benefit from the unlimited mileage..."

• Emotional Attachment vs. Practicality: Matt discusses the emotional value some may place on their vehicles but acknowledges it's not a factor for them.

  Quote:
  Matt ([13:21]): "It's not about the vehicle that we're traveling as opposed to what we're doing as a family."

• Final Decision: Joel and Matt lean towards renting for their trip, highlighting significant cost savings and reduced risk.

Timestamp Reference: [07:09] - [17:56]

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3. Listener Question: Combining Finances After Marriage ([22:47] - [35:03])

Justin from Kokomo, Indiana, recently married and seeks advice on merging finances with his spouse. He details concerns about setting up joint accounts, determining contribution proportions, and managing budgeting tools given that his wife isn't interested in using YNAB (You Need A Budget).

Discussion Highlights:

• Philosophical Alignment: Joel emphasizes that combining finances aligns both partners towards mutual financial goals.

  Quote:
  Joel ([25:07]): "It's the New Grand Central station of your finances."

• Practical Steps:

  • Single Joint Account: Joel recommends funneling all income and expenses through a single joint account for simplicity.
  • Individual Accounts: Alternatively, keeping separate accounts with transfers to a shared account is possible but less effective.

  Quote:
  Joel ([25:07]): "Let that be the center."

• Credit Card Management: Matt suggests that each partner can maintain individual credit cards that feed into a shared budgeting tool like YNAB to manage transactions without overlapping responsibilities.

  Quote:
  Matt ([27:17]): "Keep it simple. Yeah, I'VE got this credit card, you've got that credit card, but both of them go into YNAB..."

• Legal Considerations: Joel advises checking state laws regarding separate accounts and the importance of updating beneficiaries regardless of account structures.

  Quote:
  Joel ([29:02]): "Look into the laws in your state to be aware of when you keep money separate."

• Communication and Shared Goals: Regular financial check-ins and aligning spending with shared life goals are crucial for maintaining transparency and cooperation.

  Quote:
  Matt ([31:02]): "You have to be on the same page...talk about the different goals that you have with your wife."

Timestamp Reference: [22:47] - [35:03]

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4. Listener Question: Dropping Escrow on a Mortgage ([35:10] - [45:23])

Steve from Plainfield, Illinois, with a favorable mortgage rate of 2.75%, contemplates whether to cancel his escrow account since his loan-to-value ratio has dropped below 65% and he is considering handling property taxes and insurance payments independently.

Discussion Highlights:

• Benefits of Maintaining Escrow:

  • Budgeting Ease: Automatically handling tax and insurance payments ensures timely payments without proactive management.
  • Preventing Oversights: Avoids the risk of forgetting to save for large bills, which can lead to financial strain.

  Quote:
  Matt ([37:56]): "Some folks might find themselves in the position of not having the cash on hand when it's needed."

• Advantages of Dropping Escrow:

  • Interest Earnings: Saving the escrow amount in a high-yield account can generate interest, potentially exceeding the cost of escrow.
  • Financial Awareness: Direct management encourages better tracking and optimization of expenses like taxes and insurance.

  Quote:
  Matt ([39:34]): "It's going to make you more aware of how much you're paying for insurance and taxes..."

• Potential Risks:

  • Missed Payments: Increased responsibility on the borrower to ensure timely payments, avoiding late fees or penalties.
  • Minimal Savings: The financial benefit might be marginal, depending on the actual interest rates and fees involved.

  Quote:
  Joel ([38:15]): "It's not going to be a massive money win."

• Personal Anecdote: Matt shares a past experience where reliance on the mortgage servicer led to a missed payment and subsequent penalties, underscoring the importance of active management if dropping escrow.

  Quote:
  Matt ([44:25]): "Property tax bill...did not get paid. I had to pay a couple hundred more because of interest accrued."

Timestamp Reference: [35:10] - [45:23]

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5. Listener Question: Paying for Childcare with a Credit Card ([48:56] - [54:55])

Jessica raises a concern about her daycare offering two payment options: automatic withdrawal without fees or credit card payments with a 2.65% surcharge. She currently uses her Chase Sapphire Preferred card to maximize reward points but is reconsidering due to the added cost.

Discussion Highlights:

• Business Perspective: Joel explains that small businesses pass on credit card fees to cover processing costs, a common practice especially among industries with tight margins like daycare services.

  Quote:
  Joel ([50:11]): "Jessica's Daycare is not alone here because small businesses like that pay a lot to accept credit cards..."

• Consumer Decision-Making:

  • Cost vs. Rewards: Matt advises weighing the 2.65% surcharge against the value of earned points. If rewards exceed the surcharge, it might be worthwhile.
  • Credit Card Alternatives: Suggesting cards with higher cash back rates in specific categories can offset the surcharge.

  Quote:
  Matt ([52:14]): "If you're trying to hit a spending threshold for a welcome offer...then that is 100% an instance where I would continue to pay the 2.65%."

• Practical Recommendations:

  • Evaluate Card Benefits: Use credit cards that offer higher rewards in the specific spending category.
  • Limit Usage: Avoid using credit cards for recurring payments where the surcharge outweighs rewards.

  Quote:
  Joel ([53:01]): "The likelihood of you coming out ahead is slim compared to what the guaranteed rate that you're paying is."

• Updated Emergency Fund: Matt introduces an updated emergency fund target, emphasizing the importance of financial preparedness.

Timestamp Reference: [48:56] - [54:55]

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6. Updated Emergency Fund Number ([55:07] - [57:18])

Matt and Joel announce an update to their recommended emergency fund target, adjusting it for inflation from $2,467 (2019) to $3,045. They highlight the importance of having a specific savings goal to enhance financial preparedness.

Discussion Highlights:

• Inflation Adjustment: Reflecting increased costs since the original recommendation.

  Quote:
  Matt ([55:07]): "Now it's 3045. That's because we adjusted it for inflation..."

• Goal Specificity: They emphasize that having a precise number helps in setting clear financial targets rather than vague goals.

  Quote:
  Joel ([56:03]): "The specificity of it matters."

• Flexibility: Acknowledge that the emergency fund amount is not one-size-fits-all, encouraging listeners to adjust based on personal circumstances.

Timestamp Reference: [55:07] - [57:18]

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7. Beer Review: White Ferrari ([57:26] - [59:54])

Joel and Matt take a lighter turn by reviewing a beer called White Ferrari from Vale Brewing Company. They share their impressions of the hazy double IPA, noting its depth, velvety texture, slight bitterness, and dry finish, which differentiates it from typical hazy styles.

Discussion Highlights:

• Taste Profile: Described as deep, velvety, slightly bitter, and dry.

  Quote:
  Joel ([57:31]): "It was deep. It was velvety. It was slightly bitter on the back end..."

• Personal Preferences: Matt relates the beer's characteristics to his preferences, mentioning its dryness and unique flavor profile.

  Quote:
  Matt ([58:06]): "It was really good. It was also a bit dry. It wasn't like one of these tropical, fruity, juicy hazies."

• Future Plans: The hosts express interest in exploring more breweries during their road trips, integrating family-friendly activities.

Timestamp Reference: [57:26] - [59:54]

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Conclusion ([59:54] - End)

Joel and Matt wrap up the episode by directing listeners to their website for resources and sign-offs, maintaining their friendly and approachable tone.

Notable Quote:
Matt ([60:07]): "So until next time, Best friends out."

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Resources Mentioned:

• How to Money Newsletter: how2money.com/Newsletter
• Rental Car Platforms: Priceline, AutoSlash, auto.is (Note: Verify current URLs)
• Emergency Fund Guidelines: Updated to $3,045

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This episode of How to Money provides practical advice on managing high-mileage vehicles versus renting for road trips, strategies for newlyweds combining finances, considerations for dropping escrow from mortgages, and evaluating the cost-benefit of using credit cards for childcare payments. Additionally, the hosts offer updates on their financial recommendations and share a personal touch with a beer review, balancing financial discussions with relatable everyday topics.

Transcript

[Joel]

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[Matt]

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[Joel]

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[Matt]

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[Rob]

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[Joel]

Welcome to how to Money. I'm Matt. I'm just kidding. I'm Joel. And you're.

[Matt]

Oh, you're actually going to. We're going to run with it. I am Matt.

[Joel]

That' today we're answering your listener questions.

[Matt]

You know what buddy? Just to completely throw I wonder if folks actually thought wait a minute, is that Matt? They're like, no, that's true. Joel. He's Just lying to us.

[Joel]

Some people say our voices sound alike.

[Matt]

So they do sound alike. And. Okay, here's.

[Joel]

You really think they do?

[Matt]

Well, they sound less alike for two reasons. One, we are in a better acoustically treated room. Back in the early days when both of our mics would pick up both of our voices, our voices did kind of meld together.

[Joel]

Yeah.

[Matt]

Secondly. Okay, three things. Secondly, we got better mics. Thirdly, I actually. Here's a little peek behind the curtain. I put a slight pan on our voices. And so as you are listening to this, and some listeners may have picked up on this, they might notice that my voice right now is coming through your left earbud slightly more than your right earbud, which is where Joel's talking out of right now.

[Joel]

That's right.

[Matt]

So Joel's on your right side of your shoulder. I'm on the left side.

[Joel]

And, you know, on the right side is always the angel.

[Matt]

I don't know which one is the angel and which one's the little devil, but.

[Joel]

I think it's obvious.

[Matt]

Now, this is our Ask How Money episode. We're going to hear from listeners asking questions. For instance, road trips and used cars. Can they commingle? We'll see. Another listener is asking for some specific steps when it comes to combining his finances with his new wife. And another is asking whether or not he's in a good position to drop escrow insurance there with his mortgage. We'll get to those, plus more on today's episode.

[Joel]

Sounds good.

[Matt]

Yeah, man.

[Joel]

Yeah.

[Matt]

Got anything for us? Any. Any. Any tips?

[Joel]

No. Let's get straight to the questions.

[Matt]

Well, I was going to say I was just emailing a listener who he shared the newsletter with five buddies, which means that he received a free beer on us on Joel and Matt. And he said, actually, I missed it because I assumed it was a late tip because bartending is his side hustle. So he's like, oh, I just did a wedding. And all of the tips always say beer because it's a Venmo tip.

[Joel]

And that's what we put when we send you money on Venmo.

[Matt]

Exactly.

[Joel]

For sharing our newsletter.

[Matt]

Exactly. So two things. Check out the how to Money Newsletter, how2money.com Newsletter and sign. And you share it with your friends or family members. You'll get special perks from Joel and.

[Joel]

I, but eventually you can win the coveted how to Money socks.

[Matt]

Yeah. You know, nobody has taken us up on the virtual hang.

[Joel]

Nobody shared the newsletter that many times.

[Matt]

Is it 50 or 40?

[Joel]

I know. I want to Say we dropped it.

[Matt]

Oh, did we? Because we're like, oh, man, nobody wants to talk with us.

[Joel]

If you share the newsletter enough, you get to spend quality virtual time with us.

[Matt]

Okay, here's my question for you. If you want were not interested in personal finance. I know it's impossible to imagine, but try to. If you were interested in personal finance, if you didn't have real estate on the side, what would your side hustle be? Because. And the reason I thought of this is because I pictured him standing there pouring up beer, serving glasses of wine, chatting with guests at the wedding. And I thought, man, that's what Joel needs to do. I feel like he would be so happy in that scenario. Just serving it up, chatting with folks, having a great time.

[Joel]

The hours of bartending are not conducive to my lifestyle.

[Matt]

The. That's the worst part.

[Joel]

But the actual job itself, I've never done it, but I've always been a. Cheers.

[Matt]

I feel like you would love it.

[Joel]

I've always wanted to. It's like just being Sam Malone at Cheers, slinging beers and talking to the crowd like that. That sounds pretty great to me. So I could be up for it, especially in a world where I didn't have, you know, a wife and three kids.

[Matt]

Yeah, I get it. I get it.

[Joel]

What about you?

[Matt]

It's also hard to remove that from the equation.

[Joel]

Yours would be a barista probably, right? Just handcrafting the coffee.

[Matt]

So I really do want to learn how to pull some really excellent shots as honestly as, like, training. Because at some point, I'm going to get my own espresso machine at home. I want to build out a little coffee bar, like a. Like a cocktail and coffee corner of our kitchen that's purely dedicated for that.

[Joel]

Espresso martinis nonstop.

[Matt]

Well, I know that that seems like the logical outflow of combining caffeine and cocktails, but I absolutely do not like espresso martinis.

[Joel]

Same.

[Matt]

They're terrible. Yeah, I mean, I don't know what it is about them that people are drawn to. I think it's just an end drink that we've folks have been experiencing over the past few years.

[Joel]

No doubt.

[Matt]

All right. That's all I got.

[Joel]

Okay.

[Matt]

You good?

[Joel]

Yeah.

[Matt]

All right.

[Joel]

All right, let's mention the beer we're having. This one's called White Ferrari. It's the Vale Brewing Company out of Virginia. We'll give our thoughts later. If you have a money question, go to howtomoney.com ask or just literally record your question on the voice memo app. Of your phone and email it over to us. Hopefully we can take it really soon on the show. Matt, let's kick this off. Let's take a question now from a listener who wants to know about taking a road trip. Should he rent a car or use the one he's got? And actually it's kind of a question aimed towards you as well.

[Justin]

Hey, Joel and Matt, this is Rob Levine in Ellicott City, Maryland. I know you both are big fans of driving high mileage paid off vehicles. I am right there with you, Matt. I know that you have a big summer road trip coming up and I'm curious whether you will take your high mileage vehicle on that trip or if you'll rent a car. I always struggle with the whole idea of how confident am I that the hauler can make it there and back with the family in tow. Appreciate your perspective and hope you have a great trip.

[Matt]

Rob is so polite. He calls it a high mileage vehicle as opposed to a clunker. Do you remember that, Rob? You make me feel good about my vehicle. It's just a high mileage. It's, he's, he's totally PC.

[Joel]

You remember during the Obama administration there was something called cash for clunkers, a government program where you could get paid.

[Matt]

That's right.

[Joel]

And like they didn't, I didn't realize.

[Matt]

That was a government program.

[Joel]

They didn't avoid the term. Yeah, yeah, it was.

[Matt]

Well, so that's because they're trying to encourage you to offload. It was all about the, the evil green transportation revolution, man.

[Joel]

That's right. I think, I love this question and it's something that I was curious to know because I didn't. Hadn't asked you this yet. I was like, are you going to take your, we haven't talked about it. Or are you going to rent one? Especially given the length of your road trip. And you know, when it comes down to it, Matt, we know that opting for a used car makes so much sense just from a financial perspective. But if you're scared that your used car, especially if it's getting really long in the tooth, is going to hold up on a longer drive. So, I mean, yeah, you are going on pretty extensive road trip. We're not talking about a couple hundred miles. We're talking about thousands of miles. So what are your thoughts?

[Matt]

I think that's, I mean, that's a large consideration as well. The fact that, I mean, like, we're looking at driving and we don't know our, our exact itinerary. Just yet. But we're at least going to be driving around 3,000 miles, if not more. This is over the course of a couple weeks. And so first of all, there's the depreciation. Right. There are estimates that cars depreciate at 20 cents a mile. I'm guessing that ours is probably less at this point. But if you run the math, we're talking about losing $600 at least in value on the car by putting it through its paces to this degree.

[Joel]

You say that yours would depreciate less and that's just because it's older. Because it's older, more depreciated. So if you're talking about a three year old used car, well one, you're probably not as worried about it breaking down on you or something like that. Exactly. But you're also going to trade offs. Yeah, depreciation will cost you more putting those miles on it.

[Matt]

And so I will say I just went ahead and sucked that out there. But I'm not really thinking about the depreciation all that much. This is our vehicle. We're necessarily look. And I guess another way to think about it too is just instead of thinking about it as depreciation, maybe I should be thinking about it as wear and tear on the vehicle. But even still, I'm not thinking about it through that lens as much. It's more about the peace of mind. That means a lot more on a road trip like this with a pretty tight itinerary. I mean, we've got stops in different cities. We don't want to roll in late. We want it to unfold, I guess, the way we want it to.

[Joel]

Especially for that private audience with the Pope that you've got coming up.

[Matt]

But the reason I mentioned this is because like, like Rob said, when you've got the family in tow, I don't mean there aren't a lot of things that are more stressful than having to make a major repair while on the road, while trying to travel and hit up multiple states, multiple cities, multiple sites, things that we have tickets to. Right. Like that's another thing. It's not like just checking in late. It's a matter of, oh man, are we going to miss our, our tour. You know, things like that.

[Joel]

Emily was taking the kids on a few hundred mile trip and I was going to catch up to him a few days later and the alternator went bust. And so that's always a possibility. Like you can never. And it's a possibility too with a rental car. You might say, hey, great this thing's two years old. It's got 20,000 miles on it.

[Matt]

But it's much less likely, I would say.

[Joel]

That's right.

[Matt]

Compared to like 150,000 mile.

[Joel]

You're playing the odds.

[Matt]

Long in the. Is there an equivalent to long in the tooth when it comes to vehicles like long in the odometer, long in the radiator, something like that. I don't know.

[Joel]

So I had to race down there and we, man, we got so lucky with being able to replace the alternator that day. Somewhere on a Saturday nonetheless, when a lot of shops are closed. But that's the kind of thing that, yeah, can throw a kink in into the plans. I was going to pick them up and bring them home and it was just going to be like trips off for the time being.

[Matt]

Massive hassle.

[Joel]

Yeah. I think you have to take those things into consideration. And if you're the kind of family that prioritizes high mileage, non clunker vehicles, Rob, those are the kind of questions you have to wrestle with. And I think, Matt, if you were to decide to take your own van, you'd probably want to have it at least looked over thoroughly before you went. Sure. The fresh oil change. Right. Checking the tires, fluid levels, spark plugs, all that kind of stuff would be wise. Same thing for you, Rob, if you're going to opt to go that route, just make sure your beautifully vintage vehicle is at least up to snuff from everything that you can ascertain. I think the nice thing about renting a car, especially when you're going on a really long road trip, is that you benefit from the. From the unlimited mileage that you're able to get through the rental car company. Right. So again, if you're driving a few hundred miles over the course of a few weeks, you get less benefit. Right. You're getting less bang for your buck and the risk is a whole lot less too. But since, Matt, you're driving at least 3,000 miles, you're probably going to do more than that. I think the price of the rental looks far more attractive because you're like beating the crap out of the rental car and not your own. You know, you just get every dollar you spend on it just matters more because of all the mileage you're avoiding putting on your vehicle. And so I'd be leaning in that direction, especially with the kind of travels you guys, you guys have planned and the time sensitive nature of not wanting to screw that up.

[Matt]

Yeah. One argument for folks taking their own car and this Isn't something that we especially feel. But I have, I have heard folks push back and say, well, I want to take my vehicle. Like, they have more. Like they're more car people. Is it because they have an emotional attachment to their car? That was one of my dad's arguments for. Because I was trying to talk him into getting an ev and he's like, well, I can't drive that out to the Midwest and visit family. I'm like, well, you just, you rent a car when you do that once or twice a year. He's like, I want to be able to take my car. And so that's a consideration that I know some folks have in their minds, but that in this case, this doesn't apply to us. I'm like, no, it's not about the vehicle that we're traveling as opposed to what we're doing as a family. But for some people, part of what they're doing as a family is the vehicle they're traveling in. I get that idea.

[Joel]

Especially when you have an older car that doesn't have some of the newfangled tech accessories. Renting the car might prove good in that capacity too.

[Matt]

I'm not even considered the entertainment system, which is what I assume you're referring to. Yeah, no, I think there's also this, like, there's a frugal versus cheap element to this question as well. Because if it was just me, let's say for some reason I was planning on doing this two week road trip. Yes. But I was maybe planning on doing it solo. Well, in that case, I would be much more willing to take a well maintained older vehicle that I already owned as opposed to straight up running one because, you know, getting stranded on the side of the interstate or even on some country back road where it's just me in my backpack, it's no big deal.

[Joel]

Sounds a little more fun and serendipitous when you're solo than. Than it does when, like, I would.

[Matt]

Even be willing to, like, consider hitchhiking, which I've never done before because I'm like, oh, kind of sounds like an adventure. But putting the family through an ordeal like that is not something that I would be interested in doing. Those are the kind of memories that I think. I don't know. They would certainly stick.

[Joel]

Yeah. Have I posted pics of our. My hitchhiking adventures before the chainsaw? Ye. From the old Bud Light commercials?

[Matt]

Yeah.

[Joel]

Good times. People are more reticent to pick you up when you're with shady characters like my friend Josh.

[Matt]

Indeed.

[Joel]

But, yeah, I think you're right. I mean, I think when one person is. And you can kind of roll with the punches, that's one thing. But, kids, it's not just the vehicle with the punches.

[Matt]

Yeah. It's the party. It's who you're rolling with as well. That is something you got to take into account.

[Joel]

I think it's similar, like, the idea of staying at a hostel. I'm awful. I don't care. It's fine. I'm in my 40s, and I'm still down with that. But my wife, not as much. And so, like, you have to kind of plan around everybody's goals and dreams.

[Matt]

I think I would be willing to stay. I could stay in a hostel, too, as long as I had a comfortable bed. I think for me, that's kind of what it comes down to. Now. I don't want to sleep on, like, someone's couch where it's slanted and angled. As long as it's quiet, there's a comfortable mattress, and I have control over the temperature. I think I would 100% be able to get a great night's sleep.

[Joel]

Yeah.

[Matt]

Side note, slight tangent.

[Joel]

Okay, so where you rent your car matters to Matt. So do you. Have you. Have you thought through that, like, where you're going to go to rent this car? For sure renting a car.

[Matt]

We are for sure renting, and I am. We've kind of dragged our feet because we haven't nailed down the itinerary yet. And so because of that, we don't exactly know whether we're coming back. Like, oh, are we going to be coming back on that Monday or that maybe that Tuesday or is it going to be more like that Wednesday or Thursday? I have looked around a little bit, though, and of course, looked over at Priceline.

[Joel]

So. So what are the. What are the rates?

[Matt]

It's roughly a thousand bucks.

[Joel]

Okay.

[Matt]

Basically a thousand bucks. Of all the different places I looked, except for the fact I will say so. Looking on Priceline in preparation for our trip, but also for Rob's question, I was really shocked to see this, what Priceline called an express deal, and it was substantially less. So all the other.

[Joel]

Better than Costco. Better than.

[Matt]

Yeah, Well, I know you like Costco, but substantially, I like Auto Slash, too, by the way. Oh, I haven't checked. I should definitely check out auto. Is it.com for all the folks out there?

[Joel]

Yeah. And it's because they will continually shop the price. Oh, that's right.

[Matt]

Yeah. Yeah. Okay. So I got. I got some homework to do. But here's the deal. The, the express deal specifically that I saw on Priceline was for a rental and they don't name it of course, but it is only if I were to go pick that up at the airport as opposed to a more convenient pickup. And when we're talking it's, it was over well over $300. It was pretty close to $500 in savings.

[Joel]

Oh wow.

[Matt]

Over the course of two weeks. So it was like $33 a day versus like 87 or something like that. That was something I was not expecting and I was almost going to pounce on it because I was like, well shoot, maybe this is some sort of lightning deal. Limited time only, but it's non refundable. So that was the main catch with this one. And so once we nail down the itinerary though, I'm going to hopefully see if that's still available because that's the kind of, those are the kind of hoops that I'm willing to jump through if we're looking at savings in that magnitude.

[Joel]

I'll drive you down there to pick it up. And so yeah, I think that's actually a really, that's a really good tip there too because if you, it's one thing to look at a bunch of different rental car companies, but it's another thing to look at different locations. And so let's say you live 25, 30, 50 minutes from an airport and you might be able to go save a bunch of money getting it at the airport location as opposed to the neighborhood location that's closest to you. That's, that's a hoop that's probably worth jumping through for a whole lot of people. That's big savings. So I think one, one last thing that's probably worth mentioning is when you rent a car, you might be, be able to prioritize fuel economy. So for, even, even if you're choosing a similar kind of make, right, like you have a minivan, I'm sure you're probably going to rent another minivan. You're not going to rent like a compact.

[Matt]

No, yeah, it's not going to work out very well.

[Joel]

But you might find that the rental car gets an extra 5, 6 miles to the gallon on the interstate. And when you're talking about driving the distances you are, that could probably save a decent chunk of change when you're filling up as well. So I would take all those things into consideration. But I think the biggest thing, kind of like you alluded to at the very beginning, is the peace of mind and being like, hey, we're going to be able to hit our spots. Acts of God, things always happen, right? There's no way to completely ensure that nothing goes wrong with even the rental vehicle. But I think for a lot of people, depending on the price, depending on all those different variables, it can make a lot of sense to rent the car on that road trip instead of using your own.

[Matt]

That's right, yeah. So, Rob, we wish you the best of travels if that's also something that you're planning to do. Joel, we've got more to get to, including a listener who has a question question about putting childcare on a credit card for the benefits. We'll get to that and more right after this.

[Joel]

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[Matt]

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[Joel]

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[Matt]

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[Joel]

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[Matt]

Nice.

[Joel]

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[Matt]

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[Joel]

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[Matt]

Yeah, when you're young and life is simple, getting a trust or will in place is not a high priority. But life gets more complicated. And when you start throwing kids into the mix, once you add an investment property or two, once that's a part of the equation, I know I've got the peace of mind knowing that I've got this checked off my to do list. And you can too. Because Trust and Will's website is easy to use, it's simple to navigate. Plus, all your information and documents are securely stored with bank level encryption. Each will or trust is state specific, it's legally valid, and it's customized to your needs.

[Joel]

Yeah, we can't control everything, but trust and will can help you take control of protecting your family's future. Trustandwill.com howtomoney and get 20% off. That's 20% [e-mail] howtomoney all right, we're back. Matt, we got more money questions. We got to get to listeners who just need to know things about finances. And we're here to help. This next question comes from a listener who just got married.

[Steve]

Hey guys, this is Justin from Kokomo, Indiana. I just got married six days ago and my wife and I are planning to combine our finances. I know this is a topic you've discussed in the past, but I can only find the content where you discuss the philosophy of combining finances, but not the strategy. What are your suggestions for going about creating a joint checking account, deciding how much of each paycheck should be put into that combined account? Should we keep our own separate accounts for personal spending money, that type of stuff. Additionally, I've been using YNAB for over five years and I love it. She is not interested in using ynab. So I'm just curious, from the budget app standpoint, what's the best way to view all of our information in the same spot where I don't have to put in her transactions for her? Any information you have would be greatly helpful. And if you're ever north of Kokomo, come check out the Coterie in Kokomo, Indiana. It is a cocktail bar, but we have a huge selection of craft beers and the best burgers in Indiana. Thanks so much.

[Matt]

Okay, two things. What is it called? The Coterie.

[Joel]

The Coterie.

[Matt]

The Coterie. And then also Kokomo. That sounds like a place that should be like in Hawaii or something.

[Joel]

There was this band that used to come to my elementary school and they would sing a song about Kokomo, but I don't think they were singing.

[Matt]

Were you talking about this, Coco? I don't think so.

[Joel]

I don't think so.

[Matt]

But thank you for that recommendation, Justin. Sounds like an awesome place. We're all about cocktails, burgers in addition to delicious craft beer.

[Joel]

Equal opportunity in Bybus.

[Matt]

Heck, yeah. But briefly, I will say so. I know this isn't Justin's question, but the philosophy is that by combining your finances helps you two to get on the same page. You're paddling together in the same direction. When you combine your finances and all the stats point to improved happiness levels, it points to the ability to move towards those mutual goals faster. But that being said, I think that's what that's all we'll say on the philosophical reasons why you should combine your money. Justin, however, is asking about the strategy. Joel, let's get to it.

[Joel]

Let's do it. Let's do it. So let's talk some logistics. And I do think that the simplest thing to do is to combine your accounts to have one account that rules them all, a la Lord of the Rings.

[Matt]

Yes.

[Joel]

Funnel everything, all of your income, all of your spending, through a single checking and savings account that has both of your names on it. It's quite possible to keep your individual accounts and to set up transfers to a shared main account. But I just don't think it's as effective. And I know some people, Matt, especially if it's like a second marriage, they. They're just a little more reticent to combine all the way, especially if they've been burned. So this isn't like a judgment or a, hey, you've got to do things exactly the way Matt and Joel tell you to do it or you're not doing it right. There are different ways to make this happen and to make it work for you. But I do think that the most effective way is to have everything go into an account and let that be the center. What you call, Matt, the Grand Central station of your finances. Right?

[Matt]

That's right.

[Joel]

And I just think that's a really effective way, both kind of mentally and financially to do things. And I think the other way I'd maybe encourage you to do that is to say that you just got married, right. Just a few days ago and you said some vows that were pretty significant. Right. I'm going to love you, sickness and health till the day I die. You're going to care for each other until the end of time. Right. So combining accounts, I think it's really interesting to me that some people buck that. They're like, I'm going to marry this person, but. And I want to say all these things when I marry them, but we're not going to combine accounts. And I just, I don't necessarily understand that way of thinking again, unless it's like this is my second or third marriage or something like that. But I would suggest either using one of your current bank accounts if you have a great online bank and adding the other as a co owner of that account or opening up a new account if your current banks suck, if you're with one of the giant banks that we talk trash about all the time, this is a great time to create a fresh start bank account where you get to go with one of the people that we say one of the institutions that is top notch and paying good rates and has better customer service and go with them instead of going with the bank you've been with.

[Matt]

Totally. All money going into that account, all money leaving that account. You've got like this United combined financial home base. I don't think you need individual accounts for spending money. Again, you can. But something as simple as each of you having your own credit card that feeds into YNAV for record keeping, I think that can work just fine.

[Joel]

There's less to keep track of. It's like, keep it simple. Yeah, I'VE got this credit card, you've got that credit card, but both of them go into ynab, so it's easy to keep track of everything.

[Matt]

Or, I mean, I think for a lot of folks, that's how they're able to have spending that the other one doesn't know about it, like when it comes to gifts, that kind of thing. But otherwise, I think even just having your own card and you just. I mean, you're using ynab, so you've got different financial goals that you've got set up in there. Two accounts is what some folks are going to advise, but we think it's unnecessary. I think it's potentially clunky. It also doesn't provide for that individual legal protection for those assets if the marriage were to dissolve. Like Joel said, for folks who have just more difficult backgrounds, some folks think.

[Joel]

That, hey, I've got this account that's all mine with my money in it. But in many states, that doesn't protect your money. That doesn't mean, oh, I've got this individual savings account with my name, and you have one with your name. It would be a prenup that would cover yours. Right. But in community property states in particular, that the money's still going to get divvied up.

[Matt]

50.

[Joel]

50.

[Matt]

And he mentioned too, that his wife doesn't. She's not into ynab. I think it's totally okay to divvy up responsibilities based on your. Your respective strengths and your interests. I think that you, Justin, you're maybe more of a nerd accountant, CPA type who likes to listen to personal finance podcasts. I get it. If you are in charge of tracking and spending and YNAB works best for you, I think that's great, utilize it. But I think you're the ability for y' all just to get on the same page. Like, she doesn't need to be sitting there right there next to you making the updates and providing her the feedback, or as you're talking about some of the different goals that you're both working towards that can be something that you predominantly focus on. Certainly keep her informed to the extent that she wants to be informed. But beyond that, I think there's plenty of other things in life that you should be focusing on as opposed to the numbers, by the way.

[Joel]

I think I just made, like, a legal comment and I just want people to know I'm not a lawyer and I don't know very much about that stuff, but I do know that you should look into the laws in your state to be aware of when you keep money separate. Like, are you actually protected in some way, form, or fashion by doing that? Because in many cases you're not.

[Matt]

That's true.

[Joel]

And you just talked about kind of the mutual involvement, Matt. And I think you and I would both say that both parties should be involved, Both should play a role and have a say in the finances. We want you to come to an agreement about goals and savings rates and even investment options to kind of. So that both of you at least have an idea. Maybe one of you is leading the charge on that, but you're having discussions about it openly together. Because then those shared goals are going to help determine just how hard you work towards each individual component of personal finances, like investing, saving, spending, giving. And then those goals are going to shift and morph over the years, causing you to rethink things, dialing back or increasing contributions amounts in given years. I think it's okay to have like an 80, 20 or even like a 9010 responsibility split where it's like, hey, I'm in charge here for the most part when it comes to finances because it's what I'm interested in and you trust me, and so I'm the YNAB guy and you don't care about that stuff. I think that's totally fine. And that's actually how a lot of relationships work. It's not a 50, 50 split. Similar how you might split up, like cooking duties, maybe. It's like, no, I'm the chef in this house. Right. And you do the dishes. And that's pretty common, pretty normal. It's 50. 50 split on cooking, I would say is more abnormal, but admirable, if that works for you. But I think 100 to 0, that's just not healthy. And that can lead to marital issues down the road, and that can lead one party to feeling like they're completely left out in the dark on all the financial decisions that get made. And so I think even if they.

[Matt]

Want to be left in the dark, it doesn't put that partner in a strong position, because then you need to be clued in at least a little bit, even if somebody like the other partner is pulling the majority of the weight.

[Joel]

Yep. I agree.

[Matt]

I'm thinking how, Justin, I'm picturing maybe something that is maybe a little more 90 10. And I want you, Justin, to find different ways to talk about some of the different savings goals, some of the shared life goals that you have with your wife in a way that gets her excited, because what I don't want you to do is say, hey, Matt and Joel said this. And if you are.

[Joel]

She's like, who are those guys?

[Matt]

I mean, if you are all about ynab, it means that you are into the numbers, which means you are going to be most likely incredibly successful in reaching some of your financial goals. It means you also know your savings rate. Don't tell your wife that. Like, don't, don't be like, oh, guess what? Our net worth just bumped up to. I'm guessing that's probably not something that she's going to be all that interested. Interested in. As opposed to, well, what does that mean for us being able to eat out? Like, does that mean that we can take like, is it our date nights back on the table? Because our savings rate hit X percentage. Does this mean that we'll be able to go visit my sister next summer even though she lives on the other side of the world, like find the things that she is interested in and help bring personal finances alive because of some of these things that you want to do in real life as opposed to just focusing on the numbers. I think that's really important too.

[Joel]

For the disinterested party, that's the best way to get them at least a little interested in what you guys are trying to accomplish together. Makes me think of a recent conversation you and I had about your workouts with Kate. Because you were like, oh man, I found this nerdy details about strength training for women. And you're like, but I'm not gonna tell her because she won't care.

[Matt]

And actually she doesn't care.

[Joel]

It'll probably make her hate it more.

[Matt]

Yeah, exactly. That's so true. And I was geeking out. Cause I'm like, oh, give me the data. It was something that we've talked to Michael Easter, friend of the show, but he's got a great fitness kind of newsletter, lifestyle sort of stuff. And he just was taking on women and muscle mass and longevity and cancer. Just all of these different things. And guess who wasn't gonna be interested in that at all? Yeah, my wife.

[Joel]

You wanna make her cringe and eye roll.

[Matt]

Share that with her instead. I was like, you know what I need to do is to continue doing the thing that we've been doing that she's been all about, which is us working out together, me providing her the instruction, commenting on her technique so that she doesn't get hurt. Like, these are the things that she cares about as opposed to the data.

[Joel]

Yeah.

[Matt]

The science. Yeah, she's not into that.

[Joel]

Not Everyone, not everyone cares at that level. And it makes me think too, it's important to have like regular check ins, especially in the beginning, put it on the calendar and make it fun. So like whether it's over your favorite craft beer before you watch a movie or something like that, let's do the 20 minute money check in. I think you might feel like those money dates are overkill because of how in sync you are with your finances. But she's going to need to be let in in some way and I think having those on the calendar will be a way to do that. Matt, you text Kate like that's the way you involve her in finances is like, hey, here's where things stand for this month. And so it's a monthly thing.

[Matt]

In a similar way, she's not going to log in or she's not open up the file and dive into Excel. But what she will do is look at her phone when I am sitting there on the computer and I send her an update on spending that much.

[Joel]

And you probably felt early on, well, we need to have more sit down meetings. But especially it's running on all cylinders at this point. You don't feel like a text message suffices at this point, but early on you might need a little more face to face and to allocate a little more time for it.

[Matt]

And of course once a year we'll have a big sit down where we are spending some time on it, diving into the numbers. But then, but yeah, beyond that it's just like, okay, let's just tie this to some of the different goals and priorities that we have.

[Joel]

Last thing I wanted to mention real quick is just to not forget to change the beneficiaries on your accounts because you might not need a will yet. Maybe that's coming down the pike, but make sure that you have. You've listed each other as beneficiaries in the back end of your retirement accounts. That just supersedes a will in most cases anyway. But that just makes sure that your money, if you were to pass, goes to your new spouse instead of going to whoever else you already had listed on your account. You've probably already done it, but just a reminder, it's really important thing to do. That's right, Joel.

[Matt]

Let's get to our next question from a listener who has a mortgage. He's not here to brag, but he has an enviable mortgage rate.

[Jessica]

Hi, Matt and Joel, this is Steve from Plainfield, Illinois. I was calling because I recently received a letter from my mortgage Company telling me that I have the option to cancel my escrow because my loan to value ratio has dropped below 65% and I've been making payments on time. I just didn't know if that was the right thing to do or not. I didn't even know that this was an option. Just give you some basics about my mortgage. I still owe about 115,000 with that sweet, sweet 2.75%. So that means that my escrow payments are actually slightly more than my principal and interest in each month in terms of what what is sent to escrow. I pay about 5400 in property taxes and about 1500 in insurance. It adds up to just under 7000 in escrow on a yearly basis. So I just didn't know if there was some, any upsides or downsides to canceling the escrow and just paying the insurance and property taxes myself. I figured I'm the type of person that would be able to plant that money into a high yield savings account and you know, just benefit from the interest. But I didn't know if there's anything I was overlooking. So I'd appreciate any insights you have. Thank you very much. Best listener out.

[Joel]

Man. Some listeners might be might have just heard that and said what makes you think you're the best Steve?

[Matt]

But well if he said Best Steve then he only limits offending all the Steve's.

[Joel]

That's right, that's right.

[Matt]

It's like Best Wayne but he might. Was that last week or a couple weeks ago? Best Wayne out.

[Joel]

It's not long ago Steve.

[Matt]

You should have gone with best Steve out.

[Joel]

That's right, that's right. But you might be the best listener Steve. But I think 2.75%. Yeah, a lot of people heard that especially in today's environment. They're like you lucky son of a gun.

[Matt]

Yeah, that's so good.

[Joel]

It really is sweet. Like give me that mortgage rate straight into the veins. Matthew. And congrats to Steve on being able to make substantially more in savings than you're paying towards your mortgage debt. That is just like a rarity upon rarities. Right. And we just, I think most at the time we didn't realize just how good we had it. Those sub 3% mortgage rates. Now we do and to be able to make more in just a straight up high yield savings account, it's crazy. It's incredible. To make a spread on money.

[Matt]

Yeah, that's nuts. But let's talk about ditching escrow because the argument for sticking with the escrow model is that it's easier from a budgeting perspective. Right. You know, your monthly payment amount, you pay it like clockwork. There's actual real benefit to that. Right? Like the fact that this is not something that takes up space in your brain. It's not on your mind. And that's because it's incumbent on your mortgage provider to pay the taxes and the insurance, because those bills tend to be pretty hefty. Some folks might find themselves in the position of not having the cash on hand when. When it's needed. And so having your mortgage to escrow, it essentially forces you to do the right thing without you having to think about it. It prevents you from getting too used to a smaller monthly payment that doesn't then reflect the real underlying costs. So first of all, you need to make sure that you're the kind of person who doesn't just see a smaller payment and it's just like, sweet, now I got more money to spend towards this. No, no, of course. You need to be organized about it. You need to be on top of it.

[Joel]

Make sure you're super sized.

[Matt]

Socking that money away.

[Joel]

My vacation budget, thanks to, you know, ditching escrow and then the tax bill comes around, you're like, oh, crap like that. That's a position you don't want to. Want to find yourself in. And with property tax and insurance bills going up, having an escrow account means you won't have to come up with the thousand dollars plus more than you thought you'd need in one fell swoop because those two bills came in much higher than you assumed, which is happening to a lot of people right now. Right. So if you're. If your tax bill from last year was 6,000 bucks and you're like, it's probably going to go up, maybe I'll just, like, save $7,000. Conservatively, I'd save eight. Right. Like, I would be. I would be a little more conservative just because I wouldn't want to screw that up and not have the cash on hand to pay that tax bill. That would be a tough situation to find myself in. And I would also note that while it might be a really good idea to ditch escrow, it's not going to be a massive money win. So this is kind of a. Yeah. Could it be better for you? It might be the best way to go. You'll be able to keep money which would have otherwise been held by your mortgage company in your savings. And yes, you're going to earn interest on that. But I think at the End of the day or at the end of a year, you might be talking about 100 bucks or so in savings. So while we'll dig in further, just know that this is more of a minor optimization question and we're fans of optimizing, but the stakes aren't gargantuan here.

[Matt]

Yeah, I guess it does depend on what you're paying, I guess. Steve said he's got maybe around $7,000 in total. Again, not that you have $7,000 that's earning that annualized 3.5% to 4% a year, but you're building that up. It's not as simple as running what the return would be on $7,000, $8,000 at the end of the year because it's something that you're building up towards. It's not quite that much, but it also does depend on how much your property taxes are and what you're paying on insurance. Because if you are in some communities where it's like, dude, you have no idea how much I pay in property taxes, I could see that being more of an argument to drop escrow and instead banking that money. Because if you were to do that, right, if you're thinking ahead, you are sticking that money in your savings account, you will earn interest on that money. And it might sound like we're not fans of ditching escrow. We're actually, I'm actually for it. And one of my favorite reasons is because if, like, you are a diligent saver, if you're a type A person, you've checked all the boxes and you are going to do this properly. But on top of that, it's going to make you more aware of how much you're paying for insurance and taxes, making it more likely that you're going to appeal your tax bill. It's going to make it more likely that you'll shop around with different insurance companies. It's going to make you more civically engaged in your city or your town or your state, whatever. If you are paying attention to these things as opposed to being like, oh, whatever, it just gets paid. I don't have to worry about it. No, no, you do have to worry about it. And when you're more directly connected, I think it makes you more responsive to some of the different fluctuations in prices.

[Joel]

There really is a price, most likely.

[Matt]

Not fluctuations, but just increasing prices.

[Joel]

Yeah. And there really is a price sensitivity when it comes to how you feel the pain that you feel because you're paying it out of your own checking account instead of paying it over 12 months through your escrow account, through your mortgage payment, that just feels like it's baked in. It makes me think of budget billing. That's the vibes I get when we talk about paying your mortgage through Esco.

[Matt]

You're insulated, man.

[Joel]

You are. And so you're just. You're less likely, like you said, to kind of challenge the property tax rate. The bill that you got, if it is abnormally high or something like that. And there are easy ways to do that, by the way, like at a site like ownwell. But yeah, I think similarly to that budget billing on your electric bill, you're less likely to change your thermostat because it's a straight up $185 payment every single month. But if in the summer you get a $320 bill from your electricity company, you're like, whoa, whoa, whoa, I need to, like, think about what I'm doing with the thermostat. Same is true, I think for property tax and for insurance, you're much more likely to shop around and save.

[Matt]

Yeah, totally agree. I will say one of the other benefits of paying your taxes and paying your insurance on your own is the fact that. But if you are totally on top of it, it's less likely for things to fall through the cracks. And that's something we've talked about on the show here before. But maybe it's time for. It's like, this is confession time now for Matt. Because when you're expecting your mortgage servicer to completely take care of it, that's not typically something you worry about, Joel, is it? Right? You're like, oh, I don't have to worry about that. Escrow's got it. And in the case of some of these mortgage servicers, when they are selling. So it's. The company that underwrote the mortgage typically doesn't always service the loan. Right. They end up selling it to one of these companies who trying to market you some other HELOC products. They've got a little bit of a slicker interface, more bells and whistles. To be able to offer you another.

[Joel]

Website, you have to come up with a username and password for and log into.

[Matt]

It's like, hey, by the way, we're transferring your mortgage over to this new servicer. Well, that happened to me. And something that happened, Joel, was that one of a tax bill, property tax bill for one of my properties, rental property did not get paid. And so you're thinking, okay, well, no big deal. I'm sure the mortgage Servicer was notified. They were not notified. And you would also say, well, I bet they sent you a notice. Well, yes, they did send me a notice, but they sent me one notice, one notice after we moved to the new place. And it happened to be earlier this year when we were in the middle of renovating our home, so our life was a little unorganized. I'll say. Like, let's just say bills and things arriving in the mail were getting buried under other things. And guess what? I had a property tax bill that was sent to a collections agency or collections purchased that from the city. And I couldn't believe it. I was like this. Well, first of all, I thought it was a scam, because I'm like, no, I don't have a lien on my house. No, indeed, I did have a lien on my house. And so this is just. This is when you don't want to be like, Matt, little warning out there. And of course, I immediately got it, made sure that it was legit, paid it off. But I ended up having to pay a couple hundred more because of interest accrued, but because they paid most of it, but not all of it. So it was the balance. But then also the collections company, they tacked a couple hundred bucks on there for. For their fee as well, because they're.

[Joel]

Doing good work out there.

[Matt]

Oh, my gosh. So super annoying. And I was so angry at the new mortgage servicer that completely fell through the cracks. Right. It's. And so the more folks who are involved, including a mortgage servicer, that doesn't necessarily mean that they can't make a mistake. I guess that's a good point is what I'm saying. So if I'm going to already keep up with it, I might be looking to drop. And this is something we've. I've harped on about before in the past, but I'm more likely now to drop escrow more than ever before.

[Joel]

Yeah.

[Matt]

That's all I'm saying.

[Joel]

So Steve, as an individual, could make a mistake, but so can the mortgage company. And it's important to recognize that and to stay on it. And so if you're at this point.

[Matt]

I'm more likely to trust myself than the mortgage company.

[Joel]

If you're going to be the cop.

[Matt]

On the beat anyway, even though I did make the mistake, might as well.

[Joel]

Do it yourself and take some of the other perks that come along with ditching escrow. Steve, if you find yourself in that camp and you're like, no, I got this, I won't Have a problem saving up the cash and paying those bills directly, then go for it. I don't see the downside. I think for some people who are perpetually disorganized. Matt, There you go.

[Matt]

Thanks for giving me an out.

[Joel]

That's not you. That's definitely not you. You were just disorganized for a short season. Thank you for the question, Steve. We got more to get to, Matt, including. What about paying for childcare with a credit card? We'll talk about that. Oh, and we have a new emergency fund number you should be shooting for. We'll talk about that too, right after this. It's an interesting time for business. Tariff and trade policies are dynamic, supply chains squeezed and cash flow tighter than ever. If your business can't adapt in real time, you're in a world of hurt. You need total visibility from global shipments to tariff impacts to real time cash flow. That's NetSuite by Oracle, your AI powered business management suite. Trusted by over 41,000 businesses, NetSuite is.

[Matt]

The number one cloud ERP for many reasons. It brings accounting, financial management, inventory, HR into one suite. You have one source of truth giving you the visibility and control you need to make quick decisions. With real time forecasting, you are peering into the future with actionable data. And with AI embedded throughout, you can automate a lot of those everyday tasks, letting your teams stay strategic. We're a super small operation with just the two of us, Joel. But if we were any bigger, NetSuite by Oracle is what we would use.

[Joel]

Yeah, if your revenues are at least in the seven figures. Download the free ebook Navigating Global Trade. Three insights for [e-mail] howtomoney that's netsuite.com howtomoney I still remember the birth of my first child. You never forget that day. But aside from the joy, it made me think long and hard about a slew of things, life insurance included. Matt. I'd never felt the need before, but I knew at that point in time it became a necessity for our family. And policy genius, of course, makes finding and buying life insurance simple. Ensuring that your loved ones have a financial safety net they can use to cover debts and routine expenses. 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.

[Matt]

Yeah, we talk about our wives and our kids here on the show all the time, Joel. You've got three. I've got four kids, that is. Well, if you are in a similar boat. Life insurance is crucial to take care of your family. If something happens to you, this isn't something that feels especially urgent. It's not a text message or a call from your boss that you've got to get back to. But it is vitally important. If your loved ones count on your income and life insurance, it's not a one size fits all product, and policy genius doesn't treat it like one. They lay out all of your options clearly your coverage, amounts, prices, terms. There is no guesswork, just clarity.

[Joel]

Secure your family's future with Policygenius. Head to Policygenius.com to compare free life insurance quotes from top companies and see how much you could save. That's policygenius.com when investing your money starts to feel like a second job, betterment steps in with a little work Life Balance. It's the automated investing and savings app that handles the work so you don't have to.

[Matt]

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[Joel]

So go ahead, take your time to rest and recharge. Because while your money doesn't need a work life balance, you do make your money hustle with Betterment. Get [e-mail] that's B E T T E R m e n t.com investing involves risk performance not guaranteed all right.

[Matt]

Buddy, we are back from the break. It is now time for the Facebook Question of the Week, which is from Jessica. And she wrote My Kids Daycare announced that they will now be offering two options for payment. Automatic withdrawal from a paycheck with no fees or by credit card with a 2.65% surcharge. Until now we paid with the credit card with no surcharge to help earn reward points. And honestly, it's our biggest single expense that we put on the credit card, so it gets us a good chunk of points every month. We have the Chase Sapphire Preferred, which for this payment is just one point per dollar. So if I pay right now, we pay $812 a month with a 2.65% charge. That is $21.50 a month more. Which sounds crazy, I know, but if it gets us more points, is it worth it? I'm leaning towards no, but I guess you could view it as a $21 vacation savings plan and if we use the points to the most effectiveness, it could be worth more. I don't know. Help me out, all you smart people. Also, we pay off our entire card balance every month. We have a fully funded emergency savings plan, we save for retirement, blah, blah, blah, all that. Joel, what you think? Yeah, what you think about. Well, specifically, what do you think about businesses starting to. They're passing the buck, you know, they're making us feel the pain that the credit card processors have been sticking them with.

[Joel]

I think it makes total and complete sense. Jessica's Daycare is not alone here because small businesses like that pay a lot to accept credit cards, while many find it worthwhile to accept credit cards despite the additional expense. They're saying, listen, if I don't accept credit cards, people won't patronize my business. It's a cost of doing business that I'm just going to eat. Well, other companies are saying, no, no, no, no. I mean, yes, I'll accept credit cards, but I need to pass that cost along. And consumers are getting more and more used to it. Individuals are like, alright, I guess the small business, if I really want to use the credit card, I'll pay the fee. And so those credit card exchange fees, I think they could be like the third highest line item for restaurants for instance, in particular. So a lot of small restaurants, like the credit card charges eat them alive. And if people paid in cash, they would be doing better. And I will say many businesses make more money by accepting credit cards because people tend to spend more. So that is part of the reason that they accept credit cards too. Yeah, it comes with a fee. But if means that people are actually going to spend more at my place of business, then hey, it makes sense. It's worth the trade off. But that's far less likely with a daycare in particular. Right? So I get that they're not willing to eat that cost anymore. They're trying to pass it on. But. But as the person with kids in that daycare, I get why it's a little bit annoying at least because you're like, man, this used to be this was my vacation savings plan that didn't cost me a dime and now it's going to cost me money.

[Matt]

The rules are changing. So from an ongoing standpoint, I would not be looking to pay for daycare with that credit card on a recurring regular basis. However, one exception to that would be if you've got a new card that's got a certain spend threshold. Right. So if you're trying to hit a spending threshold For a welcome offer. If you're looking at a certain number, a certain thousand dollars over the course of the first three months, that sort of thing, then that is 100% an instance where I would continue to pay the 2.65% because what you're receiving is in far excess of what it is that the daycare is then charging you.

[Joel]

So let's say the daycare was charging 1.8%. Well, I would keep using your credit card to pay it, no brainer because you can get a 2% cash back credit card pretty easily. And so I would like Citi Double Cash or the Fidelity card. And I, well, just use that card. And no matter what, you're always going to be coming out ahead, even if it's only slightly ahead. And so maybe just the ease of being able to pay with a credit card on top of that makes it worth it. Even though it makes sense, it's a negligible win. But if the cost of using the credit card outweighs the rewards using that credit card, then it just doesn't make sense.

[Matt]

And I think she's sort of calculating the fact that points that she would earn are going to be worth more because of the just what they're worth when it comes to redeeming those points.

[Joel]

Which is typically not true unless you're really, really good.

[Matt]

You've got to be on the game. Like, yeah, you've got to be completely on top of the points game. But even still, I think that the likelihood of you coming out ahead is slim compared to what the guaranteed rate that you're paying is.

[Joel]

Well, and on top of that, we talk regularly about the deflation of points and miles. And so you're like, you have an idea of how maybe skilled you're going to be to able to be in using those points. But if those points get deflated over while you're hanging onto them before you use them, then you might find that your calculations were off as well. One last ditch suggestion would be to use a different credit card that does offer more cash back. Bank of America's customized Cash card and Citi's Custom Cash, those are cards I.

[Matt]

Was going to mention you mentioned the Double Cash if it was 1.8%, but the Citi custom cash, you're looking at 5%, which is, that could offset. I mean it does offset. It just depends if you're willing to jump through the hoops.

[Joel]

Well, it could offset because there are limits. Right? Every single month. I do think the Custom cash has a $500 a month. Limit. The bank of America one has a $2,500 a quarter limit. For Jessica, that BoA customized cash might be the best because she might be able to put literally every single dollar.

[Matt]

The customized cash is that 3%. That's 3% because then you're looking at being capped at 500. I think the customized cash actually comes out ahead.

[Joel]

Okay, so run the numbers on both cards, I would say, because, yeah, one pays less percentage and has a higher cap and vice versa. But yeah. Is the juice worth the squeeze? It depends if you can out earn with rewards that you don't have to like jump through hoops to spend. And specifically if it's a cash back for spending in a particular category and this is your highest category, using that card for that purpose especially, I think it can make sense. But you just want to look into the details, look into the fine print, know which credit card is actually going to allow you to come out ahead because yeah, most of them will not.

[Matt]

Let's take another quick one from Myelin or Mayelan. She wrote. What is the new emergency fund number? I can't remember. And the Money Gear page on the website hasn't been updated yet. That's on us.

[Joel]

We're slackers.

[Matt]

But now I will say it is updated.

[Joel]

Updated.

[Matt]

Now it is updated. Yeah, you. 3045. That's the number. Used to be 2,467.

[Joel]

2467.

[Matt]

Now it's 3045.

[Joel]

That's because we adjusted it for inflation, because that number first came out in the year 2019. The reason for that was, well, economists said if you have $2,467 in the bank, you're going to be prepared enough for the vast majority of potential financial emergencies. That amount is of course not going to be enough for a prolonged job loss. But. But it's, it is going to be enough to handle most emergencies that come your way that you need money to.

[Matt]

Deal with unforeseen expenses.

[Joel]

Yeah. But we were like, it's 2025. How much do eggs cost versus in 2025 versus 2019.

[Matt]

We've experienced some serious inflation over the past six years.

[Joel]

Yeah. So we wanted to update that number. We did. And now it's officially updated on the website as well.

[Matt]

Heck yeah.

[Joel]

3045.

[Matt]

And I will say there's nothing like magical about that number. Like, yes, the economist did say that, oh, this is the amount. But like they're also. I mean, there's a range here. So there's not anything financially or like, from an accounting standpoint, that's super magic about that number. But I think the most of the power comes from it being a specific number. And for you to have a goal, something that you are shooting for. And like, literally, I want folks out there who are hearing this for the first time to set aside $3,045, not three grand. I don't want them to shoot for that.

[Joel]

The specificity of it matters.

[Matt]

That's what matters. Exactly. And knowing that you've got that set aside, I think that's. That's where most of the power comes from when it comes to that first money gear.

[Joel]

There used to be this church event, Matt, that started at, like, a specific time, and I can't even remember.

[Matt]

Oh, 722. Yeah. Oh, yeah, I remember that. And that, like, that's so funny.

[Joel]

Nobody forgot.

[Matt]

I thought it went to show up right years.

[Joel]

Yeah. And I think the same is true of this. Of this budgeting number, of this emergency fund number. It's like, wait, how much do I need again? Oh, you're not going to forget because it's not like roughly five grand or something like that.

[Matt]

It's.

[Joel]

It's a. It's a highly specific number. And I think that that stickiness, the way it bolts into our brains is really helpful because. And it just makes it more likely that we're going to achieve it because we have something highly specific to focus on instead of something more generic.

[Matt]

That's right. Let's quickly get to the beer that you and I enjoyed today, which was called a white Ferrari. This is a hazy double IPA by the Vale.

[Joel]

This is the only white Ferrari I.

[Matt]

Can afford out of Richmond, Virginia. What you think about this one?

[Joel]

People. People drive white Ferraris. I thought they only came in red.

[Matt]

I couldn't tell you.

[Joel]

I guess they come in black, too. White one, though. I'm sure they exist in white probably somewhere.

[Matt]

White feels more like Lamborghini to me than a Ferrari. Ferraris are red. Yeah.

[Joel]

Testarossa.

[Matt]

Isn't that literally translated as redhead, maybe? Italian, I think.

[Joel]

I don't know.

[Matt]

No, I regret saying that.

[Joel]

I don't know. But this beer was. Was fantastic. Was so good. It was. It was deep. It was velvety. It was slightly bitter on the back end, which you don't always get in kind of one of those hazy east coast styles. But, I mean, the veil just continues to crush on IPAs.

[Matt]

It was really good. It was also a bit dry. It wasn't like one of these tropical, fruity, juicy hazies. And so because of that the dryness made me think of. And now that I think about it, I think it's because the fact that it's called White Ferrari, but it reminded me of white pepper. You know, they've got all these different kinds of, like, fancy peppers and like, you crack it fresh or whatever, and pepper always has, like this. It's got like a dry kind of spice. I think of white pepper for some reason. I don't know why, but I feel like it has this dry, hoppy, even a little peppery action going on.

[Joel]

Yeah. I wish we got more of their beers because I feel like that's one of the. That's one of the better east coast breweries.

[Matt]

The veil.

[Joel]

Yeah. And I just want to try, like, all the beers they brew. So maybe one of these days.

[Matt]

One of these days we'll take a.

[Joel]

Road trip up the coast in a white Ferrari, go to the bail. What do you think? Maybe this is like one of the.

[Matt]

Things, you know, we were talking earlier about, like, different side hustles we have. I wonder if just like the days of visiting all the different breweries, is that just like in the rear view to continue the white Ferrari metaphor?

[Joel]

No, I don't think so.

[Matt]

I've not set out to go to a brewery for, like, specifically for that reason. But if there's. It comes down to what's close by, right? Like, if I'm with a family and if I can look something up and I'm like, all right, is this a decent brewery? Well, then we'll hit it up. Especially if they've got a cool outdoor space. I'm actually looking forward to that. We're talking about the road trip earlier in the episode. There's Drowned Lands is a brewery in New York that I came across their stuff because they had it at a local shop here in Marietta. But I literally put it on the. On the map. I green flagged it.

[Joel]

Love it.

[Matt]

Because I was just like, oh, that sounds like, cool. First of all, it's a cool sounding brewery. But then also they had a nice looking outdoor space for the kids to run around and be free.

[Joel]

That's huge for us at this point.

[Matt]

Yeah, man. You know, they want that full size Jenga set, a little bit of cornhole. I don't know what they do up there.

[Joel]

No doubt. You gotta. Yeah, sticks.

[Matt]

All sorts of fun.

[Joel]

They can get by on a lot of stuff. Kids are easy to please. All right, that's gonna do it for this episode. We'll link to some of the resources we mentioned in the show notes up on our [e-mail] that's right buddy.

[Matt]

So until next time, Best friends out. Best friends out.

[Joel]

Yeah. Have you.

[Matt]

Have you seen their stuff at Two Birds?

[Joel]

What did you call them?

[Myelan]

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[Matt]

Did it occur to you that he charmed you in any way?

[Joel]

Yes, it did.

[H]

But he was a charming man.

[Matt]

It looks like the ingredients of a really grand spy story. Because this ties together the Cold War with the new war. I often ask myself now, did I know the true Yan at all? Listen to Hot agent of chaos on the iHeartRadio app, Apple Podcasts or wherever you get your podcasts.

[H]

OpenAI is a financial abomination, a thing that should not be an aberration, a symbol of rot at the heart of Silicon Valley. And I'm gonna tell you why on my show Better Offline, the rudest show in the tech industry where we're breaking down why OpenAI, along with other AI companies are dead set on lying to your boss us that they can take your job. I'm also going to be talking with the greatest minds in the industry about all the other ways the rich and powerful are ruining the computer. Listen to Better offline on the iHeartRadio app Apple Podcasts. Wherever you happen to get your podcasts.

[Rob]

This is an iHeart podcast.