Clark Howard (2:43)

Steven, I love everything about what you said. Most homeowners aren't going to get into the weeds of how all this works, but the great news is the battery costs keep going down, down, down and it's going to become a common thing. Particularly with time of demand where power is charged based on spikes in use or time of day, and with the data center problem that we're facing in the country. Having your own source of power from batteries is, dare I say by 2030 will be completely common because we'll have hit that sweet spot where it'll just make sense for most people as the cost per kilowatt has been escalating so rapidly in so much of the country.

Listener/Caller (3:40)

Thomas in France says Clark, you mentioned how you tell a rude customer service rep, I can't hear you, I need to call back. Stop being such a wuss. Why not just say you are very rude. I'm going to call back and get a more understanding representative. At least now the person knows they're being offensive.

Clark Howard (3:57)

Okay, I respectfully disagree with you because what can happen is you know how back in elementary school if the second grade teacher told the third grade teacher that you were a pain in the rear end? You walk into that third grade class and that third grade teacher already has you pegged as a problem. So remember, they got the power there to put in a note saying that you are whatever description they give. Yes, and when you talk to that next person, you might have a hostile person right out of the gate because of the notes left behind about you.

Listener/Caller (4:40)

You sound very familiar with that second to third grade note.

Clark Howard (4:44)

Which grade? I mean, we could name grade after grade that they said this guy's a

Listener/Caller (4:51)

Kyle in Illinois says recently you ranted about Zel fraud and how banks have a low rate of actually reimbursing for cases of reported fraud. While it's true that the rate is low, that doesn't tell the whole story. In a situation where a crook gains access to my bank account and transfers money to themselves as you described, I am protected by Regulation E in the same what I would be if somebody stole my credit card and PIN and withdrew money in an atm. What you didn't consider is that most common fraud related to Zell is social engineering where a victim is convinced to transfer money to a fraudulent party. In these cases, Regulation E does not apply because the account owner initiated the money transfer. While I'd still consider this fraud, it's not protected and the banks will deny a fraud claim in the same way they would if I reported that I handed cash to someone and they ran off with it. I think we all should be more cautious when using any of these money transfer apps with people we don't know. But I don't agree that everyone needs to cancel and disable Zell because of fraud.

Clark Howard (5:48)

Kyle, thank you very much for your post. Now, because of the way Zelle is embedded in your bank account, the big problem with Regulation E is that what's been happening is pretexting where the fraudster who is contacting you as the consumer is the mark they're going to rip off impersonates being a bank employee and they use a number of different MOs for it. It's much more common now with Zelle because it's embedded in your checking account that what the criminals are trying to get is access to your credentials with the bank. This is different than the social engineering that is so common with Cash App and Venmo, where they are social engineering as you said, conning you into giving money to a crook who they think whatever the backstory is is not involved in the same issue as the Regulation E thing with Zelle. No doubt all three of these apps have severe holes in consumer protection. When the money takes the one way trip, it is gone. Now on your point, when someone is in some way hacked into a bank account, the banks have been in our experience, pathetic, pitiful, saying that it's the consumer's fault that somebody got access to their account and not allowing Regulation E claim. So in theory what you said is right, but day to day in the real world, it's not playing that way. So that's why I continue to call Zelle big Bad Zell. Because in real life the banks don't have your back.

Listener/Caller (7:42)

Larry in Georgia says this is about homeownership versus renting. Many of what you call expenses actually raise the eventual sale price of the home. Also, when you rent, you're paying the same taxes, mortgage and interest and repairs for the owner. When you sell, you owe no capital gains, unlike investments. You should have said all that.

Clark Howard (8:00)

Thank you. And the good news is the housing market is reaching a point where where it's becoming more affordable market by market. Unfortunately, right now the gap is so large in so many markets between what effective rent is and effective home ownership that it's a gap too large to close. That is a temporary phenomenon. Although if you're trying to buy a home and it's been going on now for several years, it doesn't feel temporary at all, but it is a temporary condition and incomes are rising faster overall than home prices are rising. So the affordability thing with buying a home is going to steadily improve. Now on the thing of the capital gains being tax free on a home you own, quarter million gain for an individual, 500,000 for a married couple except for people in ultra expensive neighborhoods. You are correct that as long as you've met the ownership time requirement, the cap gains on the sale of a personal residence are tax free and you can use that tax free thing again and again.

Listener/Caller (9:14)

Diane in Texas says Clark stinks a bit less than an open carton of milk that we forgot to toss before we left on an extended vacation. He extols the virtues of Schwab accounts in their debit card. However, he also should mention that Fidelity offers both credit and debit cards with no foreign transaction fees. Debit card ATM fees are reimbursed from the charges made anywhere in the world. The Fidelity credit card offers 2% rewards and best of all, the account owner can instantly lock and unlock the account tied to the debit card. If the account is locked, no money can be removed by fraudsters. This feature alone makes the card a less risky option than other alternatives.

Clark Howard (9:49)

Diane, thank you for that. You are the second person in the last week to sing the virtues of Fidelity cards and Fidelity is a great competitor and it's why they are one of my three favorite children and I have accounts with them.

Listener/Caller (10:06)

Couple about this one. Mike in North Carolina says Clark should know that there's more than one way to cancel your account with a Monopoly cable monster. Canceling via half day phone call is not the only way. Our local office offers appointments. I made an appointment to return my one piece of equipment. I was seen within 15 minutes of the scheduled time I returned the equipment and said that I also wanted to close and cancel my service. The rep did not launch into any retention spiel. He did tell me that I had been paying too much $90 a month for the Internet service. I was out of there within 15 minutes of being seen, equipment returned and service canceled. And Kevin in Kansas While I've never been unfortunate enough to tango with either of the two cable giants, this little trick has worked every time I've needed to cancel just about anything. When you call to cancel, simply tell them you're moving and need to discontinue service. When they ask about setting things up at the new address, let them know they don't operate in the state or town you're moving to. Do some research and set a location where they don't operate in case they will ask. No retention specialist. No dramatic Let me transfer you. No 60 minute tango. They just cancel it. Every time I've tried this I've been off the phone in just a few minutes. Quick, clean and argument free.

Clark Howard (11:14)

Thank you both. Now what we're talking about here is Charter and Spectrum and online. People get so angry about how difficult they make it to cancel. And both of you did exactly what Clarkston is about. You gave people other tools, other ways to do it. I love both of your suggestions.

Listener/Caller (11:37)

Okay, and Blake, in Utah they say everyone has a superpower. Clark's just happens to make Febreze nervous All kidding aside for clarification, HSA Contributions and Payroll versus Direct Funding Krista mentioned the option of contributing HSA funds directly to Fidelity to avoid higher fees. While that can be appealing, there's an important consideration your audience should understand. HSA contributions made through payroll deduction avoid payroll taxes. Specifically 6.2% for Social Security and 1.45% for Medicare. These savings are lost if contributions are made outside of payroll. In my case, I already exceed the Social Security wage base, so the 6.2% savings no longer applies. However, I still pay the 1.45% Medicare tax plus the additional 0.9% Medicare surtax at higher income levels. That makes payroll contributions more valuable than they may initially appear. It's simply an important trade off for listeners to consider when making this decision.

Clark Howard (12:35)

Blake, thank you. That is so well thought out. And it points out again that if you have the time to do it, you contribute through payroll and then every so often you transfer money out of the extreme high cost employer provided hsa. If yours is extreme high cost to an accountant, fidelity or somewhat fidelity really is the easiest, but others have much lower costs and I just think employers aren't even aware because they're so busy running their businesses how much their employees and they themselves get ripped off by most employer provided HSA administrators.

Listener/Caller (13:18)

Victor in Washington said Clark doesn't fully stink, but regarding the ETF versus mutual fund discussion, he didn't mention that you can't Automate transfers into ETFs like you can a mutual fund. This extra overhead might make a mutual fund better with a set it and forget it approach to saving.

Clark Howard (13:34)

This is such a great point that behavioral finance finds that if people can't do something automatically, they have the best of intentions but don't get around to it. This is such a valid point you make, and if you're comparing ETFs, which most ETFs are like a version of an index fund versus an index fund being able to do automatic contributions to an index fund is a better idea versus manually having to put money into an etf. Unless you're the kind of person who's just a great creature of habit.

Listener/Caller (14:14)

And Jeffrey, North Carolina says Clark doesn't smell as bad as a backed up sewer line, but he might be a little stale on this one. Waiting to transfer your HSA just once a year ignores the opportunity cost of leaving money uninvested. Given I'm a mathematician and programmer by training, I did a deep dive on the numbers and transferring three to four times a year can come out ahead even after the $25 fee. I wrote up a full breakdown here and he really wrote a blog post.

Clark Howard (14:40)

Can we put that in the show notes?

Listener/Caller (14:42)

Sure, let's do that.

Clark Howard (14:43)

I mean, when a listener reviewer takes the time to set up their own tool so you can see based on your employer's ripoff HSA plan, how often it's worth it to move money and the math works for you like it works for Jeffrey. Take advantage of Jeffrey's work. This is great.

Listener/Caller (15:06)

We'll put it in the podcast description, but we will email him first to ask permission. Oh, just to make sure.

Clark Howard (15:12)

Okay. All right, coming up. You know it sounds like a scam. Free tuition for college. It's actually becoming more common, but it's hard to find. I'm going to talk about a new tool for you to find ways to not have to pay a substantial amount of college costs.

Apple Card Announcer (15:33)

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Listener/Caller (16:00)

could have done better. Like cutting your own hair. Yikes. Or forgetting sunscreen so now you look like a tomato.

Clark Howard (16:08)

Ouch.

Listener/Caller (16:09)

Could have done better. Same goes for where you invest. Level up and invest smarter with Schwab. Get market insights, education and human help when you need it. Learn more@schwab.com

Don McDonald (16:23)

you know what's funny about free financial advice? It's usually the most expensive kind. I'm Don McDonald from the Talking Real Money podcast for over three decades, my co host Tom and I have been the antidote to the financial nonsense that fills the airwaves. We don't sell products, we don't have sponsors paying us to recommend their funds. We just tell you what has actually worked. Backed by decades of academic research, not some guru's gut feeling. Our listeners tell us we're like car Talk for your money. Minus the car problems with maybe even more bad jokes. You're already listening to a podcast right now, so finding us couldn't be easier. Just search for Talking Real Money or visit talkingrealmoney.com give us a few minutes. The worst that happens, you're mildly entertained. The best? You stop making your broker richer and start building actual wealth. Just search for Talking Real Money Talking Real Money is an educational podcast, hosts or affiliated with a registered investment advisor. For disclosures, visit talkingrealmoney.com this episode is

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Clark Howard (19:46)

more@applecard.com I said a few minutes ago when we were starting this podcast and YouTube show that college costs have stopped their rapid climb. The marketplace has essentially forced that as a lot of the American people have turned negative on the idea of their kid going to college. So colleges are having to compete now to get students and they're having to be much more careful and mindful about ongoing expenses at a college or university to operate them so they can avoid having these big step ups in tuition each year. And it's funny because years ago I said about college and healthcare that there's no way they can keep going up at way beyond the rate of economic growth and inflation in society. And it took a long time. Turned out I was right about college. So far I've been completely wrong about health care. Health care has defied all logic conversation for another day, another time, why that is. But the college thing is going through a change and colleges are becoming much more realistic. And more and more colleges in order to get on people's lists of places they consider, have different hoops you can jump through that may greatly reduce the cost of tuition, even down to free. Sounds like a bait and switch, like it couldn't possibly be true. And there are really, really unusual requirements at each place. What family income, what academics you have to have proven in high school, what circumstances qualify you for free tuition. And it's crazy difficult to find who these schools are and how their programs work. So now there are databases that each more or less try to help you look through as you've got a kid approach. I'd say by the spring of 10th grade is when you start focusing on this and try to figure out where the better deals are going to be in Colleges. And we have links for you to three different sources. One was a very well written story in the Washington Post with an addressable database that you can access so many free stories each year at the Washington Post website. We'll put that for you. And then we've got two others that are list that none of them are going to be 100% comprehensive. The Washington Post lists just under a thousand colleges that have programs where tuition's free. These other two list varying programs and how they work. And yes, if you've got a high school sophomore, the programs will change more. Some will go away, some will get better over the next few years. But you want to have a sense and a direction if you're staring down at brutal college costs. And it's funny because our middle child went to a very expensive private college that didn't do academic scholarships. And this daughter, ours is just brilliant and went through college. All A's graduated, summa cum laude, whatever it is. And she, yes, she walked, Steffi walked across the stage with so many ribbons on her. It was crazy. And now after three years in the workforce, she's decided she's going to go back and get a degree as a doctor of occupational therapy. We already paid all that enormous tuition undergraduate. So this time we're paying a lot of attention to what it costs at different schools and the difference from one campus to another to become a. I don't know if they call it Dot. That's what I call it. Unbelievable. I mean like the cheapest school is 1 20th the cost of the most expensive. She's considering 1 20th.

Listener/Caller (24:13)

Wow.

Clark Howard (24:14)

But anyway, we're going to have these links for you.

Listener/Caller (24:17)

Well, you can find them at clark.com, but also in the description of the episode.

Clark Howard (24:22)

Okay.

Listener/Caller (24:22)

Okay.

Clark Howard (24:23)

So you will be able to see if you've got a kid again. I would say starting spring semester, sophomore year. That's when you start looking at this stuff with your high schooler and come up with the list, a wish list of the places that it looks likely your kid's going to qualify for free or nearly free tuition.

Listener/Caller (24:45)

Okay, we have question here from Lisa in California. I have a son who committed a felony and has been sentenced to a 10 year term in state prison.

Clark Howard (24:53)

I'm really, really sorry. That's. That's a tough ride.

Listener/Caller (24:56)

It is. He's attending college while in prison and will have an associate's degree when he is released.

Clark Howard (25:02)

Great.

Listener/Caller (25:02)

He has a desire to go from prison to college at the age of 38. I'm considering opening a 529 account to assist in this. How much money per year can I contribute to a 529 forest college? It will be invested for another eight years. If by some chance he doesn't take the college route, how would I be able to transfer it over into an IRA account for his retirement? And he'll be several years behind in obtaining an education and or a retirement savings. So I want to help.

Clark Howard (25:28)

Lisa, I am so glad for you that your son has this ambition, is serving his time but trying to improve his life while he's doing that, getting associate's degree while he's there with future ambition for his life. That's just. It's so wonderful to hear. So 529 contribution limits are huge, usually somewhere around 200 grand that you can contribute to a 529 account. So don't worry about upper limits. You own the account for the benefit of your son. And as far as being able to move the money to a Roth, if he chooses not to go past the associate's degree he's going to get, that has to be limited to 35 grand. Anything beyond 35 grand is treated pretty harshly by the tax code if money is saved for college and not used for that purpose. So I would target. I don't know what your financial resources are, but I would look at somewhere around the 35,000 mark over these next eight years. Eight years of saving. And let's hope that your son's sentence is reduced for good time served at some point with potential early release showing demonstrating that he is on a very positive path now going forward.

Listener/Caller (27:02)

Definitely. Heather, New Hampshire has this question. My daughter has, was just accepted into vet school and we are thrilled. But how in the world does she pay for this? The school just told her that government loans, you can only borrow up to $50,000 now because of the big beautiful bill. What would be the best way to finance this process? Thank you so much for your help. And someone else wrote in that their child was accepted into PA school, their son and facing the same thing.

Clark Howard (27:27)

Cap. All right, so let's talk about vet school. The good news with vet school is that there are loan forgiveness programs that have popped up in states all over the country. I bet by now it's in 20 or more states that there are loan forgiveness programs. I'm going to explain in a minute because first I want to talk about your question. How do you fill that gap? The vet school, various vet schools, Heather, that your daughter's looking at, their financial aid offices are very busy Right now because of the new $50,000 total borrowing cap under the federal process. And unfortunately, what your daughter is going to face is having to take out private student loans which are going to usually be variable interest rates. And there's no programs that have the ability to flex your payment, you know, no income based repayment or anything like that. I mean, they're just hard, harsh loans that your daughter will have to take out. And that's why so many of these state programs have become so valuable as resources. They vary state to state. But here's the general thrust. There is an extreme shortage of veterinary medicine doctors in rural America. No different than human doctors where there's this tremendous shortage and both for human doctors. Pas like the question you asked nps, depending on the state, that if you will go work in a rural area, like Doc Hollywood, that movie from like 40 years ago, you go work in a rural area, you will qualify for loan forgiveness that works with different thresholds in different states, three year, five year, whatever. And that's going to become front and center for people who go to vet school because it is so hard now to get the funding and the funding is so expensive for vet school. And let me tell you, it can be a win win because the vets are so, so badly needed in rural farming communities. And then once you finish your commitment, you can go anywhere.

Listener/Caller (29:57)

Bill in Pennsylvania says, I've always tipped 20% for food service. Recently it hit me that I get the same level of service whether I order a $30 steak or a $10 burger, same number of plates, same number of trips to the table by the server, etc. Tell me why I should not be tipping a flat rate regardless of the cost of the meal versus the cost of the meal based percentage tip when the same amount of work is involved.

Clark Howard (30:20)

How many posts do we get about tipping? I know my entire career going back to the 80s, people have always asked questions about tipping with different perspectives. Okay, so the historical tradition is that you tip a percent of what your meal is. So yes, you're right. If you go into a restaurant that has enormous disparity on the menu of entrees that are very expensive, entrees that are very cheap, then yeah, you've got this enormous gap also with what the tips turn out to be. And the server, as you said, is doing the same amount of work for the ten dollar burger is the $30 steak. Now today, I don't know where you're getting a steak for 30 bucks. I don't know where you're getting A burger at a sit down restaurant for 10 because the shortage of red meat right now. But anyway, let's just go with the numbers you're talking about. So at a restaurant, normally there's a pretty narrow band on what the entrees cost. There will be some outliers at both ends. So for the servers it pretty much evens out. And your idea of just a flat service fee. So if a restaurant went to a flat service fee, it seems to cause resentment among customers. If let's say you went with the flat service fee and your $10 burger ended up being the same as what the service fee you were charged then in your mind I'm now eating a $20 burger. So this is one nobody's figured out the exact right answer to. And I've been to countries where there is no tipping and sometimes I got to tell you, the experience lacks the hustle that you usually experience here in the United States where the better the server works, you know, the, their attitude, the everything about that server leads to higher income for that server or lower income for that server. It seems to be a system that is imperfect but generally has worked overall. Now where do you go? You go to clark.com clarksthinx to post your reaction to me stepping into it again with tipping. And I hope that you have a wonderful weekend. It's been so great sharing this week with you. And if you are podcast listener and you've never checked out our YouTube version of this, check it out. It's something that's a kind of a different experience and vice versa. Our thing is we want to reach you in whatever way works for you, whether it's in the markets where I'm on television, on radio, on the news, or it's with our websites clark.com and clarkdeals.com social media. Everything we do is about providing you access to information, to knowledge that empowers you, that you can act on to improve your life so you can save more, spend less and avoid getting ripped off. We'll see you on Monday.