Ask HTM - Vital Home Reno or Moving Factors, Dropping Credit Without Dinging Your Score, & Student Loan Forgiveness or Payoff #1063

Summary

How to Money — Episode #1063 Summary

Episode Title: Ask HTM: Vital Home Reno or Moving Factors, Dropping Credit Without Dinging Your Score, & Student Loan Forgiveness or Payoff
Hosts: Joel and Matt
Date: November 17, 2025
Podcast: How to Money (iHeartPodcasts)
Theme: Listener Money Questions — Home Renovation vs. Moving, Closing Credit Cards, Student Loan Strategies, and HSA Optimization

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Episode Overview

In this “Ask HTM” episode, best friends and co-hosts Joel and Matt respond to listener questions about key financial decisions faced by everyday people. They dig into the practical and emotional considerations behind renovating versus moving, how to strategically close a credit card without crushing your score, approaches to student loan payoff versus forgiveness, and thinking big about Health Savings Accounts (HSAs). The conversation mixes actionable advice with honest reflection, story-sharing, and their signature friendly banter.

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Key Discussion Points & Insights

1. Money, Relationships, and Financial Advisors (Listener Email)

• Topic: Why hire a financial adviser?

• Listener Lee’s Point: Relational stability and spousal harmony often matter more than the fee or financial “outperformance.”

  • Sometimes, having a neutral third party makes money management less of a personal battleground.
  • Quote (Joel, 04:24): “If your spouse is going to freak out and they're not going to listen to you in the heat of the moment, you know, you could harm your relationship if you haven't planned ahead properly.”

• Matt’s Additions:

  • Don’t pay high fees just hoping for outsized investment gains. Expertise makes sense for tax planning and strategic withdrawals, not performance chasing.
  • (Matt, 06:23): “We never recommend to pay higher fees to pay...for outperformance. The value they bring is things that are not stock picking.”
  • The third-party dynamic (like with marriage counseling) can bring peace or act as a “mediator” for couples’ money talks.

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2. Home Renovation vs. Moving: Matt’s Real-Life Addition (Listener: Tim from Mount Prospect)

• Listener Question (09:38): How did Matt and his family decide between building a home addition, moving, or renting the original property?

Matt & Joel’s Decision Factors

• Emotional/Practical Considerations:

  • Location trumped the allure of a “dream house.”
  • Proximity to work, school, community, and lifestyle (walking, biking, social connections) was more valuable than any property upgrade (13:36–14:10).
  • “Even when we, like, picture our quote unquote dream house...our specific location had everything we were looking for.” (Matt, 12:03)

• Financial Considerations:

  • Matt’s low mortgage rate (4.25%) made upgrading expensive due to higher current rates (15:08).
  • Factored in real estate transaction costs and potential loss of equity.
  • Renting out their existing primary residence wasn’t compelling due to overcapitalization and cash being locked up (16:35).

• Return on Investment Reality:

  • Most renovations don’t pay back 100%. Often you get back only 40–60% of investment; do it for personal fulfillment & long-term utility.
  • (Joel, 17:32): “When you add on to a house...you might be getting 40, 50, 60% back...So you have to realize that on the front end...”

• Critical Non-Financial Factors for Big Home Decisions:

  • Think about work, school, and family needs (19:12) — not just the next year, but the next decade.

Tips and Lessons for Listeners Considering Renovation

• Count ALL the costs—including the stress and inconvenience.
• Don’t expect immediate or full financial return. Make sure you’ll stay long enough to “use up” the value.
• Find a contractor carefully: get referrals, check quality of work, get detailed quotes, not just the lowest number (22:30–23:14).
  • Detailed quotes reduce surprises: (Matt, 23:51): “The company we went with...when they finally sent the quote over, it was like seven pages broken down per line...”
• Consider paying with savings, but using a HELOC can be reasonable for major, value-adding renovations.

Memorable Moments

• (Matt, 13:36): “Our specific location had everything we were looking for...these are all things that we realized, oh my gosh, all of these things are so much more important than...another house.”
• (Joel, 20:28): “If you try to sell too quickly, you're going to feel the immense pain of that at the closing table.”

[Renovation segment: 09:38–24:52]

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3. Closing an Old Credit Card Without Killing Your Credit (Listener: Scott)

• Scenario: Scott wants to close his oldest credit card (Discover, 2007) due to bad service and fraud, but worries about hurting his 820–840 credit score. (28:22)

Analysis & Advice

• You’re Not Stuck:

  • Loyalty is overrated—don’t put up with lousy service.
  • The risk to your score is modest if you have strong credit history and multiple cards.
  • “Our advice is normally to not close old credit cards. That’s because the oldest cards that you have are typically helping you out in multiple ways.” (Matt, 31:24)

• Score Impact:

  • With another (Amex) card from 2019, expect only a minor (10–15 points, maybe) drop; not enough to matter at your score tier.
  • Only a major drop if this was your only card or if it had a much higher credit limit than all others.

• Proactive Moves:

  • Open another card before closing, to keep available credit high.
  • Ask for a credit limit increase on your other card(s) before closing the old one.
  • Consider a solid flat-rate cashback card (Citi Double Cash or Fidelity Visa).
  • (Joel, 32:44): “760-plus, that’s essentially perfect from our point of view...and getting above that, it’s not really going to add much to your life.”

[Credit card segment: 28:22–35:46]

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4. Student Loan Payoff vs. Stretching for Forgiveness (Listener: Danielle from Minnesota)

• Scenario: Danielle is a lawyer with $370,000 in student loan debt. She can pay it off entirely but is considering paying part now and the rest over time to possibly achieve forgiveness. Is it wiser to pay it off or ride out the likely “cheaper” forgiveness route, even though it drags on for 16 more years?

Key Considerations

• Strong Financial Position:

  • She owns a home, saves for her kids’ college, maxes out retirement—student loans are her main hurdle.
  • “Despite this incredibly mountain-high level of student loan debt, you have a world of options...because you’ve handled your finances so thoughtfully.” (Matt, 41:00).

• Forgiveness Pros and Cons:

  • Likely less paid out-of-pocket with full forgiveness, but huge tax bill at the end (forgiven amount taxed as income).
  • Keeping debt for 16 more years means emotional and psychological baggage, less flexibility.
  • (Joel, 41:55): “Keeping that debt around for 16 years to achieve forgiveness, when you still owe tax...I think it makes it not all that appealing.”

• Hosts' Leaning:

  • If you can pay it off without compromising other major goals, just do it and be free—especially with high interest rates (~8%).
  • Most legislative changes would “grandfather” current beneficiaries anyway, so don’t fear sudden rule change.
  • (Matt, 45:03): “There’s just something mentally freeing about getting the student loan debt out of your life quickly that I think is going to allow her to more easily crush other financial goals and other life goals...”

Takeaway

• When you’re hyper-optimized everywhere else, the peace of mind may be more valuable than squeezing every dollar by stretching forgiveness. Don’t obsess over maximizing ROI if it costs you 16 years of financial tension.

[Student loan segment: 35:46–45:30]

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5. HSA Investing: Could You Live Off Your HSA’s Compound Returns? (Listener: Steven, Facebook Group)

• Scenario: Steven asks if contributing and investing in an HSA now could one day mean you could pay ALL medical bills just from the investment income, like the “4% rule” but for healthcare. (48:21)

Hosts’ Take

• It’s a Fun & Valid Way to Think About It:

  • If you save and invest consistently and healthcare costs are contained, you could reach a point where compound returns cover your annual out-of-pocket max.
  • Realistically, don’t assume 10% returns forever (build plans on 7–8% or lower).
  • (Matt, 50:45): “...Your HSA, if left untouched for a decade or two, yeah, it really could grow to cover all your healthcare expenses.”
  • Unlike an IRA, HSA withdrawals for medical expenses are always tax-free.

• Worst Case Isn’t Bad:

  • If you “overfund,” at age 65 HSA works like a traditional IRA for non-medical expenses (just taxed as income, no penalty).
  • Flexibility and tax benefits make maxing your HSA an elite move.

[HSA segment: 48:21–52:45]

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Notable Quotes & Memorable Moments

• “Know your relationship. And if hiring someone to be able to point the finger at [during downturns]…go for it.” — Joel (04:24)
• “You have to be willing to just light some of that money on fire...You have to be okay saying, ‘Yeah, this is for us, we’re going to be here for a while.’” — Matt (17:57)
• “If you need to rent an apartment or apply for a mortgage, it makes sense to pay extra attention to your [credit] score. ...But in this case, Scott has clearly paid close attention for a long time and this is just a minor move that’s not going to do much damage at all.” — Joel (32:44)
• “Student loans, yes, are a burden for many—but it’s also true [they] can be a good form of debt if you’re prudent about your use and thoughtful about your course of study.” — Joel (39:12)
• “There’s just something mentally freeing about getting the student loan debt out of your life quickly...” — Matt (45:03)
• “Unlike your traditional 401k or IRA...you don’t have to pay tax ever on that [HSA] money. Heck yeah.” — Joel (51:29)

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Timestamps for Major Segments

• 02:00 – Episode Kickoff & Preview
• 04:12 – Financial Advisors & Relationship Health
• 09:38 – Home Renovation vs. Moving (Tim’s Question)
• 28:22 – Dropping Your Oldest Credit Card (Scott’s Question)
• 35:52 – Student Loan Payoff vs. Forgiveness (Danielle’s Question)
• 48:21 – HSA Investment Strategy (Steven’s Facebook Q)
• 52:45+ – Banter, Beer Review, Closing Thoughts

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Episode Tone & Style

Conversational, practical, supportive, and occasionally irreverent—Joel and Matt’s dynamic brings warmth and relatability to sometimes intimidating financial topics. They encourage real-world thinking (“count the non-financial costs,” “do what brings peace of mind”) and reinforce the importance of context, not just cold math.

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For Anyone Who Missed the Episode

This episode is packed with insights for anyone facing big life-money decisions—from home upgrades to tackling debt. The hosts break down not just “what the numbers say,” but how to weigh what matters most to you. Sage advice, a bit of snark, and real-life stories make this a must-listen for folks seeking actionable, jargon-free guidance on pivotal personal finance crossroads.

Transcript

[Matt]

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[Joel]

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[Matt]

I love entrepreneurship. I have been a small business owner for almost 20 years now, but it is tough to separate work from life. The business can be on your mind 24 7. So when you are hiring you need a partner that works just as hard as you do. And that hiring partner is LinkedIn Jobs. LinkedIn makes it easy to post your job for free, share it with your network and get qualified candidates that you can manage all in one place.

[Joel]

Here's how it works. Post your job for free or you can pay to promote share with your network. You can let your network know that you're hiring. You can even add a hiring frame to your profile picture and get two times more qualified candidates. So post your job for [e-mail] howtomoney that's LinkedIn.com howtomoney to post your job for free. Terms and conditions apply.

[Narrator]

Delta Air lines just turned 100 and is already shaping the next century of flight with the Delta Sustainable Skies Lab. Here they're building the future of flight. Think electric air taxis and next gen aircraft aiming to cut fuel burn significantly. And this isn't just future talk. Today their fleet of Boeing 737s have marine like finlets designed to reshape airflow that reduces dragging. The future of travel is more sustainable and Delta's leading the way. Learn [e-mail] Sustainability welcome to How to Money.

[Joel]

I'm Joel. I'm Matt and today we're answering your listener questions.

[Matt]

There are so many FL in our office today. Do you think they're gonna get picked.

[Joel]

Up on the microphone? I don't really hope not.

[Matt]

If listeners are wondering what they hear buzzing past our microphones. I wonder if they're attracted to the food from that we had during lunch today.

[Joel]

It was me eating the Korean food today, not you.

[Matt]

I know. I think it's the like the sweet. Yeah, like the you Reheated it on the cast iron. The sweet mixed with the soy, it gets, it's aromatic, gets in the air. Everybody wants a piece, including me. Quite the weird intro for today's episode. This is our Ask how to Money episode. We're going to hear from some listeners today. Joel Listener is considering a home renovation. He wants to, he might add on is I guess, where he's at and wants to hear how we have thought about it in the past. Another listener has a problem with his Discover card and he's not getting treated well by, by them as well by the customer service. So we'll talk about that. And another listener is considering a lump sum to pay off her student loans or whether or not she should stretch that thing out, stretch those bad boys out some. We'll get to that, plus more during our episode today.

[Joel]

No doubt chock full of good stuff today. First off, I love getting listener emails. Love it when people reach out and.

[Matt]

They read them all want to tell.

[Joel]

Us about their lives or tell us about something like, hey, I heard your episode on this, but here's why we do it slightly differently or here's why you're right. I prefer the ones where they tell us why we're right.

[Matt]

The affirmative, the affirmation email.

[Joel]

Here's why. You guys are awesome. You can send those emails anytime you want. Well, Lee emailed and he, after the, the interview that we had with Pam from Wealth Ramp, he wanted to weigh in on why he chooses to hire a financial advisor. And his main thing came down to relational stability and happiness. And he, I love that he's, he.

[Matt]

Said basically if things went south, his wife was going to be tempted to blame him.

[Joel]

Yes.

[Matt]

Like I think, I think he said that she told him that and she's like, just so you know, if things don't work out, this is going to be on you. It's going to be really hard for me to not blame you.

[Joel]

Yeah. So even if the market's down 15%, which you know, you could try to show your spouse statistics about how frequently this happens and hey, guess what, this isn't abnormal. But if your spouse is going to freak out and they're not going to listen to you in the heat of the moment, you know, you could harm your relationship, I guess, if you hadn't planned ahead properly. And it makes me, it makes me think that one, I think, yeah. Know your relationship. And if it's, if hiring someone to be able to point the finger at if that's part of what's going to lead to Long lasting relational success. Go for it. I'm totally fine with that. It makes me think. I had a recent conversation with a friend, and he's kind of been in charge of the finances, but his wife's like, man, you know what? I really want to pay off some of this debt that we have lingering. He's like, I'm more of like a, let's keep investing man. Let's grow the net worth. They can have a discussion about it. But he's like, you know what? She deserves more input. I'm going to lean more in her direction for a little while. And so much of. I think handling finances well together as a couple is not just letting one person take the reins and listening to the other person's concerns if they have them. Totally.

[Matt]

Yeah. Because you could say, hey, how about you just get informed, get educated, look at what the market does over time. Right. Like to actually fully understand it and save the 1%. Because for him, I mean, you're looking at probably like a 1% fee that's getting taken out of his nest egg every year. I would rather understand it and not pay the 1%. But yeah, it doesn't really matter, though, if when the relationship's on the line and the dynamics are at play and you got to. Yeah, you certainly have to take that into account. I. He didn't say this specifically, but I do want to address the fact that he kind of hinted or intimated at the fact that maybe she was thinking that underperformance might be due to the fact that he wasn't, like, making the right choices as far as, like, their investments. And I do want to make clear that we don't recommend hiring a professional and paying out the nose for outperformance. That is not something that we recommend. I think it's absolutely worth it to pay for expertise.

[Joel]

Right.

[Matt]

Especially when it comes to minimizing your tax bill and making sure that you are. That you are drawing from the right accounts, that you're making the right sales, that you're hanging onto certain things for the right amount of time. That's totally worth paying for. But like, we never recommend to pay to pay higher fees to pay the Cathie woods there. Whatever it is that she. I don't know, what's her fund?

[Joel]

Like 3/4 of a percent expense ratio on her fund. Yeah.

[Matt]

Don't do that.

[Joel]

No, yeah, I think that's a. That's a good point. If you.

[Matt]

And he didn't say that directly, but there's a part of me that was picking up on that A little bit of like, well, no, we pay somebody and it's just all going to be better because of that. But that's not always the case when.

[Joel]

The average money manager is, yeah, you're paying what they're worth. What the value they bring is, is things that are not stock picking out performance. Because all the statistics show that individual money managers don't do a great job at that, especially over the longer the time horizon gets. So. But Lee, if that's helpful to you, to have somebody in your corner where they're like, they're the third party, it's kind of like trying to do like.

[Matt]

A mediator, just like someone just to sit there in the middle just to help. Honestly, it's not someone there in the middle. It's someone for you, both you and your wife to get together on and like, yell at because he doesn't want, he doesn't want her yelling at him. It's just like, oh, yeah, babe, we should give him a piece of our, a piece of our mind.

[Joel]

And I think like the, you know, same is true for marriage counseling. Right. To have a third party in the room can be super helpful. And I think, yeah, that's a part of the reason people hire someone to help and facilitate some of those, you know, be able to bounce off money questions that they have too, together as a couple.

[Matt]

So you see, in my diy, marriage counseling isn't going to be, isn't going to pan out.

[Joel]

Well, Joel, it's okay to have discussion, but like, you know, there's times where it gets too intense, too heated, it's too contested. Yeah. It's hard to go alone to pull in a pro. And if you are thinking, oh, man, maybe we should talk to an advisor, you can find a [e-mail] advisor that's right.

[Matt]

The beer that you and I are going to enjoy today, and I am already enjoying this beer, man. This is a good one. It's called Jeremy's Changed, which is a funny name for a beer, but it is by far.

[Joel]

Do you think it's for the better or not?

[Matt]

I think for the better based on what I'm enjoying right here.

[Joel]

Maybe Jeremy picked up some healthy habits.

[Matt]

Is that a flower or is that like a jellyfish?

[Joel]

It's like a jellyfish to me, but.

[Matt]

It'S fonta flora, and jellyfish don't have that many tentacles, do they?

[Joel]

Yeah.

[Matt]

Or do they? I don't know.

[Joel]

It's cool, Art.

[Matt]

It is cool.

[Joel]

Yeah.

[Matt]

Fontiflora is the brewery Which I've actually been to. I don't think you've been there yet.

[Joel]

No, I haven't.

[Matt]

It's a rad spot. Like, just it's got the vibes going on that we actually talked about this.

[Joel]

Past kind of pastoral. Right? Yeah.

[Matt]

Back on Episode 1000 when we did the AMA episode, somebody asked, hey, if you could open a brewery, what kind of beers, what kind of vibes would you be going for? And I specifically called out Fonta Flora because I love what they got going on over there up in North Carolina, not surprisingly.

[Joel]

But one of these days, I'll make it up.

[Matt]

Well, let's go together.

[Joel]

All right, I'm in. All right, let's get to some listener questions. If you've got a question, we'd love to Hear from you howtomoney.com ask. It's where you can find the simple instructions. Basically, recording the voice memo on the app, on your phone, emailing it over to us. Hopefully we can take it next week on the show. Matt, let's get to one Specifically, let's get to a question about how to think about renovating a house.

[Tim]

Hey, Matt and Joel, this is Tim from Mount Prospect. Again. I snuck a second question into my email with the first voice memo and Matt responded. He was like, no, no, no, that's going to cost you another voice memo. So here we are. My question is more of a request for Matt regarding the addition he put onto his home. You guys have briefly talked about this project in the past, but I'd love to hear about the decision making process that Matt and his family went through when deciding whether they should sell or rent the current house and go buy a new house versus putting the addition onto the home. There's, of course, a lot of financial considerations here, but some of the deciding factors with this type of decision can be more important than what the numbers are telling you. And then my follow up to that is, once you decided to go with the addition route, what were some of the steps that you took to kind of complete that project? And would you do anything differently, knowing what you know now? I look forward to hearing about your journey. Thank you.

[Matt]

Oh, the journey. It was indeed a journey. Joel, Kate and I were just actually reminiscing because a year ago, I love photos that pop up in your phone and it tells you, like, here's what you were doing this day last year. And we hadn't even broken ground when Kate and I had this conversation. We had not even broken ground for.

[Joel]

Our home renovation on the palatial east wing.

[Matt]

Which is not on the east wing, but we hadn't even broken ground. And to think that we are so used to the fact it being there. It feels like it has always been there. It's a part of our life. It has been fully integrated into how it is that we live. I think that it's just kind of mind blowing.

[Joel]

It's probably a good tip just ahead of time to count the cost. Right. And not. Not just the financial cost, but like that. Do I want to live through this renovation cost? Oh, yeah, because you're right.

[Matt]

So bizarre. Yeah. Because in the moment, it seems like. It seems crazy. You're like, what are we doing? Yeah, like, why do we.

[Joel]

What are we subjecting ourselves to? And I think part of it depends on how many rooms in the house it's going to touch. Like, you were able to kind of keep that, for the most part, cordoned off from the way you guys live in your home.

[Matt]

Literal. Yeah, with literal plastic taped to the floor and see. Yeah.

[Joel]

But if you're redoing kitchens and bathrooms that you currently use, you have to change your whole way of living for a while. And so you have to really think, like, how big is this upgrade? It's like, are we really wanting to go through with this? Are we willing to be inconvenienced to a massive. In a massive way? That's like something Emily and I have discussed as we're even considering minor improvements to bathrooms. And we're like, yeah, I don't know, man, do we want to. Is it that bad? Maybe we just leave it as is.

[Matt]

So Tim asked specifically about, like, well, why didn't you choose to sell that house and go with something different? Why didn't you choose to even hang on to that place, you know, rent it and look at a different property? Fact is, we did look for another property. We did that for, like, close to two years. I don't know if you remember. Like, we would drive, we'd go around and like, oh, maybe we'll go look over here and, oh, I don't know. But we actually did seriously consider that. And after all of that searching, we decided that, you know what? Even when we, like, picture our quote unquote dream house and whatever that entails, you know, for the individual out there, but we, bottom line, it did not matter because what we found, what we discovered was that our specific location had everything we were looking for. It may not have been like the perfect quote unquote dream house, but because of where it was, it meant that Kate and I, like, we are able to walk to date nights. We are able, like we're close to y'. All, we're close to work because we're close to work. I mean like we are still able to be a one car family. I bike, I'm able to bike into work all the time. That would, if we moved further out. We're close to the mountain where we're able to get outdoors and hike around. We like, we're close to the kids school. The kids are able to like run around the neighborhood. Like these are all things that we realized, oh my gosh, all of these things are so much more important than saying, hey, let's go find another house. And the reason I bring these up was because I think Tim was alluding to the fact that like, hey, aside from the financial considerations, right, like there are so many other factors to run through as to like what it is that makes your life fulfilling, not fulfilling, but just happy. And what it is that you want to do on the kind of like the day to day basis, you know.

[Joel]

Community too that you've built up in that space. You're kind of, you're not starting clean over. You can go drive to see those friends. But it's different when you get to interact with like, I interact. I have a lot of like older folks, my parents age that live close to me. I love talking with them on my way to work. Like, I'd be sad if I didn't run into Dan who's doing his hill sprints, you know, on my way into work. I really do like treasure those hangs.

[Matt]

And how old is Dan?

[Joel]

He, Dan, he's probably late 60s, early 70s. Yeah, Dan. Yeah, he's getting after it, man. So. But I think we'd be remiss, Matt, not to talk about the money side of things at least a little bit. Right?

[Matt]

Yeah. I wanted to start with, I guess some of the specific factors that went through our mind that caused us to realize, wait a minute, no, no, no, this is the house. And let's just take the steps that we need to in order to make it work for us for the next 15 years. Basically because our little dude just started, just started kindergarten, we're not planning to go anywhere for, for school. So.

[Joel]

Yeah, okay. So financial considerations obviously, because you and I discuss this important factor as well. We host a personal finance podcast after all. But you had a locked in rate on your current mortgage of what, like 4%, four and a quarter. And rates when you were looking at adding on or buying a different house were in the upper Sixes. It was probably hard for you to think about giving that up in order to buy something bigger too, because I think something like the annual cost in just the interest alone could have been tens of thousands of dollars a year by upgrading to a new home with that higher interest rate. Yeah. So that had to be like at least a big pro in terms of staying totally.

[Matt]

It was. But honestly, even more than that, it came down to some like the, like the non financial, the non monetary considerations.

[Joel]

Because you're loaded.

[Matt]

I mean, no, like we were looking at some properties that cost less money.

[Joel]

Right.

[Matt]

And so the ability to. Yeah, we would have ended up with a higher mortgage, which hopefully at some point, not promised, not guaranteed that we would be able to refinance down the road. But I think had we found, had it made sense to us from just all the, maybe the lifestyle considerations that I think Tim is asking about, I think we would have been willing to do it. But ultimately it wasn't about the money. Ultimately we said let's just stay here and again, make the, make the changes and renovations that we needed to. But, but that, I mean, obviously that is a factor.

[Joel]

You do have to factor in extra tens of thousands of dollars a year. It certainly feels like a hurdle impediment.

[Matt]

Absolutely. Because if, let's say rates were the same, let's say they were still at four and a quarter and then we were able to buy something like that would have obviously expanded the scope of our search. And then all of a sudden you're thinking, okay, well then, well, we could potentially do this. So, yeah, certainly even then you're talking about interest rate that he's got locked in at his current place. That's if you sit and sit in the high threes or in the fours, man, that's pretty dang attractive.

[Joel]

And even if you're talking about moving, you're still talking about real estate transaction fees. But that if you're, you know, making an even switch from a 4% mortgage to a 4% mortgage, not, not that big, not nearly as big of a deal. Right. But if you're doing, you're paying those transaction fees, but also paying a higher mortgage rate. Yeah, that, that's going to add up.

[Matt]

Yeah. And he did say something about renting. Like why didn't you hang on to it and rent it? Because then you got, you got cash flow flowing in as well. But also when it comes to primary residences, they don't often make the best rentals because you've got, they're overcapitalized. You've got too much money into that property as opposed to what it is you could then take out of that property. And what would you then do without money instead of dumping it into a singular property? That sure it might be an impressive rent number, but just think about not only just how much money you have locked up in that property because it's typically I'm going to assume that most primary residences for folks are worth a bit more than a standard, you know, 2232 rental.

[Joel]

And to be a bad friend here, I will note that your decision to add on to this house, you're not going to get all the money back that you put into it. And you had to be okay with that. You had to be Zen with that too.

[Matt]

Yeah. Why is that being a bad friend?

[Joel]

Well, no, I mean I don't want.

[Matt]

To make it sound like rubbing my face in it.

[Joel]

Yeah, not trying to, but just trying to highlight that for everybody. When you add on to a house, oftentimes you're going to get, depending on how you add on what you're doing, you know how appealing it is to the general home buying public, you might be getting 40, 50, 60% back of the money you stuck into. And so you have to realize that on the front end, how much use am I going to get out of this? How much is this done for personal reasons that are going to be fulfilling to us when somebody else might not appreciate it the way we do?

[Matt]

100%. And I mean, and that's why I think it makes so much sense to think about it the way that Tim start trying to think about it. Right. Which is, which are the non financial because it doesn't often make sense because you're thinking okay, are we going to be able to get our money back out of this counter? Like you can't or this upgrade over here, you know, is somebody going to, is somebody else going to be willing to pay the same amount that we did when it comes to the resale price, you can't think about it that way. You have to be willing to just light some of that money on fire. And so because of that, like you need to set a budget and it's got to fit within that framework. But you have to be okay saying, yeah, this is for us, we're going to be here for a while. And I think that's the biggest sticking point is if you are not going to end up staying there for a while because then you don't get to experience the actual benefit, the positive lifestyle changes to your family. And I think that is the most important thing to think through. Like for other folks out there, you know, so for someone else, they're thinking, alright, we can afford, we've got this much saved up, we could do a renovation or we could add on to this extent. But I think through the different reasons that people tend to move in a non ideal scenario and I think of job, right, like if you've got an opportunity to move somewhere else, you're going to get a sweet promotion, but you got to move to this other city.

[Joel]

Or you might get fired. Did I forget to tell you that you got fired.

[Matt]

So that's a huge consideration. Schools, like education, that's a big consideration. That's literally why, you know, that was a big reason why you and I, why we both moved our families out of our former city. We were looking for a different type of education. And so that's something that I think can totally throw a wrench into things. And then sometimes family as well, right? Like whether it's wanting to move somewhere where you're closer to your parents for them to be involved with like the new grandkids, the fresh grandkids on the scene, or if your parents are older and maybe the tide's changing a little bit and there's more expected out of you to take care of them. I think you've really got to think through those three factors before you dump a bunch of money into a renovation or even buy a home somewhere where you're not thinking about those factors. Because those are the kind of things that life changes fast. And three years in you're thinking, oh my gosh, we didn't even think about this. We really should have thought, looked a little bit further down the road here and made our decisions based on the next five to 15 years, not like the next five to 15 months.

[Joel]

I guess. Yeah, I think it's a good point. Really. It's really important. And spending more than putting more into the home and not getting the value back out of it. It's okay, time will heal that wound.

[Matt]

But if you got the time, if.

[Joel]

You got the time and if you try to sell too quickly, you're going to feel the immense pain of that at the closing table. And you're, yeah, not going to be able to. Like I talked to so many people who are like, I want to get back what I put into it. That's just not how real estate works. And so if that's your goal, then renovating is probably not for you.

[Matt]

Unless you're, unless you're looking at putting a New garage door in. Evidently, that's the number one item that for the most part, you get every dollar back.

[Joel]

Or if you're, like, diying your own bathroom, that's one, too. So you want to talk about maybe step. Some of the steps you took. Finding a contractor.

[Matt]

Yeah, find one. Find. Find a good contractor.

[Joel]

Yeah, finding a contractor. But like that. Even that. Like, that's. So I'll say there's a lot of people who find somebody they think is good and turns out they're not. So do you have any recommendations for finding a good one?

[Matt]

Yeah, certainly. I mean, we'll ask around. I mean, it's tough to escape your reputation as to whether or not you're going to go over budget, whether or not delays, whether or not the. As far as the timeline. Right. Or whether or not the quality of the work doesn't hold up. But I would say even before that, because he was asking about, like, what steps did you take? Or what would you change? Kate and I really thought through how we wanted to use the spaces. Like, we weren't just thinking, oh, we want to make the house bigger, let's just add a room. But we thought very specifically about how we would arrange the furniture within that room and how it would accommodate what we wanted to do in those spaces. I think thinking very specifically about that can help you to be like, oh, no, no, we actually need to extend this wall or this room like, another two feet, because we think we want to use it in this way, but that's not going to quite flow. It's not going to work quite to the extent that we're wanting it to. But beyond that, we hired an architect because that helps just for you to get the thoughts from your brain onto an actual set of drawings that a builder can take. But then as far as the builder goes, we got plenty of quotes. We met with a lot of different builders, and you kind of have to go with your gut. Aside from checking out their people, you know, they've got references, and you can go see houses that they've worked on and things like that. But.

[Joel]

And when you say go with your gut, I think, like, could be misinterpreted. They might be like, that guy's got a good vibe.

[Matt]

Or like, well, sometimes I like their logo sometimes because, like, there's a guy and you know what, where he came back great on was his numbers. And it's just like, ooh, he's saying he could do it for that. But then we saw the quality of his work. We saw how he treated we heard from clients and we could read between the lines a little bit that he wasn't the most professional. And that was sort of an instance where we could have gone with a more affordable option, but it may have ultimately cost us the same, plus a whole lot of headache to boot. And so we didn't go with the most expensive contractor. We didn't go with the cheapest, but I think we kind of found the Goldilocks right in the middle, and that's really important, high quality, and we were totally happy with them.

[Joel]

It's really important to note that some people will say, yeah, I can do it for this, but can they. Are they underestimating? Are they not including all the potential costs? And so then they come back to you once you've signed the contract, and they're like, yeah, I said it was going to be 35 grand, it's going to be 47 grand. Because I wasn't thinking about this and this. And they just haven't really built into their quote everything that's necessary. So you. That's part of. On you as a homeowner to kind of push back and ask those questions as well. So you know that, like, the quote that looks awesome. Well, it might not be as awesome in actuality either. And maybe the quote that looks higher is spot on. And that's actually what they're going to charge you.

[Matt]

But because they spent two hours there, and then when they finally sent the quote over, it was like seven pages broken down per line on him and the guy. The company we went with, that's exactly what they did. And we were so spot on as far as the numbers go. And granted, it's not because nothing changed. Things changed, like, but there are some spots where we saved some money. But then there's other areas where we said, ooh, you know what? We're gonna make that instead of a single, we're gonna make that a double window. And so we. We totally ate the cost of that window. That was painful. I'm just like, oh, this is. It was already installed.

[Joel]

Is that a dad joke? Painful?

[Matt]

Oh, if only it was.

[Joel]

Sorry about that.

[Matt]

But I mean, yeah, certainly do that. Ideally, yeah, you saved up the cash. But we always talk about how renovations are also an area where a heloc if done prudently without going too far.

[Joel]

Off the deep end with a reasonable payoff time frame.

[Matt]

Yeah, that can make sense. But, yeah, hopefully all that will give Tim some practical steps to take in order to not only consider an add on addition or renovation, but actually following.

[Joel]

Through with it for sure. All right, that was a lot. I feel like we could have done more, but no.

[Matt]

Well, he even said he's just like maybe this will be a whole episode. And it's, it really could be. I don't know if we'll do that.

[Joel]

I mean, really, it truly could be because there's so much to talk about here and we could go into more depth on every single one of those points. So if there's follow up needed, Tim, send us another question. All right, we've got more to get to Matt, including we're going to talk about canceling a credit card, whether it ever makes sense. We'll get to that and more right after this.

[Matt]

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[Joel]

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[Matt]

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[Joel]

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[Matt]

Is always the busiest time of the year. Yes, it is my favorite time of year. I love it. But the calendar gets pretty full between travel, trying to think of the best Christmas gifts, hosting friends and family. It can be really easy to lose sight of your financial goals because your spending is a bit out of control. If you want to keep your finances under control this holiday season, you need to be using Monarch, rated Wall Street Journal's best budgeting app of 2025. Monarch is the all in one personal finance tool that brings your entire financial life together in one clean interface on your laptop or on your phone. And right now, just for how to money listeners, monarch is offering 50% off your first year.

[Joel]

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[Joel]

All.

[Matt]

Right buddy, we are back from the break. We are going to talk about student loans here in a minute, but let's hear from a listener who he's looking to make the right decision with the credit card that's not serving him well.

[Scott]

Hey Matt and Joel, this is Scott. I had a question about canceling my oldest credit card. So my oldest credit card is a Discover from 2007 and my next oldest is an Amex from 2019. My current credit score is in the 820 to 840 range. So I'm curious, how much drop will I get if canceling my oldest card? The reason for wanting to cancel is that Discover started charging me a monthly charge for protection of some sort without asking and then I had fraudulent car charges. So then I had the card replaced, froze my account and now they've continued to allow fraudulent charges on my account and I really just don't want to deal with Discover anymore. So I'd really like to hear your take on my options. If I should just keep dealing with the headache of Discover card or if I should just bite the bullet and maybe lose 100 points on my credit score.

[Matt]

Score.

[Joel]

Whatever you guys think it'll be.

[Scott]

Thanks. Love the show.

[Joel]

Bye Scott. Man, bummer the Discovery has treated you so poorly. I hate to hear that. Yeah, and I totally get wanting to cancel this guard if they're not Treating you well.

[Matt]

Would you put up with that, that kind of treatment?

[Joel]

JOEL no, of course not. No, I wouldn't. And I think one of the best abilities that we have as consumers in a free market economy is to walk away and to not do business with a company that's not responsive and that's not treating us well. Yeah.

[Matt]

Need a Discover well.

[Joel]

And it's funny because I like Discover. Like, I talk about how they're one of my favorite online savings accounts, maybe.

[Matt]

Not the Discover credit card division.

[Joel]

Well, no, actually, I think when you look at, from a customer service perspective, they perform better in the ratings than some of the other big guys.

[Matt]

So what's funny is, well, I'm thinking about maybe one of the few times I've ever had a fraudulent charge on an actual card. And I think it's, I think it was Discover, like, as I think back. So maybe that's more anecdotal and less a broad survey, maybe with what you saw. I'm with you, Scott. And maybe we'll do our own unofficial survey. If there's other listeners out there and you've had a lot of fraudulent charges to your Discover card, let us know. We're going to break the scoop. Is that what they say?

[Joel]

Even great companies, by the way, they can have tough times or not treatment certain customers well, like a big, big company like that, there's bound to be complaints from time to time. So. Yeah. But I also get it, and I think it makes sense if a company has consistently treated you poorly that you say peace out and you walk away because, like, why keep doing business with somebody who's not being good to you?

[Matt]

Yeah. And on top of that, I'm sure you're probably thinking, Scott, well, it's just me, like little old me. How big of a change, how big of an impact am I going to make by myself? But you sent us a voice memo. You sent us a listener question. So think about the amplification that your voice is quite literally getting. But our advice is normally to not close old credit cards. And that's because the oldest cards that you have are typically helping you out in multiple ways.

[Joel]

Right.

[Matt]

So first of all, the older that line of credit is, the better it reflects on your credit score. You typically have a higher credit limit on those older cards as well that you've, you know, where you've handled them well, which benefits your utilization, utilization ratio. But then still, if you've been handling credit well for a while, ditching the card so you don't have to do business with A company who you know isn't making you the happiest, it's not going to cause much harm. I would say if this was like your app, your singular only credit card, or if it was by far your, your biggest credit line, I would be reluctant to see you do it because you know it could cause your score to drop pretty significantly. I'm thinking in the range of like 30 points or even more. I'm thinking of like a credit limit of. On this one, you've got, I don't know, $20,000. And then on your one other credit card that also happens to be a good bit newer, if it's only like 1200, that's a pretty significant drop in the amount of credit that's available to you.

[Joel]

Losing that amount of overall credit that you have access to is going to be a problem from a credit score perspective. But the truth is, what's going to happen is your score is likely going to drop by 10 to 15 points if you close this card, maybe even less. And you've got such a tremendously high score, it barely matters. I think it's worth pointing that out too.

[Matt]

What do you say? 820 to 8828 40. 8:40 range where you have these days.

[Joel]

Joel, do you know, I don't follow it that closely. I'm probably 780, 790, something like that. So I'm not as good as Scott. All right, Scott's got that one on me. But like, when we talk about it, 760 plus, that's essentially perfect from our point of view. And getting above that, it's not really going to add much to your life. So if you need to rent an apartment or apply for a mortgage, it makes sense to pay extra attention to your score. And even if you don't, it's always a good idea to kind of keep a loose eye on your credit score. But in this case, Scott has clearly paid close attention for a long time and this is just a minor move that's not going to do much damage at all, so.

[Matt]

Totally. Yeah. And you can also proactively take some steps to prevent some of the harm to your credit score by, let's say, opening up a new credit card before you cancel this old one. So I'm not sure if your amex is the only other card in your possession, but if so, it would be ideal to have at least two from just different credit card issuers in case that they were to cancel your card for some reason. Right. So opening up a new card and Then closing a card that can both temporarily harm your score. But again, you know, you handle your credit well. You've got a pretty high score. I'm not too worried about that. But if you're not sure what other card to get pretty partial to the 2% cash back card, Citi Double Cash. No matter what, you don't have to think about it. You're getting that 2% return every single time.

[Joel]

The Fidelity Visa, man, it's been the same thing longest card in my wallet for a long time. And yeah, you can play, play the game and sign up for more travel cards that offer superior signup bonuses if that's your jam. But if you're just looking for a replacement card that does like your average sort of best average card to use on a regular basis, not trying to maximize rewards, just maximizing everyday rewards. Yeah, Citi Double Cash and Fidelity are great for that.

[Matt]

It is worth the seeing what bonus offers are out there. Because if you're like, you know what, oh yeah, a few thousand dollars spend in a few months for most people, that's within reason. That could be a good instance to take advantage of one of those bonus offers. And I just thought too, we're talking about him decreasing the total amount of credit that's available to him. Also request a credit limit increase on your other card before you cancel the one card there. That way, when you drop off that segment of credit that's available to you, it's not as big of a ding. Again, that's something that you can do every, I don't know, every quarter or every six months or so. But the ability to get that as high as you can, because fact is, so sometimes they. There are like these default bump ups and oftentimes I don't think they're nearly as generous as how your income has increased and they probably haven't kept up with price you're spending. Right. So prices have really gone up. And so over time, it's almost like your credit available to you has almost decreased.

[Joel]

So your utilization is getting worse.

[Matt]

It's slowly and slowly. Yeah, it's like the water's turning up on the pot and the frogs just kind of like. Yeah, I don't know. This is getting a little uncomfortable, but I'm pretty used to it.

[Joel]

Yeah, and you're right. Proactively asking if you've handled your credit card well, often they'll give you a pretty significant bump up in that credit limit.

[Matt]

Totally.

[Joel]

All right, Matt, let's get to another question. This one is specifically about student loan debt. Wait for forgiveness or pay that sucker off quickly.

[Danielle]

Hi Matt and Joel, this is Danielle from Minnesota and I have a student loan question I could use your help on. I have a substantial amount of student loan debt which I am happy to have. It got me a great education at a great law school. It is about $370,000. I have the savings to pay it off, but I am considering paying off 270,000 of it and then paying the additional $100,000 off in five years with monthly payments. The issue that I'm having is that when I run the numbers, it appears that I would be better off paying the monthly payment under the pay as you earn plans over the 16 years that are left in the 25 year repayment whatever that the current loan law is. But I'm a little uncomfortable keeping the loans for 16 more years, paying the monthly payment and then paying the tax on the balance. My calculations show that I wouldn't ever be paying principal just interest. So then I would have a hefty tax bill at the end of these 16 years that are remaining in the lum's life. I am leaning toward paying off the loans because then I don't have to be beholden to any legislative changes that are going to happen or an increase to the monthly payments. But I can't get past that with compounding interest that I would end up better off not paying them off and paying a larger amount overall on the loans. I would love your insight on this because I have been going back and forth on this for a very long time and I think I need to actually make a decision. Thanks so much.

[Matt]

So Joe, we've never stopped a voice memo in the middle of its delivery, but I almost did and did. And I was about to Google like record scratch sound effect because what she said 370,000 about like fell out of my seat.

[Joel]

I saw your neck almost look broken over there.

[Matt]

I'm like what? That is massive.

[Joel]

That is a lot.

[Matt]

But it's for a good cause in the sense that she got that awesome law degree which is, it's really cool because she said she's happy to have the student loan debt, which I think is a really healthy outlook. Man. Like we've, we've talked. It comes up all the time when we talk about Ken Honda and his book Happy Money. But the ability to kind of happily part with money that you've earned, that's worked well for you, but that is then going to go out into the world to make other people happy and you're going to Receive a service or a product that's then going to serve you. That's how the world works, man.

[Joel]

And student loans get a bad rap and understandably so. Right. We talk about the headline amount of student loan debt which is overwhelming. We talk about individuals, even many older Americans with student loan debt that it didn't used to be the case. And you could talk about what came first, the chicken or the egg. What came first, expensive education or hefty student loans and the government's involvement in the student loan program. I don't want to go down that road, but I'm just saying it's tough not to. It is, it is. But student loans, yes, are a burden for many but it's also true the people who use student loans effectively to get a degree that's going to pay off for decades of higher earnings. If you're prudent about your use of student loans and you're thoughtful about your course of study and it can be an amazing way to actually get a head start right on your financial life. And so I agree. Matt, I love Danielle's perspective here. Student loans can be a good form of debt. How else would you as a 17 year old or 18 year old qualify for a loan based on a high school degree? Like you wouldn't. Student loans are an effort to allow people to get that degree that's going to give higher earnings without really having any sort of collateral to show for it.

[Matt]

That's true. Uh huh.

[Joel]

Yeah.

[Matt]

It's that quote unquote good debt. But let's give a little more context here because in Danielle's email she mentioned that she, and this is all really important information. I think that's why, that's why we're sharing it here. But she owns a house, she's already saved for her kids college and she's also contributing as much as she can to, to retirement accounts. And so like student loans are her only major financial hurdle that she has to tackle and she's got the cash on hand, she's got the, the money to be able to toss up the whole thing now if she wanted to, which is just incredible. So it's worth highlighting the fact that you know, despite this incredibly mountain high level of student loan debt that you have a world of options at your disposal because you've handled your finances.

[Joel]

So thoughtful. I think if I were Danielle here, I'd want to pay up that student loan debt as soon as possible. And that's because the average interest rate for recent graduate student loans is close to 8% and yes, if you play your cards right, that debt can be forgiven. I would say this, too. I wouldn't necessarily be worried about legislative changes or a president doing something that's going to put your student loan forgiveness at jeopardy. When changes are made, current beneficiaries are almost always grandfathered in. PSLF was not taken away, for instance, once the Trump presidency ensued. That was something people were worried about, but I think needlessly so still keeping that debt around for 16 years to achieve forgiveness, when you still owe tax on the forgiven amount, I think it makes it not all that appealing.

[Matt]

Yeah, I want to go back to, I guess to the context as well, because the first thing that came into my mind, I think for most folks when they're hearing her say all this, is that, oh, man, think about all the other things you could potentially do with that money. And so I think that's when like, so let's say, for instance, she didn't have a house. Let's say she had never saved for retirement, let's say, and same for kids, college, that's optional. But the fact that she's also already done that, that's like, that's icing on the cake. But when you consider the opportunity cost and having cash on hand to be able to get some of these other plates spinning, that's what you have to consider. But again, in her case, she's already done all those things. And so this is sort of the next thing as she's looking down the list of the things that she wants to bring into her life, or in this case, eliminate from her life. I think that's one of the biggest, best things that she has going for her. It would be a completely different conversation if she didn't have retirement, specifically that one in place house. That's just, I mean, that's more like lifestyle stuff right there. But because she has, I think that's another reason that you can start thinking through, well, what do I want? Like, what bothers me the most? And it seems like that this is absolutely rising to the top of the list, really.

[Joel]

She's been waffling on it for a long time. I think the pros of keeping the debt around are that you wouldn't have to pay off the whole balance. It's always nice to get something for free. You'd almost assuredly be better off from a pure ROI perspective if you were to pay the minimums and then get forgiveness 16 years from now, you'd pay less money overall on those loans. And that is for sure enticing. But it also, I don't think it means, especially in your case, Danielle, that it's the best course of action because the forgiveness tax bill that you would get after the fact could be enormous, especially if the balance is growing over time as you make minimum payments. And yeah, I think again, we'd be having a different conversation if this student loan were more of a burden to you. Yes, it's a massive number, but you've also been so diligent with your finances that you can get rid of it in shorter or you could actually get rid of it today based on what you said in the voice memo. You're going to allow some of it to linger just a bit, I'm assuming to have cash on hand for other purposes. But to me it means, yeah, why not get rid of this thing? Why drag it out for 16 years?

[Matt]

Totally. There's just something mentally freeing about getting the student loan debt out of your life quickly that I think is going to allow her to more easily crush other financial goals and other life goals that she has for herself. And so because of that and the emotional toll that just keeping this around for 60 more years that that would cause, man, I would totally say to go pay that lump sum, the 270, and then stick with that five year payoff plan where you're going to do the, that final 100k. And the fact that she has a plan, it's just incredible. Tells me that she's mapped this out right. Like she has analyzed it. And with that in mind, I think she's more looking for our blessing. So I give you my blessing same to do exactly what you have planned out. Because you sound very intelligent and I think you are. You're approaching this so strategically that like, I've never been so happy for somebody that has $370,000 worth of state loans debt. But I, I'm really happy for her because of how she's approached this problem.

[Joel]

And I think we might have some hyper optimizers out there in the listening audience and they might write in and please do and say, guys, what are you talking about? She could pay the minimums and get forgiveness and blah, blah, blah. And like 16 years from now she's been able to accomplish all these other financial goals and there's some truth to that. But 16 years is also, that's a really long time. And if you've got the ability to kind of get rid of it in short order, that's what I would do.

[Matt]

Well, speaking of optimizing, we're going to hear from a listener who's looking to make the most of his hsa. We'll get to that more right after this. This message is sponsored by Navy Federal Credit Union. As the holiday season rolls around, Navy Federal knows that you strive to do everything you can to bring cheer and joy to your loved ones. And as a credit union dedicated to serving all veterans, active duty and their families, they understand that every little bit counts.

[Joel]

That's why, for a limited time, you could earn a $250 cash bonus when you spend $2,500 with Navy Federal's cash rewards and cash rewards plus cards in the first 90 days. But the giving doesn't stop there. You could also earn up to 2% unlimited cash back with these cards, so saving up for whatever the season brings just got a little easier.

[Matt]

GiveJoy GetJoy join now at navy federal.org at navy federal Credit Union, the members are the mission. Navy Federal is insured by NCUA. Visit Navy federal.org cashrewards for details. Cash back terms and conditions apply. Offer ends January 1, 2026.

[Joel]

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[Matt]

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[Joel]

Whether you manage one property or 10, Lodify helps you run your rental like a real business. How to Money listeners get 20% off with code how to money25.com as you make financial progress, you might be tempted to abandon habits that helped you make that progress in the first place. But guesstimating and a lack of awareness that can lead to leaving money on the table. That's where Monarch comes in. I dig Monarch because it helps me keep my finger on the pulse of every facet of my money. Spending, saving goals, net worth. It's all in one place and it helps keep me motivated to keep going.

[Matt]

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[Joel]

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All.

[Joel]

Right, Matt, we're back. Time to get to the Facebook Question of the week. This one comes from listener Steven who says, happy open enrollment season. Yes, it's everyone's favorite time of year. He says More of a general question. Can investing inside your HSA fully subsidize your medical expenses in long term, like the 4% rule? But for medical expenses, I currently have $36,000 invested in my HSA and plan to fully contribute and invest in the S and P for the next decade. Assuming contribution limits don't increase. They're currently at 8,550 for a family, $8,550 and the S&P increases at 10% annually. My back of the napkin math indicates I'll have over $200,000 by then. @ that time, the interest from the investments, assuming 10% growth, will be more than enough to withdraw my out of pocket maximum and still have plenty left over to grow. This is a bit oversimplified, so let me know if I'm not considering anything and if this is a good plan.

[Matt]

Dude, I like it. Stephen.

[Joel]

I think it's a fun way to think about HSAs.

[Matt]

Yeah, well I've thought similarly about my Daffy account, my donor advised fund, and I'm sure listeners have started to hear the voices for Good Challenge and the Daffy app.

[Joel]

Go donate to some of our favorite nonprofits and help us defeat Stacking Benjamins.

[Matt]

And basically we've been talking about Daffy and how great they are before. They're like, you guys want to partner up, so full disclosure there. But in a similar way it's like, oh, can I get enough within that donor advised fund where essentially your giving is done off of the earnings that are being thrown off from that initial investment. And that might be able to be.

[Joel]

The case here, right?

[Matt]

It's fun to see your balance grow which then allows you to give even more money away. But for your specific question, Stephen, if you are paying for health care costs out of pocket while while you are funding your hsa, I do think this is totally possible to hit that metric. I'M not totally sure, like I'm not going to count on that 10%.

[Joel]

But I think this is really. It's a thought exercise.

[Matt]

It's a thought exercise, but, but it's a fun one. The exercises are dependent on your, your interest rate that you are expecting. And there's a big rate of return. Yeah, I'm sorry, your rate of return. There's a big difference between a 7 or 8% rate of return and 10. If it was 10, I would have.

[Joel]

Retired a few years ago.

[Matt]

Yeah, well, but I'm not taking a double digits return on my money into account when I'm looking ahead to future projections.

[Joel]

Well, this is, this is, I think though, what's so beautiful about the HSA if you use it properly and it's why we talk about it regularly and why we're so keen on people using this account. Well, yes, we're operating on a lot of assumptions here, but the goal of the theory is not to get specific. It's a broad question. So there's just so many potential caveats about potentially lower returns or higher healthcare costs that you might incur. I think it's just important to put a little footnote in there about that. Think about those things. But the money you stick into your hsa, if left untouched for a decade or two. Yeah. It really could grow to cover all your healthcare expenses. And you know, you'll also be able to withdraw that inflated sum without paying any taxes either. Which rocks if you're talking about keep those receipts. Yeah, exactly.

[Matt]

Just document it.

[Joel]

We've got articles and information up on howtomoney.com about how to use that HSA effectively. But unlike your traditional 401k or traditional IRA where you've got to think about paying tax, paying Uncle Sam on those withdrawals, you don't have to do that with the hsa. So like the amount that you have in the account is the amount that you have access to in a super flexible way. It makes that account even more beautiful not having to pay tax ever on that money. Heck yeah.

[Matt]

Well, and not to mention that even if you save, quote, unquote, too much, well, at a certain point the HSA turns into a glorified IRA. Specifically at age 65, if you encounter over funding that account, which isn't a real problem, that's actually something that you don't need to concern yourself with. So the flexibility and the tax protection that your HSA offers really does make it an account to fully fund. If you have the additional funds on hand to be able to Pull that off. I think this is a brilliant move.

[Joel]

Yeah. Cool way to think about it. I think, Steven, it's probably even more motivating to invest in that HSA when you're thinking about, hey, wait a second. One of these days, the earnings are going to throw off everything I need for healthcare expenses, and I can just continue to grow that nest egg inside of my HSA and avoid tax the whole way through. That's pretty cool.

[Matt]

Heck, yeah. Shall we get back to the beer that you and I enjoyed?

[Joel]

We shall.

[Matt]

You know what I realized? I kept looking over at the can while we were talking about money, and we both commented on the artwork.

[Joel]

Right.

[Matt]

And you know what it reminds me of?

[Joel]

What?

[Matt]

You know when you were in, let's say, second or third grade, and you drew an underwater scene with your crayons, and then you paint the whole thing with, like, a dark blue. And then the water, the watercolor, it slicks right off of the wax and only sticks to the paper. That's what this reminds me of.

[Joel]

Yeah.

[Matt]

Doesn't it kind of look like that?

[Joel]

Yeah, I can see that.

[Matt]

All right. I thought you'd be more excited about that.

[Joel]

I think it looks cool. I like art on a black background, too. Like, it just pops through. So have we ever talked about the.

[Matt]

Dr. Seuss artwork that we went and.

[Joel]

Gosh, this is forever ago. Key west, right?

[Matt]

This was so. We hadn't even started the podcast, and we were unm. Kate and I, we both had our first kids. They were like three months old. And we took a trip down to Key west during Thanksgiving break, and we went into a gallery that had a bunch of Dr. Seuss, some of his artwork that was not necessarily for kids.

[Joel]

It was awesome.

[Matt]

It was awesome, but it was all very moody and all the backgrounds were black, and I thought that was the coolest thing.

[Joel]

It was so cool. Yeah. So cool.

[Matt]

It's hard not to think about that one.

[Joel]

What did you think about the liquid inside of the can, though?

[Matt]

So good.

[Narrator]

The body.

[Matt]

So it poured thick, it drank thick. It had so much flavor. And I think that's one of the things you get with an unfiltered ipa. Double. Was it double dry hopped?

[Joel]

It was like concentrated unfiltered.

[Matt]

Yeah, Double ipa. Dry hopped with citra. Some other names of.

[Joel]

Yeah, some hops I don't recognize, but they sound like they're ones Raka.

[Matt]

Maybe Zamba.

[Joel]

Maybe they're hops from Australia or New.

[Matt]

Zealand, which maybe we're gonna get more of these things.

[Joel]

To me, those. For some reason, the Australian and New Zealand hops. When I have those in beers, they're just instantly some of my favorites. And this I need to look up to see whether those hops were actually grown there. But my goodness, this was a delightful beer.

[Matt]

It was so good.

[Joel]

The hops were a little funkier, and this was, like, piercingly juicy. It also just had that sort of note, which doesn't happen very often in ipa. It's usually where it, like, pierces the back of your throat kind of.

[Matt]

It's very full flavored.

[Joel]

Yeah.

[Matt]

And not in, like, the overly harsh, bitter way for me.

[Joel]

Punchy.

[Matt]

It had depth like. Like sometimes like a sports drink. It's got salt sodium in it. Right. And it makes it wetter or something. Like, there's something about. About that that just, like, quenches the thirst a little more. That just feels like it. Like it's been formulated to absorb into your tongue or something like that. And I feel like that's what this beer is. I don't know if that's what it's actually becoming. One with Jeremy's Changed by Fonta Flora. Highly recommend this beer for sure.

[Joel]

It was great. It was very, very good. All right, that's going to do it for this episode. You can find show notes up on our website at how to money. And if you've got a money question, holler at us.

[Matt]

We would love to hear it. That's going to be it for this one, though, buddy. So until next time, best friends out. Best friends out. Hey, it's Matt. Joel's also here, and we are fired up because we are back in another charity challenge. If you've been with us for a while, you might remember the last time Joel and I, we went head to head. I may have come out on top.

[Joel]

Don't rub it in. All right, you did win, I'll give you that. But this year, we're teaming up in Daffy's Voices for Good charity Challenge, competing with other podcasters to see who can raise the most for charity.

[Matt]

Yeah, for me, that means supporting GiveWell's top global health charities, like malaria nets and vitamin A supplements that save lives for just a few bucks.

[Joel]

And I've chosen fire, which defends free speech, undue medical debt to wipe out medical bills for families, and the Hope Effect, which is changing the way the world cares for orphans.

[Matt]

And the best part, we are matching donations so every dollar you give gets doubled. And if you donate by December 2nd, you'll be entered to win a trip for two to the 2026 iHeartradio. Music Festival in Vegas. So head to Daffy.org voicesforgood find our campaign and donate. That's Daffy.org voicesforGood Hiring isn't just about.

[Sponsor/Advertiser]

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[Matt]

This is an I Heart podcast.