Friday Flight - Appealing ARMs, Iterating Investments, & College Cost Cuts #960

Summary

How to Money Podcast Summary: Friday Flight - Appealing ARMs, Iterating Investments, & College Cost Cuts #960

Release Date: March 21, 2025

In episode #960 of How to Money, hosts Joel and Matt delve into a variety of pressing financial topics, including the nuances of adjustable rate mortgages (ARMs), strategic investment adjustments amidst market volatility, and innovative approaches to reducing college costs. This comprehensive discussion provides listeners with actionable insights and expert advice to navigate their financial journeys effectively.

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1. Navigating Consumer Tactics Amid Tariffs

The episode kicks off with a conversation about how companies may leverage potential tariffs to accelerate sales. Joel shares a personal anecdote:

Joel [03:29]: "So, but hey, we're going to honor that price for now. You just got to let us know asap."

This tactic prompts consumers to make quicker purchasing decisions to avoid anticipated price hikes. The hosts caution listeners to evaluate the necessity of their purchases critically and resist high-pressure sales tactics that may not reflect actual cost increases.

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2. The Housing Market: Adjustable Rate Mortgages (ARMs) Explored

Joel and Matt shift focus to the housing market, discussing the rising costs of homeownership and the role of ARMs in alleviating monthly financial burdens.

Matt [04:32]: "Buying a house today is an expensive endeavor. I think that's the understatement of the century."

Key Points:

• ARMs vs. 30-Year Fixed Mortgages: ARMs offer lower initial interest rates compared to fixed mortgages, potentially increasing housing market liquidity.

  Matt [05:01]: "Contract, things might be flowing a little bit more and it's going to get you a lower rate, but it won't be locked in for forever."

• Pros and Cons of ARMs: Suitable for buyers planning short-term homeownership or those prepared for potential rate adjustments in the future.

  Joel [06:06]: "If you can get a significantly lower rate by opting for an ARM and let's say you're at least banking ahead, you're planning ahead for potentially higher rates down the line, it's an okay move."

• Political Influence on Housing Supply: The Trump administration's proposal to utilize federal land for housing aims to increase supply and reduce costs.

  Joel [07:39]: "The Interior Department and HUD are set to work together in an attempt to increase housing supply by allowing building on federal land that's underutilized."

• Regional Housing Trends: Contrasting Austin's declining rents due to a construction boom with California's stagnant housing affordability hindered by the NIMBY (Not In My Backyard) movement.

  Matt [09:07]: "We will continue to see population declines from California and increases in states like Texas where there has been increased supply."

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3. Strategic Investing Amid Market Volatility

Addressing recent stock market fluctuations, Joel and Matt emphasize the importance of maintaining a long-term investment perspective and avoiding reactionary decisions.

Joel [13:13]: "It's a bad idea to make any changes right now."

Key Insights:

• Behavioral Finance: Investors often react emotionally to market downturns, leading to poor investment choices. The hosts urge listeners to stay calm and adhere to their investment strategies.

  Matt [13:37]: "Folks politics can get in the way of their investing... That's like on one hand we'll say oh no, no, the volatility is par for the course."

• Dollar Cost Averaging: Consistently investing a fixed amount irrespective of market conditions can mitigate risks and capitalize on lower stock prices.

• Visualization Techniques: Connecting with one's future self can reinforce investment discipline. Joel mentions a Fidelity study where visual prompts increased long-term investment behavior.

  Joel [17:33]: "People with low balance savings accounts were 14% more likely to invest in a long-term savings product when they received a notification with language prompting them to think about the future first."

• Avoiding Knee-Jerk Reactions: Historical market resilience, from the dot-com bubble to the Great Recession, highlights the benefits of staying the course.

  Matt [16:07]: "It was like within the current administration... something's got to change."

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4. Redefining Travel and Hospitality Finances

Joel shares personal plans for a summer road trip with his family, highlighting cost-effective travel strategies like using Airbnb.

Joel [21:28]: "Head towards Seattle for my cousin's wedding by car. I'm already plotting all the different Airbnbs we can stay at along the way."

Discussion Points:

• Airbnb Hosting: Matt discusses the benefits of hosting on Airbnb to earn extra income while traveling.

  Matt [22:10]: "There's nothing like a cross country road trip during the summer months. And staying at Airbnbs is a great way to experience all the different towns and cities on the road."

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5. The Allure and Pitfalls of Exclusive Private Clubs

Exploring the surge in high-cost private clubs, particularly in Miami, Joel and Matt critique the trend of exclusivity tied to hefty membership fees.

Matt [23:28]: "Man, I thought folks who I knew that were joining golf clubs this time of year."

Key Observations:

• Cost vs. Value: High membership fees often don’t correlate with proportional benefits, leading to questionable financial decisions.

  Matt [24:08]: "You want to join the elite, you got to fork over a $9,000 joining fee and then of course, many thousands in fees every single year as well."

• Conspicuous Consumption: The hosts advise seeking meaningful connections through affordable means rather than expensive club memberships.

  Joel [27:33]: "Instead of just drinking the fancy wines."

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6. Optimizing Daily Expenses: Services vs. DIY

The conversation turns to the growing trend of outsourcing mundane tasks, such as hiring someone to wait in line, and its implications on personal finances.

Joel [28:50]: "You can use sites like TaskRabbit or skip the line. I'm curious from your point of view, man, would you pay for that? I guess no, you wouldn't."

Insights:

• Value of Time vs. Money: While outsourcing can save time, it often leads to unnecessary expenditures that don’t offer significant value.

  Joel [29:24]: "Which means if I want to keep doing that, it just means my grocery bill is going to inflate."

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7. Tackling Higher Education Costs

Joel and Matt address the escalating costs of college education and present strategies to minimize financial burdens.

Matt [32:08]: "The decision to get a college degree is less clear cut than it used to be."

Strategies Discussed:

• Negotiating Financial Aid: Highlighting success stories like Sierra Billy, who secured free education through relentless negotiation.

  Joel [34:22]: "She locked horns with the financial aid department. She started negotiating with them, pushing back on what they were offering her."

• Free Education Programs: Harvard’s expansion of free tuition for families earning under $200,000 signifies a positive trend towards affordability.

  Matt [32:28]: "They're just waiting to get a solid arsenal of reviews before they, like, double the price."

• Resource Utilization: Encouraging the use of tools and websites that list colleges offering free degrees to help prospective students make informed decisions.

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8. Smart Choices in Cell Phone Services

The hosts examine T Mobile's planned price hikes and explore more affordable alternatives without compromising service quality.

Joel [36:18]: "But when the big cell phone providers say, hey, prices are going up, it's so easy to say, not for me they're not."

Recommendations:

• Switching Providers: Emphasizing the potential savings by moving to smaller carriers like Mint Mobile, Boost Mobile, or US Mobile.

  Matt [37:50]: "The great thing about switching cell phone providers too is that you save a ton of Money, but you're not downgrading in a serious way."

• Assessing Trade-Offs: Balancing cost savings with service quality to ensure essential needs are met without overspending.

  Joel [39:10]: "Your shoes at Walmart or pay less versus one of the name brands, it's not the same."

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Conclusion

In this episode of How to Money, Joel and Matt provide listeners with a wealth of knowledge spanning housing, investing, education, and everyday expenses. By dissecting complex financial topics and offering pragmatic advice, they empower individuals to make informed decisions that align with their long-term financial well-being.

Listeners are encouraged to stay informed, question high-pressure sales tactics, opt for strategic financial products like ARMs when appropriate, maintain a long-term investment perspective, and seek out affordable alternatives in various aspects of life. These strategies collectively contribute to building a resilient and prosperous financial future.

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Notable Quotes:

• Matt [04:32]: "Buying a house today is an expensive endeavor. I think that's the understatement of the century."
• Joel [06:06]: "If you can get a significantly lower rate by opting for an ARM and let's say you're at least banking ahead, you're planning ahead for potentially higher rates down the line, it's an okay move."
• Joel [17:33]: "People with low balance savings accounts were 14% more likely to invest in a long-term savings product when they received a notification with language prompting them to think about the future first."
• Matt [32:08]: "The decision to get a college degree is less clear cut than it used to be."
• Matt [37:50]: "The great thing about switching cell phone providers too is that you save a ton of Money, but you're not downgrading in a serious way."

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For more insights and personalized financial strategies, tune into future episodes of How to Money and visit howtomoney.com.

Transcript

[Joel]

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[Matt]

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[Joel]

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[Joel]

Welcome to how to money. I'm Joel.

[Matt]

I'm Matt.

[Joel]

And today we're talking about appealing arms iterating investments and colleges cutting costs.

[Matt]

And by arms, Joel, you are not referring to your incredible physique.

[Joel]

They look amazing, don't they?

[Matt]

No. We are going to talk about adjustable rate mortgages and this is our Friday flight, the roundup of different news stories we came across this week and specifically how we think they're going to impact your bottom line, your money. This might be the first week in a few weeks, Joel, that we don't talk about tariffs here on the show and the the crazy impacts that it may or may not have.

[Joel]

I appreciate you saying that on our economy, but I think we're going to for just one quick second.

[Matt]

Okay.

[Joel]

But no, we won't go deep into tariffs because there hasn't really been much going on this week on the Terrafront, fortunately. But my mom received a text message from a company. She was looking to get some new blinds in the house for a couple windows. And the blind company she considered like, is it blinds.com? i don't remember.

[Matt]

I'm pretty sure that actually is a company, but I literally just kind of made that up because they're real.

[Joel]

I feel like I've heard of them. Yeah. But I think she was going through a provider that she sourced through Costco and they came out and they measured and they'd given her a quote. This was like, I don't know, month and a half ago, something like that. And they sent her a follow up text message to say, hey, we know that you haven't purchased blinds yet from us. Just to let you know, prices are going up 20% next week because of tariffs. No way. So, but hey, we're going to honor that price for now. You just got to got to let us know asap.

[Matt]

So the question is, are they really going to hike the price or is it just a hard.

[Joel]

Yeah, that's what I was wondering.

[Matt]

Hard selling or I think they're going.

[Joel]

To get a lot of people to book just to say like, okay, cool, I'll sign on the dotted line because I don't want to pay 20% more. My mom was like, yeah, the quote was kind of expensive anyway, so I'm not doing it. Okay.

[Matt]

But just does she already have some blinds up? Curtains? I don't know.

[Joel]

What do you say? I think they're blinds. I don't know. I don't know what a Roman shades or something like that.

[Matt]

Oh, fancy.

[Joel]

I'm not sure.

[Matt]

But you know what I think are overrated. Sorry. Total. Sorry. You finish your thought?

[Joel]

No, I'm just saying I think this is a tactic that more companies are going to use.

[Matt]

Yeah.

[Joel]

And I think some people are going to be like, it's going to accelerate a purchase that people might otherwise not have made. And I'm not saying that that tariffs won't make things cost more. I think they will.

[Matt]

But whether or not those tariffs come to be, I think that's the real question.

[Joel]

Yeah. And how badly do you need this thing? And can you just say, ah, no, I'm not interested. Thank you, but no thank you?

[Matt]

Yeah. Well, you know what else is pricey? Joel Homes. Buying a house today is an expensive endeavor. I think that's the understatement of the century. Not the century, maybe understatement of the past decade.

[Joel]

I'll say.

[Matt]

As we've seen house prices rise, they remain elevated and interest rates are still near 7% on 30 year mortgages. And one way to reduce your monthly obligation is to opt for an ARM instead of a 30 year mortgage. There is a recent Bloomberg article and they pointed out to the potential rise of arms and how that could help grease the wheels of the housing market a little bit.

[Joel]

Yeah, like if more people opted for them, that, hey, we might, we might see more listings and houses go under.

[Matt]

Contract, things might be flowing a little bit more and it's going to get you a lower rate, but it won't be locked in for forever or you know, for the life of that loan. This means that you'd be leaving yourself financially exposed at the end of that fixed term. So oftentimes we're talking about like a five year term, like a five, one arm. But they can be a reasonable choice for some folks out there, especially if you're not planning on being in that home too much past the initial fixed term or if you understand the trade offs, if you're willing to endure a potentially higher interest rate down the line. But man, you got to be careful. You got to weigh the trade offs. You need to choose carefully. Were you planning to share how you opted to go with an arm?

[Joel]

I can, I did.

[Matt]

What you're planning to. I mean it's, I think it can be a, it used to not be a smart decision. Right. Like 10 years ago, why would you opt for an ARM? Interest rates were at like rock bottom lows and the ability to opt for an eighth of a percent discount over the 30 year fix, that was dumb. Right. But now it's like, okay, there's more of an ability to save. And just given the fact that there's a higher likelihood of rates going down in the future, it's not guaranteed.

[Joel]

Yeah, but, yeah, but it's interesting. Rates continue to drop until just a few years ago. And so some people who did, let's say take out an arm 10 years ago and then five years in, they were like, my rate's looking sweeter now. I'm kind of glad I went for the arm. And then they sell that like they were just paying a lower interest rate the whole time. Even though a 30 year fix would have been better. I opted for a 10, one arm, Matt. So I like that. Greater security, like a decade instead of just five years.

[Matt]

But only because the Better time period too because when you're closer to five, it's like, well, we don't want you buying and only staying there for five years anyway. Like you need, you need to get past that five year. I like that. I like the 10.

[Joel]

And I didn't know if I was going to be in the house for, for 10 years or 30. But I can cross that bridge when I come to it and I can pay down the mortgage more quickly if I want to or I can also refinance into another type of loan. I think I used to be kind of like blinders on. 30 year mortgage, 30 year fixed is the only way to go. And I think for most people that's probably still the smartest move. But so much depends on the discrepancy in rates. And if you can get a significantly lower rate by opting for an arm and let's say you're at least banking ahead, you're planning ahead for potentially higher rates down the line as that, that mortgage rate adjusts. I think it's an okay move. You just have to go into it with eyes wide open. So that's what I did. It's worked out well so far. We'll see, we'll see how it goes seven and a half years from now. But let's talk about good political money news, Matt. A recent move from the Trump administration could bring down costs on housing using federal land specifically to build more units. That was a proposal that was made this week.

[Matt]

I've always wanted to live in Yosemite Valley, Joel.

[Joel]

Wouldn't that be nice?

[Matt]

Just set up right there next to Curry Village.

[Joel]

We'll see if they make that land available. Unlikely.

[Matt]

Probably not.

[Joel]

But it does look like the Interior Department and HUD are set to work together to in an attempt to increase housing supply. But by allowing building on federal land that's underutilized. Right. And the truth is we need more supply. We've talked about this for years, how we're millions of homes shy in this country of what we actually need. I was just in Austin, Matt. It was fascinating to hear from folks how much cheaper it's become to live in Austin over just a short period of time, really in just the last like year, rents have declined by 22%. I think something like that from from peak Austin, thanks to this boom in building. Like I was driving around, I'm seeing unfinished apartment complexes everywhere. They are continuing to, to build and now the incentive is, I don't know, it's not quite there for the builders. So Austin renters now have more negotiation power. And a lot of apartment complexes are offering months of free rent to entice people to come over. It's interesting, though, California is taking the opposite approach. Some people are saying that in the aftermath of the wildfires, it's a great time to prioritize building some density, like adding more units. But the NIMBY movement, the not in my backyard movement, is doing what they can to prevent that. And so a lot of folks in California say, well, we want more housing affordability, but we don't want to do what it takes to get there. We don't want more units because it might reduce the value of my house.

[Matt]

You don't want to kill those expensive California vibes, Joel.

[Joel]

Right. Yeah. And they're not, trust me. And so I don't know. I was in Austin and I saw this poster, Matt. It said 25% of housing costs are due to government red tape. I think it was from, like, realtor.com or something like that. And I think it's likely much more than that in California. I would love, love to see California take a pace from Texas on this. I think a lot of young folks in particular would benefit. Think about when you bring down the cost of housing, you bring down that barrier to entry and you reduce that line item in people's budget, especially for young folks. It's a massive win.

[Matt]

Totally. Yeah. And until then, we will continue to. Most likely, we will continue to see population declines from California and increases in states like Texas where there is. Where there has been increased supply.

[Joel]

Yeah, It's. So much of that is like government regulation. And if you just dial back some of the building codes and stuff like that and make it easier for. For builders to create new supply, they'll do it.

[Matt]

Yeah. Well, the lawsuit against the NAR like that looked like it might have had a meaningful implication on closing costs and Realtor commissions specifically talking about greasing the wheels of housing. But that hasn't panned out, at least not yet. It's been about six months since those rules have changed, and the average buyer commission has gone from 2.37%. Drumroll 2.36%. Yes. It's barely budged. So not dramatic, which is great news for worried realtors out there, but bad news again for all the buyers who are looking for ways to reduce some of these transaction costs associated with buying a house. But know that as an individual, you have the power to push back, to discuss the commission structure with a potential agent. You don't just have to fork over 3% of the purchase price by default.

[Joel]

Just because that's the way it's always been done. Yeah.

[Matt]

And I think this is an area too where I think just the technology that's associated with the transaction, transaction costs and just the buying and selling of homes, that's an area where I'm hopeful. And man, I just think of it feels like such an antiquated old model, old way of doing things. And given the pressure, given the fact that there is an entire generation wanting to purchase a home where they're finding that harder and harder to do, I feel like something's got to change.

[Joel]

Yeah, no, I agree. And it's interesting when you look at the, where the commissions are coming down the most, it's on higher end homes. So those, I'm not sure if it's just that those buyers are more informed and they're like, no, I know what happened in that legal ruling and I'm going to, I'm going to ask for a discount here or if it's just because the commission is steeper on that and so realtors are more willing to offer a price cut, I got to think. So that's, it's got maybe a little bit of both.

[Matt]

Yeah. They're like, okay, it's, I know it's a $4 million house, but, well, let's do commissions like it's a $2 million house. Like either way, that's a, that check, right?

[Joel]

Yeah, the agent's still making good money on that. Matt, let's talk about investing investors. They're shaking things up right now given the economic actions of the Trump administration. Recent stock market volatility. The Wall Street Journal just profiled some folks who are making meaningful changes to their investment portfolio in light of recent volatility. They're saying don't like that. Yeah, they're like, I'm not sure. This doesn't look so good. I might need to do something different. And it doesn't seem like based on their investigation that this activity is widespread. I don't think people are knee jerk selling right and left, but that doesn't mean it's not concerning. Gold and cash in particular have been garnering more interest as stocks have kind of sort of, I'm not going to say free fall, but they've been going down, right? Stock prices have been going down or at least they've been more volatile. I guess we're back down to essentially where we were at least in the s and P500 about six months ago. International markets, those are also receiving more interest from people who are more US centric focused in their investments too. And it does seem like this at least to some extent does fall along party lines. But I think no matter where you land politically, the goal is it should be to tune out the noise and to not make knee jerk changes. I guess I'm just worried about people seeing something like a 10% drop which feels existential, but especially for so many how to money listeners who are in the wealth building phase of their life, they're early on. It's a bad idea to make any changes right now.

[Matt]

And I also hate too that it does seem to be following along party lines. And this is where unfortunately I think folks politics can get in the way of their investing. Because it's like on one hand we'll say oh no, no, the volatility is par for the course. But I understand when there are, when there's a subset of half of the population who looks at this and say well no, this is volatility that is not necessary. It feels like like an own goal.

[Joel]

Yeah.

[Matt]

Like within the current administration. And if you are not optimistic about where things are going. I totally understand a lot of folks hesitant behavior when it comes to investing in the market. But I think zooming out and gaining a better, just a better perspective is so important when it comes to times like these. I think back to like we might have a lot of listeners and they weren't even alive during the dot com bubble bust or whatever, but that was like the end of the world. And then not Too long after Y2K.

[Joel]

Was literally the end of the world.

[Matt]

Yes, there's a whole lot happening back there.

[Joel]

Like satellites could be falling out of the sky, crushing us in our sleep.

[Matt]

And then the Great Recession, like these were like literally end of the world, the sky is falling type of scenarios. But then what happened? Things rebounded. The problem though is that you can't look ahead to see what's, you can't see what's coming down the pike. Right. And so but like when we invest we are inherently optimistic about what's going to happen. And then, and so now because of what has happened over the past 15 years regarding the market and where the economy has gone, like you look back to Y2K, you look back to the 2000s.combust, you look to the Great Recession and they look like tiny little speed bumps compared to where the market has gone since then. And like even Covid like that was creating more uncertainty than you know, the scattershot tariffs that were currently been threatened. At least the stock market was sinking much faster. The future was highly uncertain. But folks who made reactionary moves back then ended up being proved wrong fairly quickly. So ultimately, the key to a brighter financial future is to invest more. And that's the thing. These days, your dollar cost average purchase of an index fund is better than it was a few weeks ago. You are getting wealthier ultimately, by staying the course and just know that you're buying, buying at a discount.

[Joel]

Yeah.

[Matt]

Remember that.

[Joel]

What it makes me think, Matt, is that we live in such a society that we talk about politics a lot more. Think even about late night comedians. That used to be the. Yeah, they used to like tell jokes about, you know, daily life and they used to have on entertainers and stuff like that. And now there's so much discussion of politics in what feels like every realm of our lives 24, 7 news cycle.

[Matt]

I think that has a lot to do with it as well. The fact that folks are so glued to the headlines and every. And gosh, we talk about the democracy of investing and so the ability just to pull out your. You whip out your phone and you can make a trade or you know what? I was thinking about buying, but now I'm not going to. Actually, I'm thinking about selling. Just that knee jerk response to what happens to be tweeted or truth or just whatever. Like that day is a terrible way to invest your money.

[Joel]

And it can always feel like the sky is falling if you're paying attention to the headlines on the reg. And we're here to say that it's not. And that, yeah, you want to have a plan for your money and for your investments so that you're not making kind of moves on the fly. You know where you're going and you know why you're doing it. Matt, there was this old Fidelity study that you and I have referenced over time as well on investing. And it showed that seeing essentially like a digital rendering of what you would look like in 30 to 40 years, how it could impact your willingness to invest. Now I believe you and I took a picture on that app and we should repost that on Instagram.

[Matt]

I forget what it was called.

[Joel]

We look good older. I think I was happy with it. We're going to be hot grandpas someday. But the reality was seeing what old you was gonna look like, it was gonna create more empathy and it was gonna cause a realization, right, that you're actually gonna be old someday. Cause there's something about being in your 20s and you're like, yeah, I'm gonna live forever. Hey, Grandpa, get out of here. It's like, I'm never gonna be that. But you are. That's just how the world works. And now there's new data that essentially reinforces this fidelity survey from a long time ago. There's a study from Sweden and it found that people with low balance savings accounts were 14% more likely to invest in a long term savings product when they received a notification with language prompting them to think about the future first. Just a notification, Matt.

[Matt]

Like, hey, just a prompt.

[Joel]

Guess what? Little prompt, minor prompt. And I think it makes sense. Right? Like let's use this sort of information to our advantage, realizing that we have a hard time thinking about the future and empathizing with our future selves. I think it's important for how to Money listeners to find a way to keep their why behind investing top of mind. And I think visuals can help. Whether that's literally doing the. Was it the old FI app or whatever it was called?

[Matt]

Something like that. Yeah.

[Joel]

And taking a picture and making yourself look old and then posting that somewhere in your room. I don't know what you need to do.

[Matt]

Make it the wallpaper on your phone.

[Joel]

Yeah. Or like sending a monthly alert, hey, you're going to die someday. Right? Or, or keeping some sort of like faux metal skull on your dresser. I don't know what it is for you that's going to help remind you that you are going to get older over time. But I do think that that sort of visualization and connection to that, to that truth can help you stay the course and potentially even bump up your investing percentage.

[Matt]

Totally, man. And this makes this reminds me of something that I'm pretty sure Mr. Money Mustache wrote. It's a visual that has stuck with me ever since. And it was something along the lines of that if you spend money on just dumb stuff today, how essentially what you're doing is you're taking a crap sandwich and you're placing it on this conveyor belt and it's gonna go off on its journey and then at some point off in the future, it comes back to future you. And this is something that you're.

[Joel]

Eat it.

[Matt]

Yeah. Basically it's something that you have delivered to yourself as opposed to.

[Joel]

Oh gosh, that's a good story on that.

[Matt]

Investing your money. And instead what that is is a delightful, thoughtful, generous gift to your future self. It goes off on the conveyor belt and then way off in the future. It's this nice present, this nice gift that you get to receive. Think about it that way. Just whatever it is like you said, that allows you to connect with your future self. Those are the strategies to implement.

[Joel]

Okay, brief story. My dad one time, I guess you can grab sandwich instead of going. Instead of going to get a colonoscopy, you could. You could do what you needed to do at home and then mail it in.

[Matt]

No way.

[Joel]

He accidentally mailed it to his. To himself. So when he opened up that box at home.

[Matt]

Are you kidding?

[Joel]

It, like came back like two days later and he's like, wait, oh, what's this for me? And then he opened it, he's like, oh, gosh, what did I do? So, speaking of crap sandwiches, that's what.

[Matt]

You want to avoid?

[Joel]

That's what you want right there?

[Matt]

Yeah.

[Joel]

All right, nice visual for everyone there. We got more money saving information we got to get to, including a price hike at one of the cell phone companies and what you can do about it. We'll talk about that and more right after this. Are you 100% sure you're doing all the smartest things for your money? To be completely honest, I wasn't. And that's coming from someone who has committed their life to personal finance for nearly two decades.

[Matt]

That's right. So you looked into a company called Domain Money. Their team of expert certified financial planners get to know what matters the most to you. They analyze every aspect of your financial life. They build you a personalized plan with clear steps to reach each one of your goals. They make it incredibly easy to make money. It's like having your own personal cfo, therapist, and money coach all in one.

[Joel]

Yeah. I personally worked with Katie Song. She's an absolute gem. And the best part is that you can work with Katie or one of the expert certified financial planners on her team. I'm always looking out for great resources to recommend to the How To Money community. And I can confidently tell you that Domain Money exceeded my expectations. And for a limited time, they're doing free 30 minute strategy sessions. So start today by booking a free strategy session with one of their experts by going to domainmoney.com howtomoney I am a current client of Domain Money. I received a financial plan as part of the compensation for Domain Money's advertising on the podcast. And therefore I have an incentive to promote Domain Money.

[Matt]

Hi, this is Joel and Matt from the how to Money podcast.

[Joel]

We're almost out of the cold winter months and the way I plan to help myself make it through is to think of the great travel I have planned this summer. Like the road trip I want to take with My kids out west. Gonna take the whole month off, head towards Seattle for my cousin's wedding by car. I'm already plotting all the different Airbnbs we can stay at along the way.

[Matt]

Nice. I think that's a great idea. There's nothing like a cross country road trip during the summer months. And staying at Airbnbs is a great way to experience all the different towns and cities on the ro. Plus, while you're gone for this long stretch of time, you could also be hosting guests in your home on Airbnb, making some extra money in the process. I was an Airbnb host myself for a while and I loved it. It was easy and it gave me the chance to make some extra cash.

[Joel]

And now hosting your home is easier than ever on Airbnb with the co host feature. Access a network of high quality local co hosts who can help you handle everything from getting your home ready to helping your guests once they arrive with whatever they may need. Find a co [e-mail] host.

[Matt]

You probably think it's too soon to join AARP, right? Well, let's take a minute to talk about it. Where do you see yourself in 15 years? More specifically, your career, your health, your social life. What are you doing now to help you to get there? Well, there are tons of ways for you to start preparing today for your future with aarp.

[Joel]

What about that dream job you've dreamt about? Sign up for AARP reskilling courses to help make it a reality. How about that active lifestyle you've only spoken about from the couch? AARP has health tips and wellness tools to keep you moving for years to come. But none of these experiences are without making friends along the way. Connect with your community through AARP volunteer events.

[Matt]

So it's safe to say it's never too soon to join aarp. They're here to help your money, your health and happiness live as long as you do. That's why the younger you are, the more you need AARP. Learn more at aarp.org wisefriend all right, buddy, we are back from the break.

[Joel]

Still can't get that visual out of your head, can you?

[Matt]

I cannot. Now, though, it is time for the ludicrous headline of the week, which is from Bloomberg. The headline reads, private clubs with $55,000 memberships are taking off in Miami. Man, I thought folks who I knew that were joining golf clubs this time of year. Joel. That they were getting. I don't say taken advantage of because you know what it is that you're signing up for, but it's so much money and makes me think that just Miami is a completely different place to live if there are clubs that cost that much money.

[Joel]

It's amazing too when people around you start to do things and you would have thought were asinine or too expensive before all of a sudden you start to rationalize.

[Matt]

It slowly starts seeming more and more normal.

[Joel]

Yeah.

[Matt]

So you want to join the elite, you got to fork over a $9,000 joining fee and then of course, many thousands in fees every single year as well. There are other clubs springing up in Miami, also other cities around the world as well, around food or wine specifically. So not only do you have the honor of paying for your meal, but you have to pay an annual fee just to be able to get into the door.

[Joel]

It's like an exclusive eating and drinking club, but it's. One of our friends, his brother in law actually just opened up a wine bar that is exclusive and it's like you pay the same prices that you would pay out at another fancy place. But I guess because of the exclusion and the clientele that are there, you're rubbing shoulders.

[Matt]

You're the right kind of people, man.

[Joel]

An annual or a monthly fee on top of it.

[Matt]

There's, I mean, no shame, no shade thrown, no hate if you're the kind of person who likes ritzy clubs. But just make sure that you've got deep enough pockets to handle something like this. Like, don't. Like you said, don't get carried away thinking that like, well, this is, this is just par for the course. This is what has to be done now. And on top of that, I would say for most of how to money listeners, if you are craving those connections, just know you don't have to fork over thousands of dollars to make it happen. There are lots of ways to feel connected, not only to your community, your neighborhood, to the town you live in. Like it makes me think about, we just last weekend we ran a race. And by the way, congrats to Joel. Joel's new nickname is Mr. Bronze, having won third place in our.

[Joel]

Age group, the old man age group.

[Matt]

Guess what? They, they don't give medals to the fourth place finishers. Joel, that would be me right behind.

[Joel]

You for not running much. You did well.

[Matt]

Thank you. You did even better. But I will say I was in line getting my bib number and I just struck up a conversation with a dad and his daughter. Had a nice little chat there, wished him well, did the race. I saw them after the fact at the coffee shop. And we kind of like, it reignited the conversation. I was like, oh man, you know, plus you have that post race running high a little bit. Kind of talked about how we did just. I don't know, it was just a great moment of feeling connected to your community. And oftentimes I think we chalk it up to it being this, this like massive undertaking. But it's these small things it makes me think about like, like in the parenting community and circles. They and Seinfeld talk about this. Actually he calls it garbage time. And we think that what we need is quality time, like the big events. But what we need to pay more attention to is garbage time. It's the time that typically falls through the cracks that we're. A lot of times we're not engaged and we're not willing to talk to the people around us. We think it's just throwaway time. But that garbage time is like the glue. It's the things that hold, things that hold especially individuals together.

[Joel]

It's the random conversations that you get into with a neighbor while you're on your walk.

[Matt]

Yes. And so just keep that in mind. Like oftentimes we are chalking up to these massive boulders, when in reality, oftentimes it's like the, it's the sand that forms the cement, the mortar that holds us together.

[Joel]

There you go.

[Matt]

I like it.

[Joel]

I like that. And I think lots of times it can be around physical activity. But I think the other, the other thing to prioritize is serving, volunteering. That's just another way. It's amazing how when you give your time in an effort to help a local organization, that you'll find other people who have a similar sort of heart and mindset. And that creates really deep connections. So if you're feeling like, man, my connections aren't as deep as I want to, maybe I should join this expensive club over here. There's probably a better way to go that's going to cost you less money and it's probably going to like make you feel like a healthier, more well rounded person too.

[Matt]

Totally agree. Yeah, totally agree.

[Joel]

Instead of just drinking the fancy wines.

[Matt]

We just want to push folks in the direction of not signing up and spending incredible amounts of money for something that feels a bit like conspicuous consumption.

[Joel]

Let's be honest, I'm not against the fancy wine every now and again, even though I'm more like Kirkland signature wine dude. But still, Matt, what about spending money on a smaller scale? Maybe to hire people to wait in line for you. There was an article about that this week and it just kind of struck me in an interesting way because interestingly enough, now you can hire someone to wait in line to help you get a seat at a restaurant you're interested in. I was thinking about that when I was at Franklin's barbecue in Austin recently. Fortunately, it was a slow line, but I guarantee you people pay someone else to wait in line to get their brisket for them or let's say to snag tickets to a popular show that to hang out at the box office when those tickets go on sale, more people seem to be willing to pay, I would say a not insignificant sum to have someone else wait in line for them. You can use sites like TaskRabbit or skip the line. I'm curious from your point of view, man, would you pay for that? I guess no, you wouldn't.

[Matt]

I mean, well, I haven't and I can't. I'm trying to envision either yet scenario where I might would want to do something like that. And I can't really think of a scenario.

[Joel]

Okay. You know, I was thinking my initial knee jerk reaction was like, no way would I pay someone to wait in line for me. But is it all that dissimilar from using Instacart I've been talking about, which.

[Matt]

I don't use either. So it's a slippery slope. You over there paying for your luxury services and I don't know if I've.

[Joel]

Revealed this on the show. Somebody posted in the How2Money Facebook group, but Costco has stopped selling the discounted Instacart gift cards.

[Matt]

Oh, no. Which means they found you out getting my.

[Joel]

And they're like he told everybody. And now they're doing it too. We got to, we got to put the kibosh on this. So you can't get them.

[Matt]

No.

[Joel]

In my local store or on the Costco website anymore. Which means if I want to keep doing that, it just means my grocery bill is going to inflate and I got to decide whether or not I'm going to go do my own grocery shopping or not now.

[Matt]

They bait and switched you, dude.

[Joel]

They did. I have a feeling I'm going to be doing my own grocery shopping because I won't be able to stomach it without the discount. But I think it's okay at times to value your time more than you value your money. I think this just all goes in under the fancy club. And paying people to wait in lines for you don't get accustomed to paying for perks. You can't afford. It's kind of like once you let the genie out of the box, Matt, or bottle or whatever it is, once you rub that lamp, once you rub.

[Matt]

That box and the cat comes flying.

[Joel]

Out, genie pops out and you can't get the genie back in. It's. I think most people just wait longer until you go in for. Let's say you're like, oh, I'm going to hire someone to clean my house. Make sure you can sustain that for many years to come, because the likelihood that you're going to dial that back and start cleaning your own house again, it goes down significantly.

[Matt]

I will say that that was one of my biggest. Not complaints, but the thing, one of the things I was worried about when it came to. So for two summers now, and maybe I'm jumping the gun on this, but we stayed out of a really fancy beach house that we went to together with our families at the beach. And I remember my biggest hang up was thinking, we're locked into this. There is no way that we're going to be coming back from because it was just so nice.

[Joel]

But it was a far cry from the 1960s.

[Matt]

The other places that we would panel.

[Joel]

You know, homes we've been to before.

[Matt]

Exactly. But we did pull back. And so, I mean, this, this coming summer, we've. We're planning on going to a spot that's much, much more affordable. And in large part, that was because the price of that fancy spot kept going up. We found it right when it was listed, cross checked it with an actual realtor website. It was a legit place. They just didn't have the reviews on what we booked it on, like VRBO or something like that. So basically they're just waiting to get a solid arsenal of reviews before they, like, double the price. Which, yeah, prices, we can't. We can't do this, dude.

[Joel]

The price on that skyrocketed. But, you know, we were price sensitive and we said, listen, when it was reasonable, we did it. And now we're not going to be in nearly as fancy accommodations this year.

[Matt]

But it wasn't easy to do that. Like, it wasn't. It was not easy for us to have. Like, it was a conversation that we had. We're like, all right, what do y'all think? Like, this is a lot more expensive. And it was really tempting to continue to pay out the nose for this thing. But in the end, maybe because of the fact that we knew the kind of podcast that we host and we talk about personal finance, we're just like, we can't let ourselves do this.

[Joel]

But once you allow yourself to get that caviar taste, it's hard to go back to eating hot dogs.

[Matt]

Kind of, it's kind of like once you get the automatic sliding doors, it's just like, oh, that's what I'm just going to drive forever now.

[Joel]

Right, right.

[Matt]

All right, man, let's talk about higher education. The decision to get a college degree is less clear cut than it used to be. Like it made so much economic sense decades ago. Right. Like 50 years ago it was the no brainer path to a middle class life for our parents. The cost was reasonable. Today, 2025, making the wrong decision about what degree you choose, where you go to school, how much debt you're willing to take on. Like this is a high stakes gamble. Like you mess it up, one false move, one false step and it's going to hamper your future for decades to come.

[Joel]

Well, it's not very forgiving if you make the wrong mistake.

[Matt]

No. College attendance has been declining since COVID Basically the tide is turning. And Harvard, they just announced that tuition is going to be free for students coming from families that make less than $200,000 a year. That threshold used to be set at $85,000. So it's a massive increase.

[Joel]

They're kind of joining what MIT and a couple of other Ivy League schools have already done that.

[Matt]

It's a great trend that a lot of schools are headed in. Other data has found that while the sticker price of college continues to rise, that the post discount rate has been falling thanks to more generous financial aid packages. This is exactly what we talked about with Ron Lieber back in the day. College costs are still opaque and they can appear outrageously expensive on the surface. Everybody wants to have that super high sticker price, super high msrp. But to the diligent, it is totally possible to get that degree for less. And I'm also happy to see someone like Harvard with a $50 billion plus endowment using some of that perhaps to be more welcoming to a lot of the different folks who are interested in going to school there but can't afford it.

[Joel]

Yeah, it's almost as if they think of themselves as a luxury brand, some of these colleges. And if they have to reduce their sticker price, then it reflects poorly on the branding of that college or university. But the truth is most applicants can, if they, you know, take the right tact, pay less than they might have otherwise paid five, six, seven years ago in the Wall Street Journal, Matt, they profiled a Tenacious student who really wanted to go to nyu, but she wanted to go for free because it was so darn expensive to go to nyu. She was like, the only way I'm going to be able to do this is if I don't have to fork over any money. And this was such a fascinating article. The woman's name was Sierra Billy. She made it happen by applying for financial aid and scholarships. And then she like locked horns with the financial aid department. She started negotiating with them, pushing back on what they were offering her.

[Matt]

I like it.

[Joel]

And she was able to attend NYU for all those years for free. Now she's trying to go to law school for free. So I'm like, she, she's just saying like there's, there's no end to the free education that I want, which I think is awesome. I think more power to her. Makes me want to get her on the show to talk about all the strategies that she used. But it's also possible to get a degree for free. You don't even have to be quite as tenacious as Sierra was. And not just into Ivy League schools because let's be honest, Matt, the admission rate at some of the most of those Ivy League schools is pitifully small. So even if you're like, oh, free school. Well, do you have like straight A's and a 1500 SAT or. I don't know. I think the SAT works on a different scale now. But yeah, if you're not going to commit to full time scholarship hunting, how are you going to get that free education? Well, this website, appley, we'll link to this in the show notes just came out with a list of colleges offering free degrees and they spell out what it takes to qualify for that 100% discount. I think it's just nice to know ahead of time what it takes to qualify. What it takes to get that free education. And it's more available whether it's like whether certain states offer incentives like our home state, Matt, or whether it's just a college that says, hey, if you make under this amount or if you meet these certain metrics, you get to come here for free. That could easily sway your decision from saying, I really want to go to this dream school, but man, it's going to cost so much. But wait a second. This other school looks like a great option. I didn't realize I could go for essentially nothing.

[Matt]

Yeah. Going back to Sierra though, do you know the real secret to her success though?

[Joel]

Do tell.

[Matt]

It was the fact that she had a color coded Excel file that she kept up with all of her different student aid packets, offers that she's receiving, all the different scholarships and grants. That's how you do it, boy. Right there.

[Joel]

I definitely thought of you when I read that line. I was like, oh, she is also a stickler for the details.

[Matt]

Got to get after it, man. Let's talk about cell phones because T Mobile announced that it is raising prices starting in early April, increasing rates by as much as $5 a line. And I think what's going on here is that they're hoping that you won't notice or that, you know, you'll be like the frog in the pot of warm of warming water. You're going to be tempted to chalk it up to, you know, oh, it's inflation or maybe it's tariffs. But the truth is cell phone service has been on a deflationary trend. There's so much competition in the space and that. And the folks who are losing out on the savings are the ones who stay put instead of jumping out of the water before it gets boiling. So if you received a text about your your cell phone plant increasing in price, don't put up with it, man.

[Joel]

You're right. It's one of these things that has been going down and down in price and so it's. But many people have not partaken in the benefits. There are just so many better choices than just going with the big advertise, like, who have all the commercials and are sponsoring your favorite sports teams. Cable companies, for instance, surprisingly, have launched decent cell phone service products like Comcast and Charter Comcast. Some people are like, I'm never doing business with them again because of what they did to me. A lot of people feel that way about that company. But those companies have actually launched cell phone services that are pretty decent. They've offered discount plans. Their plans, I think, still don't provide the best value even though they've been gaining market share. Mint Mobile, that's one we've talked about for a long time. They Rock Boost is another solid cheap option. So is visible. But then US Mobile, it's our current favorites and it's who we use right now. $17.50 a month, Matt, for unlimited cell phone service is pretty great. Look into the details, see whether or not it's going to work for you. But when the big cell phone providers say, hey, prices are going up, it's so easy to say, not for me they're not.

[Matt]

Yeah, the great thing about switching cell phone providers too is that you save a ton of Money, but you're not downgrading in a serious way. And that's not the case with most things that we buy. Like, especially when it comes to things in the physical world, like if you are gonna spend less on a pair of shoes, you're often gonna get a cheaper pair. It's an inferior product, basically. Unless you're getting them massively on sale, like you tend to do, go get.

[Joel]

Your shoes at Walmart or pay less versus one of the name brands, it's not the same. You're probably, they're not gonna last as long. Or maybe if you're running in them, you can hurt your feet.

[Matt]

Or even like going with Spirit Airlines over Delta. Sure, you're saving money, but there are trade offs. You need to make sure you're aware of the trade offs. New York magazine, they had an article about the difference between a $30 pair and a $300 pair of jeans. The materials that they use to make these jeans are meaningfully different. The craftsmanship, the design. They're typically superior when you pay a lot more. And so we're sharing this not as a blanket statement to always go for the cheaper item or the cheaper service out there because sometimes it might be worth it to pay more for specific items. I mean, especially items that you love and just certain items that you use frequently. Right? Like if it's something that you're going to be interacting with on a regular basis. We talked about this in a recent. In the recent newsletter. Buy once, cry once. If it's. Especially if it's something that, if you're constantly reminding yourself of how cheap something is, I don't know, maybe it's worth it to upgrade.

[Joel]

Well, yeah, I think that's the downside of Shein and Temu, the sites that people have been gravitating towards to save money on clothing. And I've just heard so many people say it didn't last. It lasted like two wears. It ripped or it was. It didn't fit the way I thought it was going to. And that's like the complaint in the cheaper jeans world is the way they're manufactured, that you buy one pair of jeans and you buy the same pair in a different color and the fit's completely different just because the material that's used in the craftsmanship isn't there.

[Matt]

So I'm made in a different factory, dude.

[Joel]

I think about the jeans I wear. I've had the same pair of jeans I know you have too, for like seven or eight years. I mean, wearing them over and over and over for a long period of time.

[Matt]

And they weren't even the $300 pair of jeans.

[Joel]

Yeah, no, no, me neither.

[Matt]

Said that quickly. But like, somewhere in between, you know.

[Joel]

It'S just like 100 bucks is about what the top end of what I'm willing to pay for a pair of jeans. But then they're just, they're better crafted, they look good, they fit good, and I'm going to hold onto them for a long time. And that's where like the price per wear comes in. I think it's a really good metric for people to use when they're thinking about what they're buying. Hey, am I willing to pay a little more up front? Because I know it's going to last longer. I'm going to wear it a whole lot more than the cheaper item that I might have to discard in a whole lot less time.

[Matt]

Totally. All right, that's going to be it for the Friday flight. Have a great weekend. We will see you back here on Monday with a fresh ask how to Money. Until next time, buddy.

[Joel]

Best friends out.

[Matt]

Best friends out.

[Joel]

He like, put the get the label wrong. Yeah, I think he like. Yeah.

[Matt]

Postage.

[Joel]

No, I think he. I don't remember which one it was, but it was something like that where.

[Matt]

Like, return to cinder. Like. Awesome.

[Joel]

Yeah.

[Matt]

Yeah. You always get excited about the packages that show up at your house. I know. Oh, man.

[Joel]

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[Matt]

That's right. And for a limited time, they're doing free 30 minute strategy sessions. So start today by booking a free strategy session with one of their experts by going to domainmoney.com howtomoney I am.

[Joel]

A current client of Domain Money. I received a financial plan as part of the compensation for Domain Money's advertising on the podcast. And therefore I have an incentive to promote Domain Money.

[C]

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[D]

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