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

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."

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]

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]

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]

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]

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]

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]

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."

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

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.