Podcast Summary: How to Money – Episode #976

Title: Ask HTM - Student Loans vs Investing, Best Cell Service While Abroad, & the Role of Faith in Our Finances
Host: Joel and Matt
Release Date: April 28, 2025
Duration: Approximately 56 minutes

Introduction

In episode #976 of How to Money, hosts Joel and Matt tackle a diverse array of listener questions, providing insightful advice on student loan repayment strategies, optimizing cell phone service for international travel, and exploring the intersection of faith and personal finances. This episode not only offers practical financial guidance but also delves into the personal philosophies that shape the hosts' approach to money management.

1. Student Loans vs. Investing

Listener Question:
Donald from North Carolina asks about balancing the repayment of a substantial private student loan ($70,000 at 3.8% interest) with investing in the market. He contemplates whether to maintain his current payment of $700/month towards the loan while investing $400/month or to accelerate loan payments to save on interest.

Discussion Highlights:

• Joel's Insight ([07:51] - [13:04]):
  Joel advises caution regarding reliance on the Public Service Loan Forgiveness (PSLF) program, noting current political uncertainties that may affect its availability. He shares his personal experience, reflecting on the drawback of paying off low-interest loans early instead of investing the money, which could potentially yield higher returns over time.

  "The sooner I pay it off, the more I can invest. But if I pay the minimum, I can invest less but for a longer time. So is time in the market always better?" — Donald [07:51]

• Matt's Perspective ([11:33] - [17:15]):
  Matt emphasizes the importance of not prioritizing high-interest debts over investments. Given Donald's relatively low-interest rate on his private loan, they suggest maintaining his current investment strategy while keeping the loan payments manageable. They highlight the benefits of liquidity and the potential for higher returns through investments.

  "You're at parity and just cash accounts. Again, like Joel said, you are not even having to invest those dollars. There's no need to funnel any more money towards the student loans right now." — Matt [14:07]

Conclusion:
Joel and Matt recommend continuing with Donald's current balanced approach, suggesting that his investment strategy may offer greater financial benefits given the loan's interest rate. They caution against accelerating loan payments prematurely, especially when investments could potentially outpace loan interest.

2. Reporting Loans to Credit Bureaus

Listener Question:
Vic inquires about the possibility of reporting personal loans made to friends or clients to credit bureaus to help improve their credit scores. He asks how an individual can facilitate this reporting and its impact on FICO scores.

Discussion Highlights:

• Joel's Response ([22:13] - [26:01]):
  Joel explains the limitations individuals face in reporting personal loans to credit bureaus, emphasizing that only official data furnishers can report such information. He warns against potential relationship strains when lending money to friends or family and underscores the absence of mechanisms for individuals to report these loans independently.

  "It's such an egregious mistake that I want Vic to avoid, I want everyone else out there to avoid... Money is not worth ruining a relationship over." — Joel [23:00]

• Matt's Clarification ([24:07] - [30:12]):
  Matt reinforces that individuals cannot directly report personal loans to credit bureaus. He mentions third-party services like Zillow and Self that facilitate rent and installment loan reporting but clarifies that these are not applicable for personal loans among individuals.

  "Self, who Matt, you mentioned just a second ago, they also offer a similar free service that connects to your bank in order to report payments." — Matt [26:32]

Conclusion:
Joel and Matt inform Vic that it's not feasible for individuals to report personal loans to credit bureaus directly. They advise maintaining clear boundaries and cautioning against lending money to acquaintances to preserve both personal relationships and financial stability.

3. The Role of Faith in Finances

Listener Question:
Jonathan from Dubuque, Iowa, explores how religious faith influences Joel and Matt’s financial practices. He seeks to understand the role of faith in their financial decision-making processes.

Discussion Highlights:

• Joel's Reflections ([31:33] - [38:47]):
  Joel shares that as practicing Christians, their faith significantly shapes their approach to money. He references the Bible’s teachings on stewardship, generosity, and purpose-driven financial management. Joel emphasizes that while faith influences their financial habits, they strive to present advice that resonates with listeners of various belief systems.

  "Everything we have is basically from God, what that means is that nothing I have is mine." — Matt [36:13]

• Matt's Perspective ([35:25] - [39:31]):
  Matt discusses the practical applications of biblical principles, such as tithing and diligent stewardship. He highlights that their faith fosters a mindset of responsibility and generosity, guiding them to use money thoughtfully to benefit others and support their community.

  "Our family tithes 10% to our local church. And then we give even beyond that when we feel called to." — Matt [35:25]

Conclusion:
Faith plays a foundational role in Joel and Matt’s financial philosophies, guiding their practices towards stewardship, generosity, and intentional living. They acknowledge that while their beliefs influence their approach, their financial advice remains inclusive and applicable to a broad audience.

4. Mortgage vs. Investing Stock Grants

Listener Question:
Meriwether seeks advice on whether to use stock grants from his compensation package to pay down his $400,000 mortgage at a 5.8% interest rate or to invest the funds in the market. He contemplates reducing his principal to lower his loan-to-value ratio and eliminate private mortgage insurance (PMI).

Discussion Highlights:

• Joel's Insights ([44:48] - [48:06]):
  Joel highlights the significant portion of mortgage payments that go towards interest in the initial years. He advises Meriwether to prioritize paying down the mortgage to eliminate PMI and reduce the overall interest paid, especially given the high-interest rate.

  "If you take out a 30-year mortgage every time you move, if you're only there for five years, man, think about how little of a dent you've made in the balance of that loan." — Joel [44:56]

• Matt's Recommendations ([45:46] - [48:06]):
  Matt agrees, suggesting that Meriwether use the stock grants to pay down the mortgage principal until reaching a loan-to-value ratio that removes PMI. He recommends diversifying investments after addressing high-interest debt and emphasizes the importance of tax considerations in these decisions.

  "Use it and do something with it. And so I'm actually not nearly as against, at least from a psychological perspective, people getting a lump sum tax refund..." — Matt [06:51]

Conclusion:
Joel and Matt advise Meriwether to prioritize paying down his mortgage, particularly to eliminate PMI and reduce interest costs. Once these financial burdens are lessened, he can redirect funds towards diversified investments, balancing debt repayment with wealth-building strategies.

5. Best Cell Service While Abroad

Listener Question:
Hadeel requests recommendations for affordable cell phone providers that offer reliable international options. She aims to maintain connectivity during her upcoming travels without incurring exorbitant costs.

Discussion Highlights:

• Joel's Suggestions ([48:25] - [53:12]):
  Joel humorously suggests old-school alternatives but quickly shifts to practical advice. He recommends using ESIM services like Airalo for cost-effective international data plans. Joel contrasts these with traditional U.S. providers, noting that companies like Google Fi and US Mobile offer competitive international plans but may still be pricier compared to third-party ESIM options.

  "You're not even like. I've heard horror stories of people turning on their phone and all these texts come through and they're charging a massive amount of money." — Joel [52:57]

• Matt's Additions ([49:55] - [53:38]):
  Matt concurs, highlighting the affordability and flexibility of ESIM services. He advises travelers to choose country-specific or regional ESIMs based on their travel destinations and suggests using a shared pocket router for groups to save further costs.

  "Airalo in particular seems to be the best of the bunch... you can really just kind of buy what you need." — Matt [52:25]

Conclusion:
For affordable and reliable international cell service, Joel and Matt recommend third-party ESIM providers like Airalo, which offer customizable data plans at significantly lower costs compared to traditional U.S. carriers. They emphasize the importance of selecting plans tailored to specific travel needs to optimize both connectivity and budget.

Conclusion

Episode #976 of How to Money offers a comprehensive exploration of listener questions that bridge practical financial strategies with personal values. Joel and Matt adeptly navigate topics ranging from debt management and investment strategies to the nuanced role of faith in financial decision-making. Their advice underscores a balanced approach to personal finance, advocating for thoughtful planning, flexibility, and the importance of aligning financial practices with one's broader life goals and values.

Listeners can access detailed show notes and further resources on the How to Money website.

Notable Quotes:

• Joel ([01:46]):
  "We're also going to talk about the role of religion in our lives. We're going to have a faith and finances kind of conversation."

• Donald ([07:51]):
  "Surely there has to be somewhere between paying $700 a month for the next 10 years and let's say doubling my payment to $1400 and paying off in less than five years."

• Matt ([10:05]):
  "The speaking to the heart and the heart of my faith comes down to loving God and loving your neighbor."

• Joel ([31:33]):
  "Our faith is an essential part of our lives. It's amazing how much the Bible talks about money."

• Meriwether ([56:06]):
  "I'm entertaining the idea of selling some of that stock as it vests and paying off some of the principal of my mortgage until I reach a certain loan to value."

Timestamp References:

• Student Loans vs. Investing: [07:51] - [17:15]
• Reporting Loans to Credit Bureaus: [22:13] - [30:12]
• Faith and Finances: [31:33] - [38:47]
• Mortgage vs. Investing Stock Grants: [44:48] - [48:06]
• Best Cell Service While Abroad: [48:25] - [53:12]