04.10.26 Clark Answers His Critics on Clark Stinks / Scammers Going For Broke

Summary

The Clark Howard Podcast — April 10, 2026

Episode Title: Clark Answers His Critics on Clark Stinks / Scammers Going For Broke
Host: Clark Howard
Co-Host: Krista
Date: April 10, 2026

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Episode Overview

This episode features two signature segments of the Clark Howard Podcast:

1. Clark Stinks (Listener feedback and critiques, with Clark’s responses and discussion)
2. Scammers Going For Broke (An in-depth look at current scam tactics threatening consumers, especially retirees)

Clark and Krista engage listeners with their trademark wit and warmth while navigating constructive criticism. The episode is packed with practical advice for financial safety, up-to-date insights on personal finance trends, and real-world solutions for listener questions.

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Segment 1: Clark Stinks — Clark Answers His Critics

Starts at 02:05

Theme:
Listeners share feedback (often criticisms or challenges) about Clark’s advice, prompting honest self-examination and informative discussion.

Key Discussion Points & Insights

• Pronunciation Beef

  • Listener “Ken from Texas” complains about Krista’s pronunciation of ‘Nevada’.
    • Clark’s Take: Both versions are fine, joking about regional quirks.

    “Nevada has so many people who've moved there from different places that I'd say both of them are actually okay, Krista. So in my book, you don't stink.” — Clark (02:41)

• Tech in Older EVs

  • Thomas argues older Teslas still receive solid software support; even if updates end, legacy tech is still functional.
    • Krista finds it puzzling that the rest of the auto industry hasn’t adopted similar over-the-air updates.

    “The rest of the automotive industry hasn't adopted this. It's really weird to me.” — Krista (03:59)

• Retirement vs. College Saving

  • Danielle shares a heartfelt story about her mom sacrificing for her education, defying Clark’s usual “retirement first” advice.
    • Clark commends Danielle’s gratitude but reiterates his stance:

    “Your story ... is a wonderful exception to what I normally say. ... So often though, kids don't really appreciate like you do what their parents do in terms of sacrifice...” — Clark (06:33)

• Investing with Online Banks

  • Sarah suggests Clark undersells online banks’ investment options (she uses Ally & SoFi with automated ETF investing).
    • Clark admits it’s a new angle for him and commits to researching it for future episodes.

    “What I would like to do is at a future time I want to look at some of the online banks, the investment options they have ...” — Clark (08:03)

• Social Security Timing & Living for Today

  • Rich in Virginia pushes back on Clark's wait-until-70 SS advice, wanting to travel while healthy.

    • Clark empathizes but stresses caution:

    “Life is always a series of compromises and choices. ... I want people to have enough money to get by.” — Clark (10:50)

    • Notable quote from listener:

    “Why are you denying families the joy of a slightly smaller but earlier paycheck just to build a mountain of cash I might not live to spend?” — Rich (08:47)

• Automating ETF Investments

  • Akshay corrects Clark: Fidelity (and other platforms) now allow automated ETF investing.

    “Automatic investments is no longer true [that they’re only for mutual funds].” — Akshay (11:36)

• Life Insurance: Annual Renewable Term vs. Level Term

  • Matthew disputes Clark’s “10X salary” rule and challenges the dismissal of annual renewable term insurance.
    • Clark explains his “get it done” philosophy, recognizing ideal but favoring action over perfection.

    “I don’t want perfect to be the enemy of the good ... overwhelmingly people fall by the wayside and they never get to that issuing a policy.” — Clark (13:28)

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Notable Quotes

• “One parent can take care of 10 kids, but 10 kids can't take care of one parent.” — Clark, echoing his late father's advice (06:29)
• “There's nothing more valuable for your wallet than being a lifetime learner.” — Clark (14:33)

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Segment 2: Scammers Going For Broke

Starts at 22:02

Theme:
Clark gives a sobering account of the fast-evolving world of financial scams, describing the new, sophisticated strategies fraudsters use and the steps consumers can take to protect themselves.

Key Discussion Points & Insights

• Sophistication of Scams

  • Criminals are increasingly shifting from violent crime to online, tech-driven cons.
  • Retirees and those with investment/retirement accounts are high-value targets.

    “So much crime that we used to have, violent crime, is down ... now it involves a laptop computer, a phone, buying cheap software that helps you run your own con ...” — Clark (22:12)

• Types of Scams Described

  • Pretexting (fraudsters posing as trusted institutions or even police).
  • “Reload” scams: Victims get scammed a second time by “lawyers” promising to recover their stolen funds.

• AI Risks

  • Clark describes impostor scams using AI to fake his voice and likeness, including fraudulent endorsements.

    “There was this video that was an AI video having me endorse a company I'd never heard of...and people being mad at me.” — Clark (25:22)

• Protective Strategies

  • Credit Freeze: Clark urges all listeners to freeze their credit to prevent identity fraud.

  • Check Accounts Regularly: Especially brokerage/retirement/investment.

  • Never Click Links in Emails/Texts: Navigate to official sites directly.

  • Don’t Answer Calls from ‘Institutions’: Let it go to voicemail and call back using known numbers.

  • Beware of ‘Sense of Urgency’ Play: Scams almost always pressure immediate decisions.

    “You have to stay on your guard with one of the key things of almost all modern scams, and that is sense of urgency. You got to do it right now or else.” — Clark (27:59)

• Mindset Advice

  • Stay vigilant, but do not become cynical: Most people are good.

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Segment 3: Q&A

Starts at 28:46

Google Wallet & Autofill — Noreen in Michigan

• Question: Is Google Wallet tied to autofill for online purchases, and how to control it?
• Advice:
  • Autofill is built into digital wallets and browsers; you can use one-time cards (virtual numbers) for added safety.
  • Clark: Log out of Google account on browser if privacy is a concern.
  • Krista: Just don’t proceed if you’re uncomfortable; manually enter card data as needed.
• Lighthearted banter on football and travel as usual.

Used Car Loan Dilemma — Danny in Tennessee

• Scenario: Mother’s 2016 Ford Escape has a failed transmission, she owes more than it’s worth, and has already leased a new car.
• Options & Advice:
  • No good options, but Team Clark recommends selling the broken vehicle as-is and taking the loss rather than dumping more cash into repairs.

    “I would sell it as is ... take your loss that you’re going to absorb for your mom and be done with it.” — Clark (34:17)

Coverdell ESA vs. 529 Plans — Kurt in North Carolina

• Question: Should he keep funding both ESAs and 529s for his kids or consolidate?
• Advice: Migrate funds from Coverdell ESAs to 529 plans and only fund the 529s going forward, due to better flexibility and law changes.

  “529s ... have far more flexibility to them than you're going to have with a Coverdell Education Savings Account.” — Krista (36:10)

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Memorable Moments

• Listener Rich’s tongue-in-cheek request for Clark to tip 200% instead of 20% (09:00) and calling him a “big tightwad.”
• Danielle’s touching narrative about her mother’s sacrifice, countering financial dogma with lived experience (04:30–06:30).
• Clark’s humility and humor as he acknowledges learning from his listeners:

  “Things never stay the same. And I can't stay the same. I've got to continue to learn, and we all learn from each other.” — Clark (14:33)

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Timestamps for Key Segments

• Clark Stinks: 02:05–17:30
• Scammer Segment: 22:02–28:46
• Q&A:
  • Google Wallet Autofill: 28:46–32:08
  • Car Loan Dilemma: 32:08–35:21
  • Education Savings Accounts: 35:21–End

---

Takeaways

• Constructive criticism makes for better advice.
• Stay vigilant—scammers evolve as fast as technology does.
• Financial decisions are rarely one-size-fits-all; real life nuance matters.
• Action (even if not perfect) beats inaction in many financial areas (insurance, saving, fraud protection).

---

Clark wraps with practical reminders about tax filing deadlines and encourages listeners to be proactive and lifelong learners in their financial journeys.

Transcript

[Clark Howard]

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[Krista]

Get a $75 sponsored job credit@ Indeed.com podcast. Terms and conditions apply. It's my pleasure to welcome you here to the Clark Howard show, where our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life. And if you're a regular listener to this show, what Krista calls a Clarky.

[Clark Howard]

No. You came up with Clarkie.

[Krista]

I did.

[Clark Howard]

You did. And then we had people vote on what they should call themselves. Like a Swifty. Taylor Swift. Swifty. I like the Clark squad, I think. But I like Clarkie now. I'm used to it.

[Krista]

How does she get out on stage and perform for three and a half hours?

[Clark Howard]

It's unreal.

[Krista]

I don't know how anybody does that. Anyway, so today begins with our Clark Stink segment. You know who also stinks? Scam artists. And they're getting more and more and more sophisticated. And I know a really brilliant person who lost his life savings to crooks and lost even more in what's known as a reload. I want you to be aware of the techniques that these scamsters are using, how they're tricking you, creating a sense of urgency, and then pouring salt in the wounds after. That's coming up later. But right now, it is time for Clark Stinks. I should have never encouraged you to speak. You must think I'm pretty stupid.

[Clark Howard]

You should be ashamed of yourself. Well, maybe I'm wrong. Maybe I'm wrong.

[Krista]

Maybe you're right, pal.

[Clark Howard]

Okay. Ken says he's from Texas. Krista stinks. When it comes to pronouncing the name of the state of I say Nevada, it is pronounced with a short a, like an apple or bland.

[Krista]

Nevada.

[Clark Howard]

Nevada. Krista keeps saying Nevada, and it's driving me nuts.

[Krista]

So this has been. It's like people who say Missouri versus Missouri. Nevada has so many people who've moved there from different places that I'd say both of them are actually okay, Krista. So in my book, you don't stink. Forgetting Nevada.

[Clark Howard]

That's okay. I appreciate the. The. I'm sorry, Ken, that it's so. It's driving you nuts. I'm going to try. No,

[Krista]

nobody should Bother you for saying Nevada wrong.

[Clark Howard]

I know, but I'm saying it's okay. Oh, okay. Thomas in Georgia says Clark, you were asked about legacy tech in old EVs. I drive a 2015 Model S. This is a very old car for an EV being over a decade. For context, this came out about the same time as an iPhone6 for Tesla. They'd only been making cars for three years, which is crazy for my car. I get updates twice a year even though it's over a decade old. So what happens if they stop giving updates? Well, it's really not that different from your Toyota or Chevy or Ford when the second you drive it off the lot is probably the last time we'll ever get a software update. So if Tesla stops giving updates, well, it'll stay exactly as it is today. One thing that does amaze me is the tech in my legacy car is still better than our brand new Toyota Grand Highlander. The auto drive is better and the infotainment is better. It can be a bit slow, it's over a decade old, but if we never get another update, it would still be a great car. I know we heard from someone else who talked about that too, but I just thought that was kind of an extra little twist that it would stay the same.

[Krista]

Right? I mean, this is really puzzling to me that Tesla is a computer first company and everything was designed from day one to have these what are known as over the air updates, where the software of the vehicle, even if the hardware obviously is the same, the software continually gets updated and that the rest of the automotive industry hasn't adopted. This is really weird to me.

[Clark Howard]

Danielle in the District of Columbia says, clark, you don't stink. I'm not mad, but I am disappointed. That's almost worse, right? In a recent podcast you said that people shouldn't pay for their kids college at the expense of their own retirement because you can't fail retirement. I grew up in rural America with supportive parents and a handful of teachers who saw something in me I didn't see in myself. I always loved politics and knew that political science was the field for me. The programs offered at the public state schools left a lot to be desired. So my mom worked two full time jobs for six years so I wouldn't be drowning in student loan debt.

[Krista]

Wow.

[Clark Howard]

She knew that I would never take on the debt required for private or out of state tuition. I now make 30 times what they made despite working nowhere as hard as they ever did. Frequently I have to help my parents out now that they are retired. I've never once considered it a burden and I would never, never, not ever say that my parents have failed in any parts of their lives, even retirement.

[Krista]

Thank you very much for that. And I absolutely love your story, Danielle, and to your mom, the sacrifice that she made for those six years because she believed in you more than as a young person. You yet believed in yourself and what you've accomplished because of her belief in you. And so when I talk about this, you are an obvious example that under the roof you grew up in, what I say generally specifically would have been harm to you. And I'm so glad in your case everything's worked out and you have no amnesia about what your parents did for you and you're there for them. So often though, kids don't really appreciate like you do what their parents do in terms of sacrifice to make things happen for them. And the parents end up in extreme hardship and potentially in poverty in later life because they sacrifice for their kids and the kids then aren't there for them. As my late father used to say, one parent can take care of 10 kids, but 10 kids can't take care of one parent. So I would say your story for me is a wonderful exception to what I normally say.

[Clark Howard]

Sarah in Georgia says Clark, I smell a half baked loaf when listening to your segment on investing with the giant monster mega banks. I say half baked because you only talked about the big banks and didn't mention online banks. My husband and I have a hers his hours banking setup. We use ALLY for our shared expenses, the mortgage and utilities, emergency fund savings and pet care. Yes, we created a Critter Cash checking account. We use our sofa. We use Sofi for our separate food, spending groceries and dining out. I opened a Sofi Invest account and any remaining balance in the checking account before the payroll drop is transferred into the Sofi Invest account. Our money is invested in Vanguard S&P 500 ETF with an expense ratio of 0.03%. Amounts have varied from a dollar to $50. At the time of this message our account has $1. I'm curious to hear Clark's thoughts on online banks getting into the investment space for a fully baked loaf that smells amazing.

[Krista]

That is a wonderful question, one that no one has ever asked me and addressed. So I don't want to be flip about the answer. And so what I would like to do is at a future time I want to look at some of the online banks, the investment options they have and see if they are a significant improvement on the investing side over the investing arms of the traditional banks.

[Clark Howard]

Okay, Rich in Virginia says Clark. Love the show, but you're killing me with the wait until 70 for Social Security advice. I swear. You think we all have multimillionaire status with a vacation home in Hawaii money like you do. Listen, Clarky boy, I love my family and I want to travel while I'm able to as long as I can. It's not likely when I'm 85 trying to figure out if my knees can handle a cruise ship. Taking it early is about making memories while I can walk without a cane or a scooter. Why are you denying families the joy of a slightly smaller but earlier paycheck just to build a mountain of cash I might not live to spend? Plus, you're so wealthy, you probably don't even need that Social Security check like Warren Buffet. And speaking of cash, you're always lecturing us on saving, but I think you're just keeping all the tips for yourself. I'm kidding. I know you tip 20%, but for a multimillionaire, you really should be blowing people's minds and changing lives a tad more. Think about it. Instead of just another 20%, you could really create a big smile at a hotel or restaurant with a 200% tip or $20 a day for cleaning your room. Make them happy. Make them know they're appreciated. You big tight wad. You spread love and joy and knowledge and do so with those working the hardest for you. And I. And I too have a lovely vacation. Signed, a fan who wants to enjoy life now. Not when I'm 80 plus and possibly decrepit.

[Krista]

Okay. And that was Rich.

[Clark Howard]

Yep.

[Krista]

Yeah. So Rich. Thank you, Rich.

[Clark Howard]

Who says you're Rich?

[Krista]

Okay, Richie Rich. No, I love what you wrote. And so when I talk about age 70, almost nobody waits till age 70 for Social Security. My worry always is what happens. You're like, hey, I'm vital now. I want to enjoy life. I want to go travel here and there. I want to do the things I want to do while I still feel really great. And I don't want to be somebody who's, oh, broken down. And now I can afford to travel and I don't get to do the things I would have done. Life is always a series of compromises and choices. And what I worry about is somebody who takes a Social Security check really early is that later, when push comes to shove, expense wise in your life, you're not in a position to say, oops, I need to go get a part time job that you can't do. And then life can be a real struggle and you may not have any support from family. So that's what it's about. It's not about the joy that having that money earlier can bring. It's about my worry about where people would end up later in life. In your example, in their 80s. In their 80s. I want people to have enough money to get by.

[Clark Howard]

Akshay in North Carolina says Clark stinks. Stinks? Not really. But one of the submissions you said you cannot automate ETF investments. This is incorrect. I've been using Fidelity for the last year to make automated investments and buy ETFs. I think there's no submission which favored mutual funds or ETFs because it did not allow this. Automatic investments is no longer true.

[Krista]

That's awesome because that was a very strongly worded Clark stinks before. I'm going to see if it's now common that you can do automatic investing into ETFs just like you would with an index fund or a mutual fund.

[Clark Howard]

Matthew in Texas says I'm puzzled by Clark would say that the family should no longer pay their annual renewable term life insurance and they should sign up for life insurance equal to 10 times their earnings. That's a generic number that applies to no specific individual family's. Why not reference an online tool that shows what amount of obligation is needed to cover their loss of life? Maybe more of us should be on annual renewable term as compared to the alternative, which is signing up for a flat rate for the entire life and then canceling after seven years due to a job loss. Thanks for all you do.

[Krista]

Thank you very much Matthew. And you bring up an intriguing thought that with insurance, when somebody loses a job, they have a big reversal in their life insurance is one of the first things to go. And that's why I love so much term insurance, because the premiums are so very low that the odds that someone will have to cancel it because of another circumstance in their lives is a tiny fraction of the cancel rate on what insurance agents push, which is what they call permanent insurance, which is whole life, various forms of variable universal life and things like that. The problem with art annual renewable term is it resets every year based on a new mortality risk. So the premiums go up and up and up and up. And then when you're closer to the point where your mortality risk is higher, you might not be able to afford the premiums anymore on the annual renewable term that resets every year, but you can afford the premiums on the level term that you buy for a number of years, typically 10 to 30 years, you buy the level term and the premiums stayed the same over the years, the need for it becomes greater. Why do I say the 10 times your earnings? Because yes, there are a number of very good tools that will guesstimate based on everything else in your life, what the actual amount of life insurance is you need and it would be better for people to use it. But based on the fact that from when somebody thinks, you know what, I should have life insurance to actually getting a policy issued, overwhelmingly people fall by the wayside and they never get to that issuing a policy. So when I talk about on our insurance [e-mail] and what I'm talking about right now is the ease of you being able to buy that policy, to go through the steps as quickly and effectively as you can. So I look at saying it's a bad idea for somebody to just follow a back of the envelope thing and buy 10 times their income is. Yeah, that's not the perfect answer. But I don't want perfect to be the enemy of the good, which is getting people to the finish line of buying that life insurance policy. So they provided the protection for their loved ones. And all too often people have the best of intentions but never make it to the completion of buying that policy. So your statement that it would be better to run the simulations of what the proper amount of insurance would be.100%. Right. But people getting it done so often they wouldn't do that and they never even get to applying for a policy. So that's just why I talk that way about life insurance. And I want to tell you I appreciate everybody's perspective, the posts you made and the things that that it triggers in me. Like the thing about what about investing with an online bank where I say investing with a bricks and mortar bank is a bad idea. Never thought about that. So I'm going to check it out. And that's the kind of thing is expanding my pool knowledge that the advice that I give improves over time because things never stay the same. And I can't stay the same. I've got to continue to learn and we all learn from each other and there's nothing more valuable for your wallet than being a lifetime learner. And so thank you so much for joining us for this podcast, our YouTube show and learn along with us. So thank you to all the people who took the time to post a Clark Stinks because it improves me and improves how I can serve you. Coming up ahead, talk about something that never stops morphing, never stops changing the scam world. Gosh, I wish these people spent their time in productive things in life instead of stealing from other people. But you've always got to be vigilant.

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[Krista]

Fraudsters. They're lurking everywhere and it can start to undermine your faith in your fellow human being and so I think before I start talking about the dark side and a lot of life, most people are good, decent people. They're not up to no good. But your life can be disrupted by those who are not a. Okay. And today, so much crime that we used to have, violent crime, is down all over the United States because a lot of people who a life of crime might have involved a knife or a gun or who knows what, now it involves a laptop computer, a phone, buying cheap software that helps you run your own con on other people. Vanguard reported recently that the amount of fraud attacking people's retirement accounts is way up. So you need to be prepared. You know, I have a friend who lost a lot of money when criminals attacked his crypto wallet. And then he got reloaded on. Reload is where someone claiming to be a lawyer said they were going to help him get that money back, and all he did was have more money go down the drain on the reload. There are so many different stories about how people get into your life, get into your wallet, and steal your money. And there are certain things I want you to think about. Yeah, I talk about the basic protections you should put in place. You know, the credit freeze, which even as much as I've talked about it over the years. Let's face facts. Most listeners and viewers of us right now don't have a credit freeze in place, even though you've heard me talk about it off and on for years and years and years, because life's busy. This is one you make time for. You do it, and then the rules of engagement change over time. Think how common it was that it was a good thing that you would get a notice from a bank, a brokerage, your cell phone carrier, whatever, and they'd want to let you know about something. And you'd click on a link in a text or an email or whatever, or you'd get a phone call that said on your phone's caller ID it was from blah, blah, blah Bank. And you'd think that. And at that time, it really was your bank calling. Today, you have to prepare yourself with the ability for pretexting to happen all different ways. Pretexting is where somebody pretends to be something they're not. I saw something the other day. There was a warning from a police department in New Jersey warning people about getting phone calls from what appeared to be the police or a sheriff or whatever. And there was a warrant for your arrest or whatever it was. And you could deal with it by paying right now. Well, you know, I look at that And I think, wow, that's been going on now for years. And just now it's something that's come on the radar of that police department in New Jersey that this is happening to people. And so you have to now with the ability of AI to impersonate anyone. And, you know, we, we shared with you several months ago where there was this video that was an AI video having me endorse a company I'd never heard of, and I don't do endorsements anyway. And then people being mad at me because they went to that company to buy something and got ripped off and they thought that I had ripped them off. So know how common it is that people are continually morphing ways to steal from you? Again, please be careful. Do not become cynical. And remember, it's a fraction of people engaging in this dishonesty, this criminality. So I want you to take some things to heart. One of them is, remember where the money is. For most of us who have developed assets, it's very heavily going to be in brokerage, investment or retirement accounts. And I want you to check those accounts at least once a week and make sure everything's okay. And do not ever click on a link in a text or an email because it's so easy for a perpetrator to impersonate an organization now. And that link can lead to nothing but trouble if it's a legitimate notice from an organization, you know, by going to their website and seeing if there's something they need to communicate with you. And speaking of communication, do not answer the phone when it pops up on caller ID being from your bank, your brokerage, investment company, whatever, let it go to voicemail, and then you, at the number, you know, that's where you reach them, can contact them. And know that because criminals continually change their method of operation, you have to stay on your guard with one of the key things of almost all modern scams, and that is sense of urgency. You got to do it right now or else. Like the thing from the police department in New Jersey where they say, you got to pay right now or you're going to jail, or so many different versions of that. Do not allow somebody to bamboozle you into before you have a chance to think about something, feel that sense of danger and urgency, and only later realize, oh, man, oh man, they got me. And if you think you're too sophisticated to get taken, any of us could get taken, because the criminals continually change the story, they continually change the method they operate under, and they come up with new hooks to Try to get you.

[Clark Howard]

All right, questions for you. This one's from Noreen in Michigan. I've learned so much from you, Clark, on how much safer it is to use my Google Wallet rather than my physical card. I use Google Wallet exclusively when I'm shopping around town. The other day I decided to make a purchase online for a specific product and when I got to the payment options, it auto filled the credit card I have stored in my Google Wallet. My question is, is my Google Wallet card automatically tied to autofill for any online purchases? I posed this question to Google and could not find an answer. I could only find an option to remove the credit card I used from my Google Wallet. I don't want anything auto filled. When shopping online, I rely on you, Krista and Wes to keep my husband and I financially informed. I've been listening to you since the ninet. Moving back to Michigan in 2018 from living in British Columbia for five years. I never miss a YouTube show. Thank you so much for all you do. Oh and go Lions.

[Krista]

Oh man, that was my big disappointment of this past season is how the Lions performed and how the Buffalo Bills performed. I love those two teams. And and you know, the Ravens were also a surprising disappointment this year. You can't mention anything about football and me not immediately start talking about it. You can't mention anything about travel without me talking about it. I mean you mentioned British Columbia and I immediately started thinking about Noreen being able to ski at Whistler Blackco. I mean I just. Can you see why it was so hard for me as a student in school? I got so distracted. Okay, so Google Wallet can freak you out at times like you experienced where you're at a website, you're not using Google Wallet. But then all of a sudden there's the auto fill for a card. And so I love when you're shopping online that if it's available for you to use one time use numbers that you use those also called virtual card virtual cards. So in the case of Google Wallet, many times it will provide me the option when it's auto filling to use a number I've never seen before. That's a one time use number. And that way even if it's intercepted, it's not useful beyond that one purchase. So the autofill is part and parcel of what you've got on your phone with Google Wallet. And that doesn't freak me out. I wouldn't worry so much about it. But if it starts to autofill and you don't want to use it don't proceed and you manually enter a number

[Clark Howard]

I would sign out of. I'm imagining that you're using Chrome and I would sign out of my Google account on Chrome if I were really worried.

[Krista]

Well, you know it's on a phone so it could be.

[Clark Howard]

Well I thought this was on her computer.

[Krista]

I thought it was on a phone

[Clark Howard]

purchase online, getting to the payment options. Yeah, maybe it wasn't a phone. I just assumed.

[Krista]

Okay, so we're making a lot of

[Clark Howard]

assumptions here right now. Sorry Noreen.

[Krista]

So it can auto fill on a phone as well if you're at an e commerce site. And that one of things that worry me, that one doesn't bother me.

[Clark Howard]

Danny in Tennessee says I'm hoping to get your take on something that's been grinding my gears recently. My mother's transmission went out on her 2016 Ford Escape with less than 100,000 miles. I've offered to help her out but the situation got a bit complicated as she's on on a fixed income and upside down on the car loan. And while still trying to decide on what to do, she went out and leased a new more reliable in quotes car for more than her monthly car payments. Now I'm trying to figure out what to do with the Escape as it's at the local dealership who stated the transmission would either have to be rebuilt for $6,500 or replaced for $7,000.

[Krista]

Wait a minute. She didn't trade that in against the lease.

[Clark Howard]

She no.

[Krista]

So the loan is still there?

[Clark Howard]

Yeah. Knowing dealerships almost always charge too much, I called a bunch of local shops and the cheapest and most reliable shops I can find, all quoted around $4,500 to do a rebuild or install a used transmission. Now for the cherry on top, she owes $7,000 on the car and the car is only worth four to $5,000 on trade in and on marketplace. They tend to be advertised for 7 to $8,000 in good working order and 500 to $2,000 needing repairs. So what does Team Clark recommend? Sell as is and pay off the loan, pay for repairs and sell to pay off the loan? Or do I go all in paying off the loan, fixing it and keeping it for a year or so as a backup vehicle that I don't want. Or is there another option I'm not seeing or thinking of? I really appreciate the help as I've listened to your show almost all my life and thanks to you and your team I've been able to help those that have helped me.

[Krista]

My goodness Okay, I got to tell you something, Danny. My son, when he was a single digit, would do these. What would you rather with us? And it'd be, would you rather be eaten by a lion? Or would you rather, you know, die in a crash or whatever? Every scenario he gave was a horrible outcome. There was no good option. You've now pulled a grant on me. You got no good option here.

[Clark Howard]

But what a good son.

[Krista]

What a good son to take care of your mom. So I would say if you said to me you could make good use of the vehicle, it would make sense to throw money at this. Have the new transmission put in, you drive it for a couple years and you work out the cost. That way, in your case, you don't want or need the vehicle. The die is already cash. She leased the car, all of that. I would sell it as is. You're going to have to write a check one way or another. You don't know if you pay to have it repaired. Let's say it is 4,500. But they could get in there and say, oh, no, we found this other thing. It's going to be another thousand bucks. I think you sell it as is, as the condition it is, take your loss that you're going to absorb for your mom and be done with it. Because the options, the various options are all pretty rotten. Terrible.

[Clark Howard]

Truthfully, Kurt in North Carolina says, I have an Education Savings IRA and a Schwab 529 plan for each of my two children, 11 and 9 years old. So I have four accounts total. The majority of the money is in the Education Savings IRA plan with $100 dripping into each ESA account every month from a grandparent. No ongoing direct deposit into the 529 plan at this time. Both accounts are growing steadily, with no account clearly outperforming another. To a large degree. I've seen advice stating the 529 plan may be preferred over the ESA account. Would you suggest I keep both accounts as is steadily growing? Or rollover the money from the ESA into the 529 and change the monthly direct deposits to the 520?

[Krista]

So the Coverdell ESA Education Savings Account is what I call what they call in tech, a successful failure. The Coverdell led to the enormously successful and widely adopted 529 accounts. And so the Coverdell ESA has kind of gotten lost out there like a forgotten relic. And I never, ever hear anybody who has one anymore. In fact, I don't think anybody's asked us about a Coverdell in maybe once in the last 10 years. So thank you for bringing it back into our world. Kurt, I would do just the last thing you said I would stop contributing to the Coverdell, move the money from the Coverdell into 529s which is a tax free event and then continue your automatic contributions to the 529. 529s. If you've got a good plan available to you and you can see our plan guide to five [e-mail] if you have a good low cost 529 plan, you just contribute to it. Because the 529s with the law continually being revised, have far more flexibility to them than you're going to have with a Coverdell Education Savings Account. I knew the late Senator Coverdell who came up with this idea and really in his own way is the, I guess you'd call him the granddaddy of the 529. And his family members should be really proud of what he did. However, paying for college has really become more efficient through the 529s. Now let me give you extra homework, Kurt. If you go on our Guide and the 529 plan you have for the kids is not any good, based on our research, this would be time for a more complicated double move. You don't fund the covered lesa anymore and you instead open. You're going to hate me. A new Ultra Low Cost 529 for your 11 and 9 year old and move the money from the Coverdell to the new 529 and move your old 529 money to the new one. If the existing 529 is a low cost plan, you're good. You just move the money from the ESA over to it and you're done. That was pretty complicated. But what's great about 529s is they've gotten better and better and better over the years. And with the changes Congress made, this was two years ago, they became even more useful for families and eliminated the problem of people not knowing if their kid was going to go to College by having 529money be able to be converted with limits into a Roth IRA tax free exchange and grow through a kid's lifetime as an adult towards having a secure retirement even if the kid never needs a penny of it for education. And so check out our 529 plan guide because there are great 529 plans, there are mediocre 529 plans and then there are are absolutely rotten terrible 529 plans sold by high commission high cost salespeople. 529 plans are only okay if they're bought what's known as direct sold from a 529 plan seller because you don't need any salesperson involved in the setup. Funding and fun choices in a 529 plan. So thank you so much for joining us today. I hope that this is going to be a great weekend for you. And I know tax day is coming next week. If you, like me, are in a position where you can't file on the 15th because you waiting for paperwork or computing this, that or the other part of your tax return, know that just because you're not ready doesn't mean you don't file next week. You file your return and if you need to get an extension, that's easy. And then you don't have to file your return. But what do you have to do? You have to estimate what you might owe additional to what's already been paid in and pay that on the 15th. But the most important thing is file that extension because failure to file is a much more severe penalty under the law than failure to pay. Odd, right? That's how it works. So with that depressing thing talking about income tax to end our week, don't worry, be happy and have a great, great weekend and we'll be at your service Monday.