Ask HTM – Sinking Fund or Pet Insurance, Balance Transfer Card Bonus, & Backfilling an HSA #1144

Summary

How to Money Podcast Episode #1144

Ask HTM – Sinking Fund or Pet Insurance, Balance Transfer Card Bonus, & Backfilling an HSA

Date: May 25, 2026
Hosts: Joel and Matt
Podcast Description: How to Money delivers actionable, jargon-free money guidance for regular people. In this episode, the hosts tackle listener questions on pet insurance versus a sinking fund, the nuances of balance transfer credit cards, creative and flexible approaches to saving for college, and advanced HSA strategies.

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Episode Overview

This “Ask HTM” installment is all about listener questions. Joel and Matt deliver insights on:

• Whether pet insurance is worth it, or if a self-funded sinking fund makes more sense
• How to optimize for your child’s college savings (Roth IRA vs. 529 plan)
• The details and best practices around using an HSA for long-term financial benefit
• Practical tips for teens and parents handling cashless spending at events
• Navigating balance transfer credit cards without hurting your financial standing

The tone, as always, is personal, friendly, and focused on practical money advice—peppered with banter and a dash of beer talk.

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Key Topics & Insights

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1. Money Conversations with Kids & Family Values (03:00–07:00)

• Normalizing Money Talk: Matt shares a story about discussing car values with his children, making money and cost conversations a regular, low-pressure part of family life.
  • “We’re talking about these things to encourage folks to have these same conversations about earning, spending, saving, investing...” —Matt (04:34)
• Talking Income with Kids: Joel’s household focuses on the curiosity kids have about jobs and income comparisons, highlighting the importance (and sometimes awkwardness) of financial transparency at home.

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2. Listener Q1: Pet Insurance vs. Sinking Fund (10:11–20:29)

Question from Emily (10:44): Is it smarter to keep paying $75/month for pet insurance, or save that amount in a dedicated sinking fund for upcoming vet bills for her aging dog?

Main Points:

• Emotional vs. Financial Decision: People often buy pet insurance out of love, not math. Joel cautions: “Let the numbers influence this decision—not emotion.” (12:03)
• Assess the Policy Carefully: Matt and Joel stress the importance of knowing exactly what’s covered (surgery, meds, wellness visits, annual caps, pre-existing condition exclusions).
  • “Not all pet insurance is created equal. You might find that the $75 you’re paying... offers most of the needs... or it may not.” —Matt (13:12)
• Fine Print & Frustrations: Many owners complain about complicated claims and partial reimbursements, which degrades the policy’s value.
  • “Many folks only get a partial reimbursement... which just makes it worth a whole lot less money.” —Matt (17:07)
• Cost-Benefit Analysis: Over time, most people spend more on premiums than the insurance pays out. Self-insuring (aka, earmarking savings) usually wins out.
• Exception: If an unexpected vet bill would force a crisis or tough decision, insurance can make sense until savings are more solid.

Notable Quotes:

• “We’ve all become pretty insurance happy in 2026. You can buy insurance for almost anything… but you really don’t need insurance for electronics. Pet insurance can be more beneficial, but still rarely the smartest financial move for the average person.” —Joel (15:23)
• “When you dig deeper, you find that a lot of pet owners spend more in total by having pet insurance than by going without it.” —Joel (19:03)

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3. Listener Q2: College Savings – Roth IRA vs. 529 Plan (22:50–35:29)

Question from Brandon (22:50): For his son’s future college expenses, has been contributing $500/month to a Roth IRA instead of a 529. Should he keep doing this, or switch to a 529?

Main Points:

• Clarification: The Roth IRA must be in a parent’s name—a six-year-old can’t contribute without earned income (24:14).
• Accidental Genius: Using a Roth for college by withdrawing contributions (not earnings) is flexible, but not the highest/best use of a Roth since retirement should come first.
  • “Instead of shooting yourself in the foot, you’ve, like, propped it up and given it a massage.” —Joel (25:37)
• Order of Operations: HTM’s “Money Gears” recommends prioritizing your own retirement (Roth IRA) before saving for your child’s college (29:19).
• Why 529 Still Matters: Even if you wait, open one now to start the “clock ticking”—future tax-advantaged rollovers to Roth are possible, and state tax breaks can be valuable (29:42, 31:09).
• Flexibility Is Critical: 529s are only for education, while Roths can be used for anything in retirement. College may not be your child’s best or only option in the changing education/job landscape (34:42).

Notable Quotes:

• “Saving for your child’s education is a good and noble thing, but it’s not the most important thing. The most important thing is to save and invest for your own retirement.” —Joel (28:20)
• “In retirement, there are no scholarships, but for your kid’s education, there often are a lot of ways to save.” —Joel (32:48)

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4. Listener Q3: HSA Backfilling, Receipts, and Portability (35:40–44:36)

Question from Mauricio (35:40): Multiple questions regarding maximizing HSA use—backfilling, tracking expenses, withdrawal timelines, and rules for portability after leaving a job.

Main Points:

• Backfilling is Allowed: As long as the HSA existed at the time of the qualifying expense, you can reimburse yourself later. Money doesn’t need to be in the HSA before the expense, but the account must have been open (38:12).
• Track Receipts Digitally: Save digital (not paper) receipts alongside a detailed spreadsheet or doc: date, procedure, amount, proof of payment, and withdrawal records (39:49, 41:04).
• No Withdrawal Deadline: There’s no time limit for reimbursement—letting money grow (and compound tax-free) is optimal (41:27).
• Portability: The HSA is yours even after leaving a job. You can continue to contribute if you qualify, and you can transfer it to lower-fee providers like Lively or Fidelity (42:42, 44:04).
• Difference from FSA: Unlike FSAs, HSAs are not "use it or lose it." They can grow indefinitely, making them the best tax-advantaged account available.

Notable Quotes:

• “Treat [your HSA] like a long-term investment account for your future if you’re able, because years down the road you can reimburse yourself for medical expenses you incurred in the far past.” —Joel (44:36)
• “Is there anything else... any other way to basically skirt taxes on your income? Only money that you stick into an HSA. That’s the only way I know to basically skip out on Uncle Sam completely.” —Joel (45:40)

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5. Facebook Question: Teen Spending at Cashless Events (47:51–51:57)

Question from Katie (47:51): Options for her 14-year-old to spend at a cash-free event—besides preloaded Visa gift cards.

Main Points:

• Visa Gift Cards = Bad Deal: High upfront and inactivity fees make these a poor option (48:35).
• Authorized User: Adding your teen as an authorized user to your credit card is good for building their credit history—plus they get a real card in their own name (49:35).
• Teen/Youth Debit Accounts: Long-term, open a youth account (e.g., Fidelity Youth, Capital One Teen). Allows kids to spend their own money, and parents to transfer allowance or settle up easily (50:36).
• Building Smart Habits: Using real money, rather than "dad’s card," helps teens build responsibility and real-world financial literacy.

Memorable Moment:
“They call them teen accounts but you can actually sign your kids up earlier without a problem... My 10-year-old and 12-year-old have them, so they can use a debit card when they’re on the go.” —Joel (51:03)

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6. Listener Q4: Balance Transfer Credit Cards & Rewards (52:48–57:57)

Question from Sergio (52:48): Are there balance transfer cards with good rewards? How to handle transferring and closing them after debt is paid?

Main Points:

• Rewards Aren’t the Point: Focus on paying debt interest-free, not maximizing points. Balance-transfer cards rarely offer significant rewards (53:10).
• Understand Fees: Watch for transfer fees (3–5% is standard)—longer 0% periods often come with higher fees (54:21).
• Don’t Cancel Upon Payoff: Leave the card open, unless it has an annual fee. Closing it can harm your credit score (55:07).
• Different Cards for Different Jobs: Use the right tool (card) for the right purpose—debt pay-off first, then open a new, better-rewards card once you’re debt-free (56:00).
• Bonus Tip: Build an emergency fund after paying off debt to avoid new credit card balances (57:48).

Notable Quotes:

• “The goal here is to avoid interest, not to score travel points.” —Joel (54:33)
• “Use [the card] for the task you have at hand... like the right knife for the job.” —Matt (57:48)

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Memorable Quotes & Moments

• On Pet Insurance:
  “A lot of people opt to get pet insurance because of emotional reasons... but it’s also, I think, better to let the numbers influence this decision, not the emotion.” —Joel (12:03)

• On HSAs:
  “Treat these if you can... as a long-term investment account for your future. For the time being, let the market help you grow a tax-exempt pile of money, because this is like truly... the only way I know to basically skip out on Uncle Sam completely.” —Joel (44:36)

• On College Savings:
  “Saving for your child’s education is a good and noble thing, but it’s not the most important thing... In retirement, there are no scholarships, but for your kid’s education, there often are.” —Joel (28:20, 32:48)

• On Debt Tools:
  “Use [a balance transfer card] for the task that you have at hand... Different knives for different jobs, and in a similar way, that’s how I think you should maybe be thinking about this credit card.” —Matt (57:48)

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Timestamps

| Topic | Start | End | |-------|-------|-----| | Money Conversations with Kids | 03:00 | 07:00 | | Q1: Pet Insurance vs. Sinking Fund | 10:44 | 20:29 | | Q2: Roth IRA vs. 529 for College | 22:50 | 35:29 | | Q3: HSA Backfilling, Receipts, Portability | 35:40 | 44:36 | | Facebook Q: Teens, Cards, Spending | 47:51 | 51:57 | | Q4: Balance Transfer Cards | 52:48 | 57:57 |

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Additional Resources

• How to Money Money Gears: howtomoney.com/start-here
• Consumer Reports Pet Insurance Ratings: Consumer Reports
• Recommended HSA Providers: Lively, Fidelity
• Fidelity Youth Account: Fidelity Youth
• Capital One Teen Accounts: Capital One

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Summary by: How to Money Podcast Summarizer – providing the meat (and the chopped brisket) of each episode so you can take action faster, and with confidence.

Transcript

[Matt]

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[Joel]

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[Matt]

I'm Matt.

[Joel]

Today we're answering your listener questions.

[Matt]

I'm so excited to hear directly from listeners today. Joel, this is our Ask how to Money episode. You know that a lot of listeners know that. What they don't know is that we're gonna take a question today about pet insurance, which everyone knows what your answer is gonna be. It's just gonna be just. You just take some dirt and rub some dirt into it and that's gonna make. That's why I tell my kids everything better. Yeah. Yeah, that'll be a quick one.

[Joel]

Are you bleeding profusely? Put dirt on it.

[Matt]

That's actually. That's not gonna be the answer.

[Joel]

Of course.

[Matt]

We're gonna talk about 0% balance transfer cards in order to pay down some debt. Another listener is making sure that the HSA is as good as he thinks it is. He wants to make sure he wants to dot his I's, cross his T's before he starts investing a whole lot of money into that. And by the way.

[Joel]

Which makes sense. I mean, some of these.

[Matt]

We're having a nuanced conversation about the pet thing. I just did that because we tend to receive hate mail when we give pet advice.

[Joel]

Well, I have two pets, and I'll just give a little foreshadowing. I don't have any insurance on those pets. They're cats.

[Matt]

You said that you have.

[Joel]

Except for the dogs.

[Matt]

I didn't think that you actually claimed them.

[Joel]

Yeah, they're not. They're technically my daughters. And she's the one who.

[Matt]

You allow them to squat in charge.

[Joel]

Okay.

[Matt]

But does that mean she changes, like, the litter.

[Joel]

My wife, though, like, they burrow into her when she's sleeping. It's. It's incredible.

[Matt]

She's kind. They're a good judge of character. I think those cats, every once in

[Joel]

a while they'll pop up and, like, give me a love, but they know that it's just not my.

[Matt]

They're like, oh, yeah, he did something good today. I'm willing to.

[Joel]

I'm a big fan.

[Matt]

Show him some affection.

[Joel]

Human love. You know this. I like hugs, but animal love, not as much.

[Matt]

Not so much.

[Joel]

Yeah.

[Matt]

I wanted to share a quick story. I was driving around yesterday with the kids, and I wanted to see if this is something that you do, basically. But we were driving around, the kids were with me, and we got to having a conversation about the cost of cars. Like, our oldest daughter in particular. I was like, how much does that car cost? And so it's actually kind of a fun game. So we're driving around, and she points to, like, a new Lexus GX or something like that. She's like, how much does that cost? I'm like, oh, like $70,000 probably. At least.

[Joel]

Yeah, that's the base model.

[Matt]

She points to, like, a van, sort of like ours. I'm like, that one actually looks new. A little bit newer than ours. I'm going to say 15,000. Like 15k maybe. For that guy. There's. And then there's like, an old Dodge Neon that drives by. She's like, what about that one? I was like, honestly, maybe a thousand bucks.

[Joel]

Like, this thing bumper falling off.

[Matt]

It had. It wasn't in terrible shape, but it was just. You could just tell it was old. I mean, I'm guessing this was like an early 2000s Dodge Neon. And it just really surprised me. She's like, no way. And she's like, I could. She's like, I've got enough money to buy that car. I'm like, yeah. And it Was just what it reminded me of was that, well, first of all, the fact that we're talking about this, we're normalizing conversations about what things cost.

[Joel]

Right.

[Matt]

As we approach purchases that we make, we with value in mind, and that's the goal of ours here on the show, is like, we're talking about these things to make it just more familiar, to encourage folks to have these same conversations about earning, spending, saving, investing, and also in a similar way, to be able to have those conversations with, not only with you, our listeners, but with our kids too. It's just a good way for us to talk about it in a non loaded kind of tense way. A non tense way. I'm sorry is what I'm saying. Just to talk about the cost of things and set expectations, perhaps.

[Joel]

It's funny, on the other side of the equation, my kids have been asking me a lot of questions about how much people make for doing certain jobs. So they're asking more questions about earning. And they're like, so we're big fans of Billy Strings, the bluegrass musician in our house. And they're like, does Billy strings make more playing one show than you make an entire year? And I'm like, yeah, quite possibly.

[Matt]

Probably.

[Joel]

He's playing for like 10,000 fans, so maybe he does. And then they're like, okay, the school superintendent, who makes more, you or him? And I'm like, all right, well, that's

[Matt]

public data, actually, we can look that up right there.

[Joel]

So they're just asking questions about different jobs and how much people make for doing their jobs.

[Matt]

That's funny.

[Joel]

And it's just. So it's just kind of fun to talk to. Well, actually, like seven or eight years ago, Billy probably wasn't making much money, but now he's crushing it because he's attracted such a wide fan base.

[Matt]

But it's interesting because sometimes also one in a million. So don't think you're gonna go out there and take the sell out of

[Joel]

superstar musical artist route. Yeah, but it is.

[Matt]

It's worth considering.

[Joel]

It's interesting that they're like. Then they're picking out people close around, like, okay, what about that person? Do you make more than that guy than that? My friend's dad.

[Matt]

That's funny. So y' all play that same game. But as far who's earning more when it comes to personal, sometimes it gets

[Joel]

a little awkward, to be honest, Because

[Matt]

I'm like, oh, I just say enough. Because they always want to know, like, how much money do we have? Are we rich? And I'm like, no, but we have enough. And until they're mature enough to sort of have a. I don't know, just a healthier conversation. Because, I mean, those are the younger ones asking that. And I know that whatever I say, they're just going to go back to their friends and say, blah, blah, blah,

[Joel]

blah, My dad makes two mil. Yeah, we're rich.

[Matt]

As opposed to, like, even my seventh grader. We could have a good conversation. That's not. She's a little more.

[Joel]

She can handle a little more.

[Matt]

She can. She certainly can handle it. But she's also savvy enough to know that I can't ask that outright. She's waiting for the right opportunity, I think, to maybe have a conversation about it, but I don't think, you know, they know that they are well provided for and we take care of them and we're going to do our best to raise them right. And a lot of times that has nothing to do with money, even though that's what we talk about here on the podcast.

[Joel]

True story. Should we mention the beer? We're having this episode? This is Grapefruit Substance by Bissell Brothers Brewing and just. Man, One of my favorite breweries. So, Bissell, excited to try this one with you, my friend.

[Matt]

What is the. I can't even. I can't believe. I can't. I'm not even. I'm blanking on the name. It was a west. West coast brewery and they had Sculpin.

[Joel]

Oh, great. Fruit Sculpin.

[Matt]

And they had a grapefruit version. It was Grapefruit Sculpin.

[Joel]

And it was good back in the day.

[Matt]

What were they called?

[Joel]

I think they went bust.

[Matt]

Did they?

[Joel]

Oh, maybe I want to say West Point.

[Matt]

It was not West.

[Joel]

What was it called? They were big, too.

[Matt]

Oh, my gosh. I'm totally. Yeah. I'm realizing I haven't seen them in a long time. I bet you're right. I wonder. Belly up.

[Joel]

And speaking of sculping, I remember the story of that brewery type of fish, even though I don't imagine it.

[Matt]

That's all.

[Joel]

I can't remember the name of it, but I think they. They were bought by a big.

[Matt]

I'm gonna look it up.

[Joel]

Giant conglomerate. And then eventually, I mean, just as trying to take over market share, they. In various, you know, around the whole country.

[Matt]

Ballast Point.

[Joel]

Ballast Point.

[Matt]

That's right.

[Joel]

Well, you were close and I.

[Matt]

What did I say? East Point. I said West Point. I was like, that's not it. Yeah.

[Joel]

So I think they got bought by someone big and Then they just, like,

[Matt]

just grew too big too quick, as acquisitions often go.

[Joel]

Yeah.

[Matt]

They don't stick around and don't. May not necessarily continue making a superior product. Oh, man, there's another.

[Joel]

But when that beer first hit, it was great.

[Matt]

Oh, well, that's because it was early on. Look at us with all this beer, talking history on the front end. Let's save it for the back end.

[Joel]

All right.

[Matt]

I will share how listeners can leave, how they can send us a voice memo. Right. You pull out your phone, you get a voice memo. You record your voice memo, preferably like 90 seconds or less. State your name, your question, email it over to us. Hopefully we will take it on an upcoming episode of the podcast.

[Joel]

We would love to. And we'd love to hear from you.

[Matt]

And then all your friends and family will be able to hear your voice.

[Joel]

That's right. That's right.

[Matt]

I mean, I don't know.

[Joel]

It's your claim to fame.

[Matt]

I think people think it's cool. Yeah, I'm so. I'm very used to it. I feel like you're probably even more used to it than I am having been on radio way back in the day.

[Joel]

Maybe. I don't know, like, not even special

[Matt]

at all for you to hear your voice. I do remember hearing my voice for the first time.

[Joel]

I get more nervous speaking in front of, like, real life crowds of people than I did like this.

[Matt]

That's nerve.

[Joel]

Right? To me is just talking to you, other people listening in.

[Matt]

So this is normal. Yeah. Although the fact that, you know, they're not listening right now live, I'm sure that takes a little bit of. Because there is a difference.

[Joel]

That's true.

[Matt]

You used to. You've done live stuff before, live hits, which actually I. It feels different than what we do right here.

[Joel]

So that doesn't make me nervous either, though.

[Matt]

The live hits. Yeah. But there's a different kind of energy that it brings to the conversation. Whereas this. If I put my foot in my mouth, I know I can go back and totally sniff that out.

[Joel]

We can edit. You can't edit the live stuff. Let's get to our first question. Matt, this one is specifically about pet insurance, whether or not it's a smart buy.

[Emily]

Hey, guys, this is Emily calling from Wilmington, Delaware. First of all, just wanted to thank you so much for all of your knowledge over the years. I'm here in my late 20s, and I just feel so many miles ahead of a lot of my friends and colleagues and. And I've been able to pass along the good word of your podcast and share it with them. And they have thanked me as well for that. So just want to pass along that. Thanks. My question today is in regard to pet insurance and if we think it's worth it or if a sinking fund would be better. For context, I have a 10 year old, pretty large dog. He's about 100 pounds, he's a mutt mix and he's relatively healthy. But I just know that there are going to be some expenses coming up, potentially ACL in the next few years, of course, end of life expenses, all of that. I've had pet insurance since I adopted him five years ago, and it runs me about $75 a month. But putting in and filing claims is pretty complicated and it doesn't seem super straightforward. So I'm wondering if you guys think it would be more worthwhile for me to just throw that money into a sinking fund instead. Let me know your thoughts. Thank you so much.

[Matt]

All right, so the first thing that we've got to mention is that when Emily sent us her voice memo from Delaware, she also included some adorable, adorable pictures of her pooch.

[Joel]

She actual dog initially didn't attach the voice memo and only sent over the pictures of her dog.

[Matt]

Very indicative of where her heart and head is.

[Joel]

I was like, love the pics. I think you forgot to attach something. But her dog's name is Scotch and he's adorable.

[Matt]

Super cute.

[Joel]

Yeah.

[Matt]

You know she sent those in order to sway us, right?

[Joel]

Yeah. Do you think so?

[Matt]

Yes. She's like, here is the handsome good boy in questions. You know, like, it's like a picture of her dog. How could you say no to ensuring this. This cute face. Look at that good boy.

[Joel]

Well, that I think that actually gets at part of the answer to this question that a lot of people opt to get pet insurance because of emotional reasons. It's like, I love my good boy. Like, he's. He brings me so much happiness. Like, I love taking him for walks at night, going to the dog park, all that stuff. Thank you. And pets are awesome. It makes sense that you want to insure something that you love. Like, when you view them as part of your family, you're more inclined to spend excessively. Right. In order to make sure they're okay. It's kind of like that, that I think some people take the thought process of, like, if you didn't share your kid, you should insure your dog too. And I understand, I understand that line of thinking. But it's also, I think, better to let the numbers influence this decision. Not the emotion.

[Matt]

Yep.

[Joel]

Because you can still take care of your dog without having the insurance. It's. It really does come down to the numbers as to whether or not it's. Insurance trumps a seeking fund.

[Matt]

So can you take care of your kids without insuring them? Because a hair. Okay, I got a surprise. Frugal or cheap for you. And this isn't me.

[Joel]

Okay.

[Matt]

A friend of ours. This is someone you know. They don't have their kids on their insurance.

[Joel]

Wow, that's risky. It is highly risky.

[Matt]

Yeah. So what do you think? Frugal or cheap? So no health insurance. No Medicare either. It's. I was like, wait, what? They're like, yeah, it's really. It's really expensive. And that's very.

[Joel]

I mean, you really. That's incredibly risky.

[Matt]

Because I would not advise that.

[Joel]

The things that can go wrong for a child are very different than what could go wrong with a dog. And typically, if your child is fighting some sort of cancer diagnosis, you're relying on that insurance because there's just. It's expensive otherwise.

[Matt]

Even, like a surprise, like, what's. What's it when your appendix gets.

[Joel]

Oh, yeah, appendicitis or appendicitis.

[Matt]

Like, even something like that. You're talking like tens of thousands of dollars. Maybe we will.

[Joel]

Too risky.

[Matt]

Too risky. It's the number one. And this is what I said. I was like, you know, medical bills like this, were you to incur something, would be. That is the number one reason that families file for bankruptcy. And I think they heard me. But maybe we will hear from listeners, perhaps, and I will be able to share some stories with them because I didn't want to lay into them. And of course, I'm not going to call them out here on the pod, but to be able to have ongoing conversations about that I think are healthy. We're trying to be analytical in how we approach things in a similar way. Emily, we want you to do that when it comes to the insurance that you are considering there for Scotch, because. Yeah, you're debating between, like, paying for the insurance versus a sinking fund. And I think that should come down to the math. Right. The coverage that you get for what it is that you're paying, because not all pet insurance is created equal. And so the first thing to know is what your policy actually covers. It's going to vary quite widely. And you might find that the $75 that you're paying every month that it offers most of the needs that Scotch is likely going to have or it may not. Right. So some Policies are going to cover surgery and meds, while others are going to just focus on general wellness visits. And it's obviously it's going to be more affordable that type of insurance. But, but perhaps for you in the situation you find yourself in, it's going to be less helpful if that were to be the case. So there are also other stipulations about coverage of preexisting conditions. So you're finding some of that language from human healthcare space finding its way over into animals as well. Or there might be issues that might arise within the first year of the policy. We just want you to know the details. And I wouldn't just expect any old insurance policy to cover scotch in all the ways that you're hoping that it might.

[Joel]

Yeah, you're like, the fine print matters because yeah, lots of times if you break get a new pet insurance policy that first year, they're like, well, we're not covering this, this, this or this. If it comes up and you're still on the hook for that even though you're like, but I bought the insurance, man. And the insurance just is like, well, but that could have been something that was kind of happening already and we're just not going to cover until we're at least a full year into covering

[Matt]

your dog exclusion periods.

[Joel]

Yeah. And so it's, and it's not just the cost of the insurance that you have to consider like the deductible, the copay, annual caps on coverage. That's another thing, Matt. Some of those policies come with a $2,500 annual cap on coverage. You might be saying, okay, I'm really buying this policy for worst case scenario possibilities. But man, it's not going to really help me out in case of a worst case scenario. In case of a $10,000 bill, it's only covering $2,500 then that doesn't really feel like it's as substantial as I thought it was. When it comes down to the reality is we've all become pretty insurance happy in 2026. And you can buy insurance for almost anything, right? Your new computer, your smartwatch, but you really don't need insurance for electronics. Almost never, I'd say. And we'd say that's less true for pet insurance because it can be more beneficial and the financial stakes are higher. I think it can make sense. A big surgery or an overnight stay could set you back a significant, a significant amount of money. And then the pet insurance policy kicks in and you're like, glad I was paying that $75 a month because it saved me a $3,000 headache. But it's also important to note that $75 a month isn't chump change and that premium is going to go up over time. It feels easier to stomach than a one time massive bill. It makes it easier to plan. But I would say this at the end of the day, it's rarely the smartest financial move for the average person. And saving up more to pay for vet bills out of pocket makes more financial sense for most folks most of the time.

[Matt]

Yep.

[Joel]

That's not like a slam dunk one way or the other. But that's just kind of the general read that I get looking at the pet insurance marketplace, how much it costs and what it provides.

[Matt]

Yeah, Emily, you also mentioned how frustrating it can be to file a claim and get reimbursed. So you've had a little, little bit of experience here. So I don't know, that hassle factor gets factored into the equation as well. This is a regular feature in the pet insurance space that frustrates a whole lot of pet owners. Many folks only get a partial reimbursement from the insurance company after the fact, which just makes it worth a whole lot less money. It degrades the value of the policy essentially. And so if you are banking on full reimbursement, well be prepared that you, you may not get, you know, the, a check cut for the full amount. You might receive less than the full out of pocket costs that you've incurred. That being said, I still understand that you might opt for insurance. And if you are, well, gosh, I was going to recommend for you to check out the ratings over at Consumer Reports, but see how your policy that you already have, that you've been paying, it sounds like you've been paying into that for maybe about five years. See how that stacks up against some of the other highly rated policies over at Consumer Reports. But then what you can also do is, and granted you're looking ahead and you know that you've got more medical expenses coming up, but like just do the math as well and just say, oh wow, 75amonth times 12 times 5. What is that? I mean that's thousands of dollars. Yeah, obviously past performance doesn't indicate, is not indicative of future results sort of thing, but I think that might be a helpful way for you to hey, do I have the discipline to self pay? Do I have the discipline to set that, set those dollars aside and save up, you know, a boosted emergency fund essentially? I think that could provide you with maybe some empowerment to take that path.

[Joel]

When you look at the Consumer Reports ratings, Matt, like almost none of the insurance companies get rave reviews like most people or at least across the board. When you're taking those ratings into consideration, it's like middling to subpar is how people feel, tend to feel about pet insurance companies. It's not as bad I was going to compare it to like home warranties, but those are actually much worse.

[Matt]

Those are a lot worse.

[Joel]

Those are a lot worse than the pet insurance. But there is that sort of kind of vibe that you get sometimes with some of the pet insurance policies, at least some of the worst ones. And when you dig deeper, you find that a lot of pet owners spend more in total by having pet insurance than by going without it. And so when it comes down to the math, yeah, that sort of self insuring, while it might not work in your favor every year, over time it typically will. And so we typically lean towards self insuring. In this case we also typically push out of money listeners to boost savings and self insure far more than the average American does. So this is often the case with other types of insurance as well. Raising your deductibles on your car insurance or your home insurance and having more socked away in savings so that you can self insure, make those minor repairs on your own. But I will say this too. If money is tight and you'd be forced to make a tough decision about the health of your dog or the health of your personal finances, if it's coming down to that, pet insurance could make sense for you at least for the time being until you're able to save up enough money to be in a strong financial position and then where you'd essentially worry less about forking it over in an emergency where you're like 3,000 bucks. Yeah, not fun to fork it over, but I can afford that without worrying or fretting because most of the time you're going to come out ahead financially if you take that tactic instead of going for the insurance.

[Matt]

That's right, buddy. And we've got more to get to. We're going to talk about a 14 year old and her sister spending over the summer. Another listener is kicking butt with his finances. We'll get to that more right after this. For business owners and entrepreneurs, there is a constant challenge getting things done fast or done well. Why not have both? That's why Wix Harmony stands out. It is an AI website builder that helps to create a website quickly without compromising your vision. A fully functional site can be built for any business just by describing the idea. Then you can choose to chat with AI or edit everything manually to get it exactly right.

[Joel]

There's also Aria, an AI agent available to answer questions or help complete tasks. And here's what makes it even better. Aria doesn't just live in a chat box. You can click anywhere on your site and ask her to make changes instantly. It's these details that make creating with WIX Harmony feel seamless.

[Matt]

That's right, Join millions of businesses already using Wix and try Wix Harmony for free at wix.com harmony that's wix.com harmony

[Joel]

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[Matt]

spontaneously doing something extra for a loved one? Use Empower and get good at money so you can be a little bad. Join their 20 million customers [e-mail] not an empower client, paid or sponsored. Is it just me or is it getting really hard to figure out the best way to save for retirement? Well, Fidelity can help you to find clarity so you can save the best way for you. With a free personalized plan, goal tracking and timely insights, you'll be set to take on retirement your way.

[Joel]

Get [e-mail] future expenses charged by your investments and other costs and fees associated with trading or transacting in your account. Apply Fidelity Brokerage Services member NYSE SIPC all right, we're back. Time to get to more of your questions. Matt, let's get to one specifically about saving for college and if an anti 529 approach is actually the best way to proceed.

[Brandon]

Hey Matt and Joel, this is Brandon from South Alabama. Just got a quick question about college savings and whether we're on the right track or not. Our son's about to turn six and since he was born we've been contributing $500 a month to a Roth IRA that we're designating specifically for his college expenses. We haven't set up a 529 plan yet, but mainly that was out of ignorance. I was unaware of what was available and how they worked, seeing that it's post tax money and our contributions can be withdrawn penalty free. And then the five year rule for the earnings on a Roth ira. Is this still the best plan, or should we Open up a 529 from this point forward and contribute that money into the 529 plan? Appreciate you guys.

[Matt]

Brandon, thank you so much for sending us your voice memo. And before we talk about anything, I think it's worth highlighting that he mentioned that they have been contributing to a Roth or a Roth ira. Right. He didn't say that it was specifically his son's Roth. He says that he.

[Joel]

Well, his son is six, he said. So it's highly unlikely that it's his son.

[Matt]

I know. I'm just making it clear for all the folks out there that you can't contribute to a Roth. Of course, without earned income, I don't

[Joel]

know what the child labor laws are like in South Alabama.

[Matt]

Well, I also don't. It just. It kind of depends, too, on the difference.

[Joel]

Pretty sure those days they're federal, so.

[Matt]

They're federal, but not. I'm not sure how tight all the brokerages, how tight the process is when it comes to kids opening up and having those conversations with their customers. That's all. So he's talking about what we're gonna assume is a Roth IRA that he's opening up, most likely in his name. Yes, is what I'm guessing.

[Joel]

And then he's essentially planning on taking out contributions that he's made down the road from his Roth IRA to use to pay for higher education expenses for his son. But he's IRA probably 12 years.

[Matt]

Exactly. Yeah.

[Joel]

Yeah.

[Matt]

So that's what we're getting at here. So that's the assumption. Cause I didn't want folks to think that, like, wait a minute. You can't. You're not even allowed to do that at all. Yeah, that's not what we're assuming is going on.

[Joel]

Well, and he's been putting 500 bucks a month in, which is $6,000 a year, which means he's getting close to maxing out the Roth ira. That likely his. Right. And. Which is awesome. And so, you know, while Brandon mentioned that he was doing this, like, prioritizing the Roth ahead of the 529 out of ignorance, this might be something that he's accidentally done in his own favor. Instead of shooting yourself in the foot, you've, like, propped it up and giving it a massage.

[Matt]

A manual pedicure.

[Joel]

Yeah, yeah, exactly. Like, this was actually probably the better thing to do.

[Matt]

Like, have you ever gotten a pedicure, by the way?

[Joel]

I think I've gotten one manicure, but never a pedicure.

[Matt]

I Don't. I've never.

[Joel]

I think I want anyone touching my toes.

[Matt]

Matt, I don't think I would mind. I just have never had a manicure, a mani or a petty. Okay. I mean, nothing against it.

[Joel]

Let's go together, buddy.

[Matt]

I would much rather go and get a massage personally. Sure. Oh, yeah.

[Joel]

Oh, yeah.

[Matt]

Last massage you and I got while we were in the Dominican Republic and we went off the resort down the beach away, it was like $22 and is.

[Joel]

You're right there.

[Matt]

Beachside. How many years ago?

[Joel]

The best part about that is that the place we went, it's called JCPenney number two. Like a department store.

[Matt]

What happened to JCPenney one?

[Joel]

Who knows? I don't know, but so good.

[Matt]

Okay, sorry.

[Joel]

Okay, so this Roth IRA I think is actually like smart, right? It's so good that Brandon opened the Roth IRA and didn't go straight to the 529. And yeah, you could eventually pull out some of those Roth IRA contributions to pay for your son's higher education expenses. But also at the same time that would interrupt tax free growth and compounding in one of our favorite accounts that he can be using for his own retirement. So I don't know, I feel like there's a lot to discuss here.

[Matt]

Yeah, yeah. I mean, we love the Roth because of the flexibility, but the highest and best use is for your own retirement there, Brandon. So to use it in this way is a suboptimal move, essentially. And I will say, yes, you are avoiding the penalty, but you would still owe income tax on the earnings specifically. So obviously any of the contributions you make, you can pull those out for whatever reason you want. But there is a part of me that's just like, as I'm doing the math, I'm like, man, we're talking about if he started that when his son was born, and we're talking about doing that for 18 years. We're talking over $100,000 just in contributions, which there is no penalty, no tax at all associated with were you to use that for higher education. That's only looking at the actual contributions. But that being said, it's still not what we would recommend because that's not the intended use of the actual Roth ira. Even though there's oftentimes that we use accounts not for their intended purposes, but in the ways that allow us to take advantage of the tax law to the, to the highest extent. But I'm kind of all over the place right now. But the biggest reason, Brandon, that we don't want you Necessarily, to use the contributions even that you've made to your Roth for your son's college is because, I mean, oftentimes this is a loftier goal. This is something that you want to get to eventually down the road. And as opposed to it being sort of a top foremost priority, which is what it sound like you've made it.

[Joel]

Right?

[Matt]

Exactly.

[Joel]

Like this is kind of the heart of it, is that saving for your child's education is a good and noble thing, but it's not the most important thing. The most important thing is to save and invest for your own retirement. And then once you've got that buttoned up, then you can kind of turn your eyes towards investing for the next generation, if you're so inclined. And that's why we put that mat in money gear number seven. Right. It's something that once you've kind of hit those other. And so, Brandon, if you haven't seen Those, go to howtomoney.com, click the start here button. You'll see the money gears all laid out and you kind of see the order of operations for what to do with your money. Because if you can do both, that's great, right? Prioritize the Roth for yourself first. Funnel leftover money towards the 529 after that. But if not, ultimately we just want you to continue to prioritize the Roth but to think of it as your account for yourself. And maybe that sounds selfish, but it's really because you have time later to focus on your child's education and saving up for that. Saving for your six year old is a great goal to have, but putting it in proper order, I think is paramount to making the right move here. If you kind of get those goals out of whack, you might save up a substantial amount for your son's education, maybe even more than you need and have not enough for yourself and for your own retirement needs.

[Matt]

That's right, yeah. That being said, open a 529 though, and contribute just a little bit.

[Joel]

Yes, yes.

[Matt]

Because that will get the clock ticking when it comes to your ability to funnel those dollars that are in the 529 into a Roth IRA down the road, were you to say, or were he to not want to necessarily use those funds to go to college, to use that for higher ed. So essentially there's an aging process that takes place. And so even just, I mean, so literally gotta keep the clock ticking. Yeah. And when this law passed, and this is, gosh, maybe four years ago, three years ago, I even opened a 529. I mean, I don't even know if this is warranted, but I just thought, you know what? Five bucks, Open one for Kate, open one for myself. In order for us to have maximum flexibility to be able to, oh, maybe at some point we'll want to like supercharge our Roth IRA saving. I just wanted to have options essentially. And so I just, the way I saw it, I'm like, all right, it's a $5 admission in order to have a 529 account down the road that I'm going to be able to potentially do more things with.

[Joel]

Well, maybe you'll go back to school and become a philosopher or something like that. What do you think?

[Matt]

And you've also got that as an option too.

[Joel]

Yeah. Ye.

[Matt]

Asking the bigger questions in life. Although now that I think about it, why that that also doesn't make sense because your 529 to Roth IRA conversion money isn't in addition to the current year's Roth IRA cap. Yeah. So I don't know. That's just something I did.

[Joel]

Yeah.

[Matt]

Well, I mean, I regret bringing it up, but in your case, Brandon, I think it's. I think it's wise for you to go ahead and get that account. Get the clock.

[Joel]

Get it on my boy 100%. Yeah. Because even just a small amount put in, if you're not prioritizing that, which you shouldn't, Getting it started matters to get the.

[Matt]

But then later you can ramp it up, you know, like down the road you can juice some of those contributions to. For college.

[Joel]

And I think it's worth mentioning that down the road, when he does prioritize, let's say he's maxing out his Roth, he's doing great saving for his own retirement. And then he's like, now I'm turning my eyesights towards saving for my son's future education. Well, you will get a state tax break for contributions that you make to that account which can add up. So know that. Right. I think it's. I forget if it's. I think it's $10,000 a year that you put into a 529 account in the state of Alabama. You can essentially save state tax on that amount. But again, it's wise to think of the Roth money you're accruing as money you'll need and use in retirement. And we're just. It's also important to note, Matt, that like in retirement there are no scholarships, but for your kids education, there often are a lot of ways to save, you can choose a less expensive school, you can choose to stay in state. There are plentiful scholarships and financial aid. There are just so many ways to make that happen, to pull that off and not spend too much money that I think that's another reason that saving for retirement is so much more important than saving for a college education. Just because of the number of levers you can pull when you're talking about paying for a degree versus the levers that you have to pull or are mostly based on your own decades of saving and investing for your own future inside of these tax advantage accounts.

[Matt]

That's right, yeah. And I like what you said too about like earlier, you mentioned how he may have even kind of like done himself a favor. Like I, because you're talking about all the different ways that you can pay for college, but there's also the option that your son may not get go to college, right? Like there's the option. Like I was talking to a friend recently and his daughter, his daughter is a rising senior and she's got a couple friends that aren't actually coming back for their senior year. They're instead they're going to get their GED and take some more tech focused classes and essentially start their careers, which is incredibly ambitious. But there are, I guess you know that that also costs money. But I guess if you think about the more traditional, oh, I'm going to go off to a four year state school, you're going to spend a whole lot of money, your son might graduate as a senior and say, well I've got no idea what I want to do and it doesn't seem wise to spend a whole lot of money on college. Maybe I just take a year, maybe I take a gap year. I've saved up some money working my part time job, maybe I'll travel a little bit. What do y' all think about that? You know, these are conversations you can have with your, with your son. Or maybe he just, he doesn't want to travel, he just wants to hang out at home a little bit and he's like, all right, I'm going to get a job, going to think about things, think about life for a year or maybe even going into something more local, just the skilled trades, more blue collar work. There are lots of other options than just an expensive four year degree path, which is what we hope, right? And again it's a noble thing but there are lots of different options out there for him as opposed to when you are older and you want some income, there's Only one option for you, which is you gotta work. And so the older you get, the more. Not precarious, but the less certain that that is as an option for you where you might even be forced into a retirement situation. So to be able to draw on some investments that you made at a young age is pretty vital as opposed to the countless options that might be available to your son.

[Joel]

I think what you're also hinting at at least, Matt, is that we're entering an era where people are going to question more and more the value of a college degree, 100%, the cost, and the time right when, especially in the age of AI, like, what is the degree that I'm going to get that's going to pay off? There are more questions now than ever before about what direction to go in, what to study in order to ensure that it pays off for your career and for your future. And so it's a tougher time to be entering into college. And I'm like, we don't know what's going to happen over the next 10 years while his son is maturing.

[Matt]

I guarantee a lot's going to happen, though.

[Joel]

Exactly.

[Matt]

We don't know exactly when it's.

[Joel]

How many it's going to be. But do you want to put in that basket? You know, probably think more about your own basket and a little bit less about his, and then you can, you can pivot later.

[Matt]

Exactly. All right, Joel, we got more to get to. Let's hear from another listener who is making sure, or at least wanting to make sure that he's checking all the boxes when it comes to an hsa.

[Mauricio]

Hi, Matt and Joel. This is Mauricio from Houston. I wanted to first thank you for all the content that you create. You've allowed me to reach Money Gear 7, which has been incredibly valuable for me today. I wanted to ask you a question about the HSA account, one of your favorite accounts. I'm considering setting up different budget categories. One to track the amount in my accounts as of a certain point in time, and another to budget and track for expenses linked to my HSA account. This will allow me to withdraw funds when necessary. However, I would like to ask a question or a couple of questions. Do I need to have money in my HSA before incurring an expense from other accounts? For instance, if we're facing $1,500 dental bill soon, does that amount need to be pre funded in my hsa or can I backfill the HSA dollars later? Regarding receipts, do I need to keep physical or electronic receipts or procedures? Is there a specific tracking required outside of YNAB or Excel? Is there a time limit on when I must withdraw money from HSA account? And finally, if I leave my current job, does the HSA remain open with funds continuing to be invested? Or do I need to withdraw all the HSA money so that would mean that I can no longer contribute to it? Thanks again for all your insights. Best friends out.

[Joel]

Matt, first thing we have to address on this question, we did not allow Mauricio to reach MoneyGear 7 well, speak for yourself. He did it.

[Matt]

He asked me to take credit.

[Joel]

You're going to take credit.

[Matt]

Well, I gave him permission.

[Joel]

Mauricio, you can.

[Matt]

Just kidding.

[Joel]

Of course you can.

[Matt]

Way to go Mauricio. So totally rocking it.

[Joel]

Yeah, very proud of you. Exactly. Like glad we could provide a little bit of help, a little bit of knowledge, but you had to apply it. You did the hard work, so well done. And Matt, there were a lot of HSA related questions in here. We'll do our best to get to all of them. Yeah, I don't think we've talked about HSAs in a while, so maybe we should quickly start off by talking about how much we love the hsa. When you use this account properly, we'll link to a detailed article in the show Notes. But like the truth is if you can find enough margin to pay for current health expenses with cash you have on hand and you can invest essentially money that you stick into your hsa, you'll be able to grow a big pile of tax exempt money for future use down the road. It is one of the most undersung accounts from a long term financial planning perspective. Most people just don't use it that way and they don't have the margin to be able to use it that way.

[Matt]

That's right. Yeah. Mauricio is in like Money Gear 7 Plus by maxing out his, or not even maxing out, but just his ability to also contribute to an HSA in addition to some of those other financial goals and dreams that he's looking to achieve. But Mauricio, the first part of your question had to do with whether or not you could essentially backfill that account. And yes, basically you can reimburse yourself down the line. So let's say you had a surgery at the end of May, but you didn't put money into your HSA until the next month. Well, you can still, you know, June, July, August, whenever, you can still use that medical expense to pull the funds out. So the only Exception is that if you hadn't actually opened the account to begin with by the time you had that procedure. Right. So you need to make sure you have the HSA open, but those funds don't necessarily have to be in there. So as long as the account is established, it's not going to be a problem. You are able to backfill it, but still, this isn't something that you want to do because it minimizes, of course, the effectiveness of those dollars. Yes, you are getting a quick tax break, but the real value does come from not touching those dollars and allowing it to just grow in your HSA for years or even decades. But I'm hoping that maybe he's thinking, well, I had the account open, I didn't start investing aggressively. I just want to be able to record that medical expense that I incurred earlier in the year. I want to be able to add that to my list of expenses that I will be able to in the future, draw from. Hopefully, that's how Mauricio is thinking about it.

[Joel]

Let's talk about tracking receipts for a bit, Matt. And because that is something that we get a lot of questions about on the HSA front, the truth is, digital is fine. You don't need to have a bunch of physical paper receipts that you keep in some sort of filing cabinet in your home office or anything like that. You do need the digital receipt in the potential event of an IRS audit. And really to help you know how much money you have in qualified medical expenses to make withdrawals, those qualified medical expenses are what is crucial to allow you to tap that money and retain the tax benefit. So taking a picture of your bill is wise. Then after that, you can create a simple spreadsheet or even just a Google document. You can include the date, the procedure, and the bill amount. Those are the three main things I would want to keep track of.

[Matt]

Crucial pieces of information that, and also proof that you paid that bill. So you want to record the details from the bill, but then also proof that you paid it just to say that, like, hey, look, this isn't something because you are reimbursing yourself. And so you need to show that, like, yes, I myself am the one who paid it, as opposed to insurance or some other party perhaps. So maybe that that can mean like a checking statement or even a credit card statement that that actual bill amounts can be recorded on.

[Joel]

And then the other thing you want to keep track of is when you make withdrawals, like how much did you take out? When did you do that? Keep a record of that too, because that ensures that you're not taking money out that you've, let's say, already reimbursed yourself for double dipping. Right. And so there's just, there's no need to track it in Monarch Ynab or anything like that. I think a simple doc is just fine. Um, but those are kind of the elements you want to be tracking.

[Matt]

Yeah. And then he asked about if there's some sort of timeline or you know, like a set amount of time that he had to take advantage of the hsa. No, there is no time limit on when you need to withdraw those funds. You could let this thing totally continue to compound and grow in its magical way until you're 92 years old if you wanted to, which would be an extreme example.

[Joel]

Baller, baller move.

[Matt]

But just think about how much money you would have on hand at that point. And actually, in addition to that, speaking of timing, once you reach age 65, your HSA effectively becomes more flexible and functions similarly to a traditional ira. So that just means you don't, you know, you don't have to have health expenses on hand to be able to take money out at that point, but it's not as tax advantaged. So you would owe tax on those non medical withdrawals. So just keep that in mind. But generally speaking, it's another sweet perk of one of our, I would say, no, our absolute favorite tax advantage account because of how many times you're able

[Joel]

to avoid Uncle Sam, which is so interesting. We love it so much, Matt. Yet you and I have neither, neither of us have ever had access to. Because when you're with fake insurance like

[Matt]

you and I are, it's the forbidden fruit. I want what I can't have, Joel.

[Joel]

Oh, it's so attractive. And yet we can't participate. The other question that Mauricio asked was about portability. What happens to the HSA when you leave your job? Well, if or when you leave your job, the HSA goes with you. This is your account. This is not your employer's account. Even if your employer kind of partnered and offering it to you, it's yours. It is, it is. And you can and should leave it invested if you leave your employer because you can, you know, still use it and tap it for health care expenses moving forward. You can even continue to make contributions to that account if you have a high deductible health care plan elsewhere. Let's say you buy a plan, you purchase your own plan off the healthcare exchange [e-mail] or something like that you can still utilize that same HSA and stick your own money into it if you want to fund it that way. You might not want to. By the way, if your new employer offers an hsa, let's say because of payroll tax deductions, you might want to use the plan that you have offered through your new employer. And you can also, and this is really important, choose to move that HSA that you had to a low cost provider. Two of our favorites are lively infidelity. So I would do that asap. If you leave an employer, that's because you'll save a bunch of money in fees. You'll have better low cost fund choices if you go in that direction as well. But just know that that HSA is yours, it moves with you, it is yours, and you can take it elsewhere.

[Matt]

Yeah, you know, I think one of the points of confusion is the fact that the HSA is very similar to an fsa, the flexible spending account, as opposed to the Health Savings account and as opposed to the hsa, which is yours, and you can do what you want with it when you leave your employer. That's not the case with the fsa, right, where it's the ultimate use it or lose it account. And so, yeah, HSA is so much better than an FSA when it comes to the flexibility and the ability for this thing to perpetuate itself and to last for a really long time, which

[Joel]

only highlights the complexity of the system, the silliness of the nuance of the rules. The fact that we have two different accounts that you can save for healthcare expenses in one which is like this year, use it or lose it, and the other one, which is like, no, let it ride for decades. It's just confusing to a lot of people. So that's why we're probably taking questions like this on the reg is because individuals around the country, Matt, continue to have questions about these accounts because they are a little bit confusing. And so, yeah, treat these if you can. Anybody out there who's listening, Mauricio included. If you have an hsa, treat it like a long term investment account for your future if you're able, because years down the road you can reimburse yourself for medical expenses you incurred in like the far past. For the time being though, let the market help you grow a tax exempt pile of money because this is like truly. Is there anything else, Matt, that you know of any other account, any other way to basically skirt taxes on your income? Only the money that you stick into an hsa, that's the Only that's the only way I know to basically skip out on Uncle Sam completely. That's what makes it so great. Okay, we got more of your questions to get to. We're going to talk about balance transfer, credit cards and more right after this.

[Matt]

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[Joel]

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[Joel]

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[Matt]

all right buddy, we are back from the break. It is now time for the Facebook Question of the week, which is from Katie who writes, My 14 year old will be attending a youth rally at a college campus this summer. A credit card is on the packing list for snacks and merchandise because the college is cash free. So besides preloading a Visa gift card Are there any other solutions for this? I know there are many ongoing credit card access solutions, but curious if there's one or curious if there's any for a one time access sort of situation. Thank you. This totally reminds me of, was it a couple weeks ago? I think on the ask I talked about my daughter going to a volleyball game and we ran into a similar situation. But yeah. What do you think? What you got for Katie?

[Joel]

Well, first off, she mentioned the Visa gift card. I really don't like those, Matt, because of the fees that come attached to that. Okay. So like typically there's like a, there's like a $6 fee when you buy like $100 Visa gift card straight off the top, they're, they're soaking you with 6% and then there's sometimes like inactivity fees with some of those cards. So preloaded Visa I would say is not a great option. If it's like the only thing you can find, then I guess you could use it. Right. But even still it, in my mind it sucks. And so I guess you could make your 14 year old an authorized user on one of your cards. That's what I did. Yeah, that's what you did. And, and I think that's probably ultimately the best, the best case, the best case scenario, the best way to proceed. Right. Because it would help her build solid credit for the future and it would give basically a piece of plastic with her name on it attached to Katie's account. And so, yeah, you can give her the card when you want, you can take it back when you don't want her to have access to it because, yeah, the money's coming out of your account. So you're going to have to find a way to settle up with her in the future if you actually want her to pay for it.

[Matt]

Exactly. And that's that. When I, when we talked about this with my daughter, that was the one sticking point that's just like, okay, there's this additional step and we have to kind of, okay, you spent this, now you have to actually pay it with your real dollars. And I don't know, kind of going through all of that and you're talking, Katie, about this happening this summer. So I feel like you've got some time to set up something potentially more permanent, like a more long term solution I think might be warranted. You mentioned your daughter's 14, which means that you are going to encounter more situations like this where she's spending money away from you more frequently. And so I think getting her a teen Account, helping her to learn. Right. Your ability to teach her how to use it. This is gonna kind of beef up her personal finance skills while she's there under your roof, which is awesome. So we've talked at length before about the Fidelity Youth account. And then when it comes to Capital One teen accounts. Yeah, I was gonna say because the Capital One credit card is what I use, but I know you've actually got a teenage account.

[Joel]

I use the teen accounts because I forget exactly what age you can sign your kids up at. But my 10 year old and 12 year old have them, so they call them teen accounts. But you can actually sign your kids up earlier without a problem and that's been great. And because I have a Capital One account, then I can feed money. Like I can pay their allowance that way or if they do extra chores, like, it's really easy to transfer money back and forth. Plus they have a debit card they can use when they're on the go by themselves, which is cool.

[Matt]

And they've got their actual money in those accounts, right?

[Joel]

They've got their actual money in the account.

[Matt]

Yeah. So when it. So yeah, so you are paying, you're able to easily transfer money over if they are getting paid for something, but when they are spending money, they are spending their real money. And so I think there's something.

[Joel]

Or if they leave their card at home and I pay for it, then I can just quickly, boom, hop on the app and transfer it out.

[Matt]

Yeah, but I like that sort of long term, permanent solution of them spending money that's actually theirs. Because even though it's plastic, there's still something. I don't know. There's another mental barrier when you're spending on a credit card or a daddy's card. Yeah, I think so. Or it's just like, oh, it's got my name on it. But this is a credit card. Daddy told me that this is the bank's money, you know, and that they're loaning it to me. And eventually, yeah, I do have to pay it back. But I think, yeah, anytime you can associate the money that you're spending and the action that you're taking with the dollars that are in fact yours and that those are your dollars that are leaving your account. I think that that could be better. Yeah.

[Joel]

And I agree, by the way, at 14, I think you're looking for a bigger solution. An account to solve this problem and not just a quick fix. A quick fix which the authorized user can. Could be. You might want to do both. Right. Because the Authorized user could solve a quick pinch problem, but also help with building credit. But then on top of that, I think finding a youth account is ideal for a 14 year old.

[Matt]

Oh, not to mention we haven't. So after we talked about that, the Capital One account, a listener reached out and also mentioned that we didn't say how the authorized user basically adopts the full length of that credit history of that particular card. And so let's. So if it's a card that I've had open for 15 years, which is the case, guess what? Their average length of credit is now? 15 years. Pretty sweet or whatever it is, it's pretty substantial.

[Joel]

She's only 12. How's that possible?

[Matt]

Yeah, it's like math is not math thing, but that's one of the ways you're able to do it.

[Joel]

Pretty cool how that happens. Next question comes from Sergio who says, hello all. I'm looking for a good balance transfer card to quickly pay off some debt. But I see that most balance transfer cards don't give back any good rewards, if any at all. Is this common? Would it hurt my credit if I do the balance transfer, pay off the debt and then cancel it and open another card with good cash back rewards? What's a good way of handling this?

[Matt]

That's right. Okay, well Sergio, I wouldn't be too worried about not maximizing the rewards or the bonus that you're getting with this one. He's looking for a card that's got it all and that's not often the case. So if you've got a bunch of debt and you're looking for that 0% transfer card, it means hopefully that you've got a plan to pay down that debt. And what I would be focused on more so is to make sure that you've got a very clear plan to execute and to knock out this debt within the allotted number of months that you have with that particular card. And so whether we're talking about 18 months as opposed to 12 or I mean some of those cards have like 21 months. Just keep that in mind. Ideally, I want you to minimize the number of months because oftentimes the fee that is associated with that card. So not an ongoing annual fee, but a transfer fee comes down to how long of a period of time you have. So oftentimes you'll see a higher transfer fee associated with cards that have a longer window. So I would love to see you take on the least amount of months possible in order to minimize the total out of pocket that you're paying on this transfer, on this balance transfer, pay

[Joel]

attention to that fee for sure. Because the difference between a 3 and a 5% fee on an $8,000, you know, debt transfer.

[Matt]

Thousand ten, thousand twenty. If it could be even more. Yeah, yeah. So only Sergio knows what he's actually got going on.

[Joel]

Yeah. But I mean, kind of what you're getting at, Matt, is the goal here is to avoid interest, not to score travel points. Right. Like you're looking for the best balance transfer card, which is different than like the best travel rewards card or the best cashback card. And so, yeah, just prioritize that one thing for the time being. And we, we love Sergio, that you're keen on paying off this debt quickly within the no interest period. But I would also say don't cancel that card right after you do, right after you accomplish that because you're going to harm your score. And there's just no need to do that. That's a self inflicted wound.

[Matt]

Just keep it open.

[Joel]

Yeah. As you're like improving your finances.

[Matt]

Unless you did get one of the worst 0% transfer cards out there that do have an annual fee. Well, then I get it. But don't open that one. Yeah, just stay away from that altogether. That would really be the only reason to not keep that thing around indefinitely is if it does have an annual fee.

[Joel]

And then I think once you are done with that, it's totally fine to, to open another card and kind of hopscotch and start using that card. Because hey, I finished the balance. I don't have credit card debt anymore. Now I want, I'm going to use credit cards more wisely and I'm going to get the card that has better rewards. So then it's okay. But we're talking about different cards for different uses for different purposes. So use the balance transfer card for what it's intended for. And then after that and you're on the straight and narrow in terms of how you're handling credit card debt. That's when you change things up and you get a card that's going to actually offer some rewards for how you spend.

[Matt]

That's right. Use it for the task that you have at handed. I'm thinking about how recently Jal I'd smoked pork butt and we said, you know what, Instead of pulling it because

[Joel]

the day ended in Y. Right.

[Matt]

Basically I said, let's chop it because we just wanted to get that fat incorporated real nice. And you know, here's a little gripe. When you pull pork, you got those long strands of meat and sometimes they can be difficult, especially with the kids, if you're making sandwiches or.

[Joel]

Anyway, so instead of pulling, you chopped it.

[Matt]

I am a barbecue chopper now. Yeah. I'm just not pulling my pork anymore. I'm only going to chop it because you're able to mix the meat.

[Joel]

You know the purists are judging you right now.

[Matt]

I know they are. But come at me. Same thing with brisket. We used to do the sliced brisket. Chopped brisket all the way, man.

[Joel]

Dude, chopped brisket is so underrated.

[Matt]

Thank you very much. So I don't care about it looking super pretty anymore. I'm all about how effectively can I incorporate the fat into every single bite as opposed to having big old globs.

[Joel]

And that's exactly what it does when you chop the brisket.

[Matt]

Yeah. And this, and this is exactly what I'm talking about. We're talking about credit cards. Folks were like, what are you even talking about? Yeah, knives. I was thinking about how we've got this meat cleaver and it is. It's just like this. I don't know what is it, like 5 inches, 6 inches tall. And it's real short, but it's got weight behind it. And the purpose of that knife is to be able to easily bring down the weight of that knife, the mass onto that meat and easily chop just right. But you don't want to use that knife if you are slicing a tomato or peeling carrots or something that is the wrong tool for the job. You want to use a paring knife for that. Or so you got different knives for different jobs and in a similar way. That's how I think you should maybe be thinking about this credit card. Like you need that credit card that's going to allow you to eliminate that debt. After that, then you can look to the more high performing fancy cash back rewards cards or whatever it is that you want to optimize for.

[Joel]

That's right. Last thing. Last suggestion for Sergio. After you've paid off this credit card debt, be working on amassing an emergency fund because that is ultimately what's going to help you avoid credit card debt in the future.

[Matt]

You know it.

[Joel]

Let's get back to the beer mat. This is a grapefruit substance by Bissell Brothers Brewing, one of the greatest breweries in the country. Out of Maine. Out of Portland, Maine.

[Matt]

Portland, Maine.

[Joel]

Yeah.

[Matt]

Last one was the last summer. So were you jealous?

[Joel]

The Mecca?

[Matt]

Yeah, dude, jealous. I was there for sure.

[Joel]

Been once and it was one of the greatest beer experiences at least in my life.

[Matt]

Yeah.

[Joel]

Okay.

[Matt]

So what I was surprised by was that it drank more, so much more like a traditional IPA than I was expecting. And so with, with it being Bissell, with it being up in the Northeast, up in New England, I associate high expectations. Well, it's a great beer and I just picture a super hazy. I think about Bissell, I think about Trillium, I think about Treehouse, Treehouse Hill

[Joel]

Farmstead or Lawson's is another one.

[Matt]

Right. All of these breweries that just specialize in the. What's the heady topper people, the alchemists, like the murkier the better. But this poured fairly clear and it was just very clean and juicy. In particular with a grapefruit, it drank very fruit juicy and I, I really enjoyed it for sure. But it's not what I remember substance being in the past, but I think it's just because I've sort of brainwashed myself.

[Joel]

But it was a little sweeter than I expected. Oh yeah. Like, I guess I was expecting a little more grapefruit bitterness in there, but

[Matt]

like almost like expecting more of that west coast pith.

[Joel]

Yeah, yeah. But I still, I mean, so good. Bissell makes great beers and grapefruit in an ipa. If you're gonna put an adjunct in an ipa, grapefruit or blood orange, like go with one of those two. Because it's for the most part only going to enhance. But yeah, because this is a great beer in its own right without the grapefruit. I think the grapefruit really does add something and it makes it even more interesting. So I'll drink Bissell brothers beer anytime

[Matt]

one is put in front of me. Agreed. I don't discriminate when it comes to Bissell, but that's going to be it for this episode. You can find our show notes up on the [e-mail] you know what, if you haven't left us a review, we would love to hear from you. If you've never sent us a message, send us a message via podcast review. You can like even write out like dear Matt and Joel, I thought, blah, blah, you know, you can write out whatever it is that you want to write. Leave us a solid number of stars over there.

[Joel]

Okay, can I quickly read the.

[Matt]

Preferably 5.

[Joel]

Can I read the funniest, most recent review that we have?

[Matt]

I haven't been over there in ages. What's over there?

[Joel]

It was really funny. I read it and it said, did

[Matt]

somebody do exactly this?

[Joel]

No, the title was mostly strong content. And then what they wrote underneath of that was but they sometimes have strange insight and I don't. I don't know if like our insights are strange or that kind of like oh my gosh. They. They know me somehow from afar. I don't know which one they meant but I appreciate it.

[Matt]

Would they how many stars they give us?

[Joel]

5.

[Matt]

Okay.

[Joel]

But then somebody else don't read the negative reviews 3 days ago 1 star. The impacts impact was impactfully impactful. So not even. They didn't even say anything.

[Matt]

Were they making fun of us? Did we say a whole lot of impact?

[Joel]

I don't know.

[Matt]

In a recent episode. Sometimes we're on, sometimes we're off.

[Joel]

Man.

[Matt]

You know like have you ever had a bad day at work before? That hurts though. That was the gosh. Really a one star. Somebody starred us.

[Joel]

Go counteract that review with a nice one for us.

[Matt]

I hate that. Yes, please do. It really does help helps to prolong the show. But you can find our show notes up on the [e-mail] that's going to be it. So buddy, until next time.

[Joel]

Best friends out.

[Matt]

Best friends out. Is it just me or is it getting really hard to figure out the best way to save for retirement? Well, Fidelity can help you to find clarity. So you can save the best way for you. With a free personalized plan, goal tracking and timely insights, you'll be set to take on retirement your way.

[Joel]

Get [e-mail] future expenses charged by your investments and other costs and fees associated with trading or transacting in your account. Apply Fidelity Brokerage Services member NYSE SIPC

[Matt]

Ryan Reynolds here from Mint Mobile with a message for everyone paying big wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course, if you enjoy overpaying, no judgments. But that's weird. Okay, one judgment anyway. Give it a [e-mail] Switch upfront payment

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[Matt]

This is an iHeart podcast. Guaranteed Human.