The Clark Howard Podcast – Episode Summary Release Date: April 9, 2025

Introduction

In this episode of The Clark Howard Podcast, host Clark Howard delves into significant changes affecting two popular discount retailers—Dollar Tree and Five Below—and provides insightful guidance on navigating summer travel amidst fluctuating gas prices. Additionally, Clark addresses a range of listener questions covering topics from HOA special assessments to fuel choices, offering practical financial advice to empower his audience.

Dollar Tree and Five Below Adaptations [00:56]

Clark Howard begins by discussing the evolving landscape of discount retail chains, focusing on Dollar Tree's recent shift from its traditional "$1.25" pricing model. Initially known as Dollar Tree, the store historically maintained a strict price point, but inflation and increased tariffs have necessitated adjustments.

Clark Howard [02:20]: "Dollar Tree forever was everything was a dollar and then inflation during COVID led to them breaking the buck and going to a buck 25."

Clark explains that Dollar Tree's high margins, driven by private label sourcing, have been under pressure, leading the company to experiment with varied pricing systems across different neighborhoods. The new pricing structure introduces items priced up to seven dollars, complicating the shopping experience as customers can no longer rely solely on the nominal $1.25 price signal.

Similarly, Five Below, traditionally targeting teenage and young adult females with products priced at five dollars or less, has broadened its product mix and customer base. Clark warns consumers to be mindful of actual prices, as both retailers have moved away from their original fixed-price models.

Listener Questions

1. HOA Special Assessments Due to Insurance Increases [04:56]

Listener: Jackie and Emilio from California

Jackie and Emilio express concern over their Homeowners Association (HOA) imposing an emergency special assessment of $4,200 due to an 800% increase in condo insurance costs.

Clark Howard [06:00]: "Condominium owners in California are between a rock and a hard place... y'all are not alone with these very, very large special assessments."

Clark attributes the surge in insurance costs to the volatile insurance market in California, exacerbated by wildfire risks. He advises attending board meetings to scrutinize insurance policies and shopping efforts, emphasizing that such financial burdens are widespread among middle-class condo owners in high-risk states.

2. Tax Withholding Strategies [08:41]

Listener: Andrew from Iowa

Andrew inquires about the feasibility of adjusting his tax withholding to zero, aiming to save and grow the extra funds in a high-yield savings account.

Clark Howard [09:35]: "If you reduce your withholdings to zero and then wait till you file your return, the IRS is going to get you and the penalties are going to far exceed what you could earn on that money."

Clark cautions against this approach, highlighting the IRS's imposition of significant underpayment penalties for insufficient tax withholdings. He notes that only self-employed individuals might navigate similar strategies without penalties, albeit with complexities.

3. HomeServe for Exterior Waterline Protection [11:33]

Listener: Bob from Washington

Bob seeks Clark's opinion on whether HomeServe offers a reliable exterior waterline protection service or if it's a homeowner scam.

Clark Howard [11:44]: "It's neither of those two things... HomeServe... sells generally home warranty plans."

Clark explains that HomeServe provides home warranty and specialty products for issues like polybutylene waterlines. He shares personal anecdotes cautioning homeowners about the inevitability of polybutylene failures, advising informed decisions rather than categorizing the service as either good or a scam.

4. Gas Purchase Strategies Amid Changing Markets [16:00]

Clark provides an extensive analysis of the gasoline market's shift towards consumer-friendly practices. He highlights the diversification of gas stations, including supermarket chains, warehouse clubs like Costco and Sam's, and independent convenience stores. This increase in competition has led to significant price variations, sometimes as much as 60 cents per gallon, favoring consumers with more affordable options.

Clark Howard [16:45]: "The cheapest gas you're going to get is going to be at the warehouse clubs... a $10 a gallon from a major oil company station. And the Costco was top tier gas."

He advises listeners to avoid major oil company credit cards that may bias them towards pricier gas options and instead leverage independent chains for better deals without compromising on gas quality.

5. Costco Credit Card for Remote Users [20:46]

Listener: Christina from Wyoming

Christina asks whether to retain or cancel her Costco credit card, considering she lives two hours away from the nearest Costco store and only visits twice a year.

Clark Howard [20:58]: "I don't know why you would keep the card... it's a long drive to Costco."

Clark recommends cancelling the Costco credit card if the benefits do not outweigh the inconvenience and limited usage, especially given the infrequent store visits.

6. Using Unleaded 88 Gasoline [21:48]

Listener: Lee from Pennsylvania

Lee seeks advice on the viability of using unleaded 88 gasoline (E15), weighing its cost savings against potential engine harm.

Clark Howard [22:28]: "Unless your vehicle is what's known as a dual fuel vehicle that can also run on the E85, I would not buy the E15. I would stick with E10 because you don't want to take a chance of needing a major repair."

Clark warns that E15 can reduce fuel economy and potentially harm engines not designed for higher ethanol blends. He emphasizes sticking with E10 unless the vehicle is compatible with higher ethanol fuels.

7. One-Way Flight Booking with Unintended Return Leg [24:00]

Listener: Mike from California

Mike describes an issue with booking a one-way flight through Kayak, where an unexpected return flight to JFK in August appeared in his reservation.

Clark Howard [24:59]: "Buying from one of these unknown outfits on Kayak is very, very risky... They make their money essentially being a promotional vehicle for a lot of unknowns."

Clark explains that such booking anomalies can result from gray market ticketing strategies, which may lead to complications like unexpected return legs. He advises caution and awareness when booking through third-party platforms to avoid potential issues.

Gas Prices and Consumer Choices [16:00 – 20:45]

Clark Howard elaborates on the transformed gasoline market, emphasizing the consumer benefits stemming from increased competition. He highlights the rise of warehouse clubs like Costco and Sam's Club, which offer significantly lower gas prices compared to traditional oil company stations. Clark underscores the importance of choosing top-tier gas from reputable independent chains to ensure fuel quality while saving money.

Clark Howard [16:00]: "Historically, buying gasoline for your vehicle meant that you were stuck at a major oil company station... But change started about 40 years ago, but really only accelerated... Now the price points... have spread so much..."

He also touches on the importance of avoiding oil company credit cards that could lead to higher overall spending despite nominal discounts, advocating instead for paying attention to actual gas prices and quality.

Conclusion [25:03 – End]

Wrapping up the episode, Clark Howard reiterates his commitment to empowering listeners through actionable financial advice. He promotes his resources, including Clark.com, ClarkDeals.com, newsletters, and social media channels, all designed to help consumers save more, spend less, and avoid financial pitfalls. Clark teases the next episode, promising entertaining segments like "Clark Stinks," where he humorously critiques questionable advice.

Clark Howard [25:29]: "The whole purpose is to reach, teach and empower so that you'll learn ways to save more, spend less, and avoid getting ripped off. And you have my promise that everything we do is to serve you with advice and information you can trust."

Key Takeaways

• Retail Pricing Adaptations: Dollar Tree and Five Below are adjusting their pricing models due to inflation and market pressures, necessitating more deliberate shopping strategies.

• HOA Financial Struggles: Homeowners Associations in high-risk states like California and Florida are facing exorbitant insurance costs, leading to significant special assessments for condo owners.

• Tax Withholding Cautions: Reducing tax withholdings to zero can result in substantial IRS penalties, making it an unwise financial strategy for most employees.

• Gasoline Market Benefits: Increased competition among gas stations offers consumers better prices and quality, with warehouse clubs like Costco leading in affordability.

• Credit Card Considerations: Holding credit cards tied to major oil companies may limit gas savings; evaluating the necessity of such cards based on personal usage is crucial.

• Fuel Choices Impact: Opting for higher ethanol blends like E15 can harm engines and reduce fuel efficiency unless the vehicle is specifically designed for such fuel types.

• Travel Booking Vigilance: Booking flights through third-party platforms like Kayak can introduce hidden complications, such as unintended return legs, highlighting the need for careful reservation management.

For more personalized advice and to engage with Clark and his team, visit www.clark.com/askclark.