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[00:00]
Commercial Narrator 1
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[00:31]
Commercial Narrator 2
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[01:05]
Clark Howard
It's my pleasure to welcome you here to the Clark Howard Show. You know our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life.
[01:18]
Krista
You always point at me when you're saying that.
[01:21]
Clark Howard
Well, it's fun. I know, because you're kind of standing there and people are like, why is she standing there? Well, it's Friday, so it's a little different because that means it's time for me to hear from Krista. Your posts.
[01:33]
Krista
Not my posts, the listeners.
[01:35]
Clark Howard
The listener's post. Your post.
[01:38]
Krista
The Clarkey's on how I have been
[01:40]
Clark Howard
stinking it up with terrible smelly advice. So later, after we've had Clark Stinks, you love a deal like I do. There's something that I do to conspire against myself that you may do too. That can eat up your wallet. It's called splaving.
[02:06]
Krista
Spaving. Isn't it Spaving.
[02:08]
Clark Howard
I've heard it. Splaving.
[02:10]
Krista
Okay.
[02:11]
Clark Howard
Spaving. You know, it's probably got more than one way people say it, but the same concept.
[02:15]
Krista
Okay. I think it's spaving.
[02:18]
Clark Howard
Spaving.
[02:18]
Krista
Yeah. I've always heard his spend saving.
[02:21]
Clark Howard
Okay. And saving. No. But I'll go with is it splurge?
[02:24]
Krista
Are you saying splurge? Saving.
[02:26]
Clark Howard
Yeah, it's kind of like. I mean, that's why. I guess I've heard it both ways. But whatever.
[02:31]
Krista
Sorry.
[02:32]
Clark Howard
You say spade, I say splave. Okay. We're going to talk later about what that means and how that gets you to conspire against yourself. But Right now it is time to find out where I didn't do encouraged you to speak. You must think I'm pretty stupid.
[02:50]
Commercial Narrator 1
You should be ashamed of yourself.
[02:51]
Clark Howard
Well, maybe I'm wrong. Maybe I'm wrong. Maybe you're right, pal.
[02:58]
Krista
All right, we're gonna start with andy in Mississippi. Mr. Clark, in a recent episode, you mentioned the American dream in relation to homeownership. To quote Wikipedia, the American dream is a phrase referring to the national ethos of the United States. That every person has the freedom and opportunity to succeed and attain a better life. There are too many people that make this mistake. But I expected you to be above this error.
[03:27]
Clark Howard
Thank you for that. And you are right. A lot of people refer though also to home ownership as being the American dream. I mean, you're talking about the American dream being that you can come from nothing, be a classic immigrant to the United States who comes with nothing. And America offers the opportunity to become financially independent. And same thing for people born here who may be born without much. But a lot of people also use that term for the American dream being owning a home. And the reason is that most people don't create middle class wealth through investments. Although that's changing because of the 401ks and IRAs. They do it through owning a home through the years. And that creates the family wealth. They talk about that being intergenerational wealth and on like that. But thank you. You are correct. I've stretched the definition.
[04:36]
Krista
Tom in North Carolina says the coming of summer humidity in Florida does not give you a pass on stinkiness. You told the story of the woman on all of whose money held by Fidelity had disappeared. I waited and waited to find out how did this happen. All you said was that it wasn't an isolated incident and it had something to do with a Fidelity computer problem. How vague and superficial is that? Could it happen again? Please do not apply for any job as an investigative reporter.
[05:07]
Clark Howard
So, Tom, Fidelity has not been forthcoming. But it wasn't just to her. They had a computer error that wiped some customers files clean. They were able to restore them after a period of time. But for people who did not hear that story when people called a customer, no service at Fidelity. Well, this woman in particular was told, who's coming from Colorado, was told, oh, well, maybe your accounts are at Schwab and you just think they're at Fidelity. There was no trace of any record that she had ever had these multiple accounts with Fidelity. So the point of the story was whether it is just a computer problem, foreign hacker, whatever I want you to have proof with recent statements of what accounts you have and what money you have in them. If there is for some reason a catastrophic disappearance of the record of your money that you have documentation to speed up the process of having it restored to you.
[06:18]
Krista
Sherman in Georgia says you missed the mark slightly when you stated you can get a credit report once a year. @annualcreditreport.com it was permanently changed from once a year to once a week in 2023. The URL needs to be updated for sure.
[06:33]
Clark Howard
So Sherman, the reason I say once a year and thank you, you are correct is that was an administrative decision by Equifax, TransUnion and Experian subject to their whims. It is not statute. The statute requires that you have access to one free report per year. The great news now and maybe why the three credit bureaus did this is is now people can see their reports so many different ways that the credit bureaus@annualcreditreport.com have an opportunity to try to sell you all kinds of memberships so by instead of fighting them, joining all the others that are now competing to offer access to your credit reports for free whenever you want them. Maybe they're permanently or semi permanently going to continue this, but they're not statutorily required to do so.
[07:29]
Krista
April in Florida says Not Enough Warning on Later in Life Marriages I'm writing this as an elder law attorney who has seen the whole gamut with later life relationships. Everything you said was right on but you didn't go far enough, especially when it comes to living together, married or not. People need to ask the difficult questions like how long will I live if you die first? What happens if one of us needs long term care? Who pays? These issues don't involve just YouTube but also your families and the government. For instance, will the government require I use my funds for your care? I've seen surviving spouses kicked out of their homes by relatives before the funeral, entire estates diverted over the new spouse's family, new spouse considering divorce because of long term care expenses, adult children taking over and excluding the life partner, and all sorts of other nightmares all because of poor planning. The couple should see a qualified elder or estate planning attorney before making commitments. At the very least, make a thorough checklist of financial and health issues that could come up and work out how they would be dealt with and make sure it's properly documented. Most often the problems arose not because one partner was dishonest or had negative intentions, but because the couple never addressed the issues made Assumptions and put their heads in the sand.
[08:48]
Clark Howard
April, you are so right. I can't even begin to tell you. There's a story I told about six or seven years ago, and a neighbor stopped me on the street when I was out for a walk. And she was crying. And I thought she was crying because her husband had just recently died. And she was grieving the loss of her husband. But then the most shocking thing happened. Her stepchildren. And she had been later in life, marriage. So the. The children were his and she had never raised them, but they were adult children when they married, not only was she grieving his passing, but the kids kicked her out of the house. And she said, is there anything I can do? This goes right to what you're saying, April. There was nothing she could do. There was. He had said, you know, if I die first, you'll just be able to live here as long as you want. Has no force in law. And the kids wanted the house and kicked her out. Sold it right away. And I don't know where she went. Never saw her again. But it's terrible. The thing you point out, you know, so often people do, there's gray divorce and gray remarriage or people will. Will live together without benefit of marriage. And we're only thinking about our enjoyment with the other person, our life with them. But what April has said, you need to also think about, you know, being with someone involves the heart and the head. And April, I really appreciate you taking the time to post this. A lot of people aren't even aware of the subspecialty of law, known as elder law, that deals with all these issues. And one of the things that an elder law attorney can be so helpful with are later in life issues, medical and ownership of property.
[11:01]
Krista
Okay, a few people wrote in about this one. Clark, totally switching gears here about pets and hotels. Tom in Florida says you stink like a cat that has marked its territory in a hotel room. Pet charges in hotels are used to clean, vacuum and disinfect rooms after pets stay with their humans, stinking up the place sheets and other things. I don't have a pet, I don't want a pet, and I don't want to stay in hotels that board pets. And that sentiment was shared.
[11:33]
Clark Howard
How many people were talking smack about the pets?
[11:37]
Krista
I got several of them for sure.
[11:38]
Clark Howard
Same kind of thing.
[11:39]
Krista
Not, but just about, you know, saying like, why it's necessary to have these fees and stuff because they. Some people are allergic too, and they really need to thoroughly clean these rooms when they have a pet in there.
[11:49]
Clark Howard
So you are assuming that they do extra cleaning because a pet has been in the room. It's always hard with junk fees to know is it just a revenue source or is it something that actually leads to a different protocol at a hotel? Love to hear from some people who are insiders who've worked in the hotel industry. What really happens in terms of how a room is cleaned after someone stayed in it with a pet.
[12:21]
Krista
Andrew in Florida says two items that are probably not mentioned enough. 1. Everyone should convert at least a minimum amount of money from an IRA to a Roth. $1 is fine with fidelity. This way you can start the 5 year clock as the regular Roth accounts and the 401k Roth accounts use separate clocks. 2. If you know you're moving from a high tax state for me, New Jersey to a low tax state for me Florida within a few years you should put money in the regular 401k as opposed to the 401k Roth. In my case I was saving about 8 to 9% in state taxes that I could avoid by converting it in Florida.
[12:54]
Clark Howard
Andrew, thank you for that. And so you have New York where the tax maxes out I think at 14.8%, California just over 15%. New Jersey you say is 8 or 9. There are some other states that have very high state income taxes and I never mention what you just mentioned and this is one of the reasons we do. Clark stinks that I always talk about the federal tax from converting. Never talk about the state income tax implications.
[13:28]
Krista
Janet in Virginia says Clark, months ago you spoke in the podcast about your purchase of the Frontier Pass deal. At the time you said you were going to use it and let us know how it went and what your experience was. I've been waiting and waiting to hear your report, but I haven't heard you mention it since. Are you using your past? What have you experienced? How is flying Frontier? Inquiring minds want to know. And by the way, I'm sure my family and friends are getting tired of hearing me say just go on clark.com and Clark Howard says love ya.
[13:59]
Clark Howard
So Janet, here's the true story. I have tried to use the Wild Pass at least half a dozen times and every single time there have been no wild seats available. So let me tell you how this works. Frontier markets these passes. They've been selling a summer pass recently and the idea is that one day before travel you can book a ticket at a base of it works out to be like 19 bucks and they're never available for me When I want to go, I don't have. I wish I had the flexibility that I would just say, well, I'll go whichever day this week I can use the wild pass. And I have not been able to be that flexible since I got the wild pass. So I'm 04 right now. We're talking about. I just took money, put it in the pass, and threw it away. Lane.
[15:07]
Krista
Well, you've got half a year left, so.
[15:09]
Clark Howard
No, no, we have till the. When I bought it, it was a special extended one. That's good. Well into 27.
[15:17]
Krista
Oh, good.
[15:18]
Clark Howard
Okay. I got. I got more than that. But Lane, you know, I. I signed her up for it, too. She's like, really? You volunteered for us without asking me to fly Frontier? Now, I have flown Frontier before, and it's not the greatest product in the world, from my experience in the past, but, I mean, being able to fly for almost nothing on short notice in theory, is great. By the way, international travel, you can book it 10 days out. So there's more flexibility with that.
[15:50]
Krista
Leon in California says Clark missed the mark when saying that virtual home staging was a bait and switch. I'm a retired Realtor, and my wife is a retired home stager, and ethical realtors and home stagers clearly label any virtually staged rooms as being virtually staged, so buyers understand that the room is not staged with real furniture. Furniture and accessories are usually not included in a home sale. So buyers already understand that either real or virtual staging furniture is not included. Virtual staging is an affordable way to make a home look lived in and give buyers an opportunity to visualize themselves in that home.
[16:24]
Clark Howard
Leon, thank you for that. Now, what I'm worried about is deception. But if somebody goes to tour a property, then that goes away. But, you know, I'm obsessed with actually staging a home for sale. And we've done that again and again where we hire a staging company or we use. Lane's got really great taste. We use her own furniture. And I find that properties are more likely to stand out and potentially sell quicker when they are staged. It is not cheap to hire a staging company, but if it gets a sale done, you know, we're in a tough time right now to sell. It's harder for sellers to find buyers. Something that helps you stand out, I think is very useful. But virtual staging is very common now.
[17:20]
Krista
Linda in Florida says Clark stinks. He recently said that a VPN isn't really necessary unless you're traveling abroad and want to see sports. When my husband and I travel anywhere, we use a Paid vpn. Clark said the only thing it does is keep your information private. Well, isn't that the good goal? Who knows who's staying in the room next to you or sitting in the airport seat next to yours? We think VPNs are great and we don't watch sports.
[17:44]
Clark Howard
Well, Linda, not everybody's perfect if you don't watch sports. No. Anyway, you're right. I ignored the most obvious reason someone should have a vpn, which is privacy. And that's how I use mine. And I've been really happy using and having a vpn. I just have an obsession if I'm outside the country in the fall when a lot of better travel deals are available for me to be able to see my beloved football. So that's why that's all you heard from me. So that was intellectually lazy of me to only talk about my own personal obsession instead of the primary reason someone would use a vpn. And you know the great thing? If you are one of the people like Linda and you're not into sports, streaming content is so much cheaper for you. It's unreal how cheap video content is excluding sports because the big cost of streaming now is all sports. So, Linda, I want to offer you back something that may save you money. Anyone else? If you're like sports? Not for me.
[19:09]
Krista
Use our tool@clark.com yeah, we have a great streaming TV.
[19:13]
Clark Howard
Add the content that's important to you and you watch. When you, even if you're not into sports, just add sports content as being important to you. You watch the price of your streaming bill go crazy high. And it's possible for you to, if you want a lot of streaming, to reduce the cost by 75% if you exclude sports. So thank you for your thing about the real reason someone should use a VPN and not somebody like me who's just football obsessed. Football is my life. I mean, right now we're right in the middle of the whole World cup thing and that to me is something I'm not excited by. I'm sorry. I know soccer is a much more, as it's called everywhere else in world football is much more popular sport than American style football. But I just have never been able to get into that, even though my kids played it well. Coming up ahead, spaving, splaving, call it whatever you wish. What is it? How does it undermine your finances? We're going to talk about that. And for all of you posted on Clarkston, thank you for doing so. We all learn from each other and I appreciate so much when you take the time to post.
[20:47]
Commercial Narrator 3
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[21:54]
Clark Howard
here tonight to bring women back to their rightful place.
[21:58]
Commercial Narrator 4
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[22:03]
Krista
It's easier to accept a story than believe that the people around you are monsters.
[22:07]
Commercial Narrator 4
The battle isn't over.
[22:09]
Krista
There comes a time when you have to take action, when you have to choose your own destiny.
[22:13]
Clark Howard
Never quite as it seems.
[22:16]
Commercial Narrator 4
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[22:23]
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[22:54]
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[23:20]
Clark Howard
Okay? We have a consensus that I'm wrong and it's spaving that I'm worried about. So spaving is impulse buying because something's on sale and you buy something you don't need. And you know who's been very guilty of that over the years? Yours truly. I have spaved again and again and again. So Clark, heal thyself here. It is very, very common. And retailers are so good online especially, but also in physical stores where they'll do, you know, buy two, get one free, buy one, get 50% off a second. Anything that creates this impulse where we feel like we got to do it because we're saving money. I don't know if you've noticed how much Amazon uses our natural instinct to spave against us where they'll say over and over again, you see on Amazon, buy two and get this additional discount routine now on Amazon as a way of getting you to spend more money. What happens is we see an item on sale and it's almost like a dopamine hit. We just, oh, I want the deal, I want the deal. And you know, I'm so obsessed with finding bargains that I had to teach myself to fight the instinct to buy something just because it was on sale. But the bigger one for me was this thing of we'll get a second one for 50% off or buy this bonus item, buy two, get a third one free. Totally worked on me. It's something that works because we want that deal. We chase that deal and we grab something we didn't need to spend money on. You know, having a closet full of things gathering dust is not a great idea. And nowhere was my Achilles heel worse with this than anything that was any kind of electronics. I'd buy something because it was a deal and then not use it. And what happens with electronic items? The value of them drops like nothing you've ever experienced in your life. The value just drops just like, I mean drop a rock. That's what's happening with electronics when you buy them. They're always cheaper later. I mean the only exception right now is with the memory shortage and computers actually going up in price right now. And the sales we're going to have are going to be non sale sales on computers. That's an item that what you got. If it's working, you keep on using it, plain and simple. So what's your weak spot on spaving?
[26:39]
Krista
You know, I am really bad about lately on Instagram, I'LL be offered some. And of course, the algorithm is feeding me stuff for my aged woman, right? Like, oh, here's this. Like, here's this great collagen powder you should be using. And all these different sort of face creams and stuff, like things for skin and beauty and that kind of stuff for women who are getting older. And so now what I've started to do is, well, first of all, if I see a product I like, I'd never buy through there. I go and research it online and look at what it costs other places. Usually it's cheaper. And the other thing I do is when I add to cart just in general for myself, I'm holding it there for 24 hours because I feel like I impulse buy too much. And I'm more, I'd say, like eight times out of ten, I never buy it. I just hold it there and I come back to it the next day. And that's helping me a lot. Not buy stuff. Like, if I see a great deal on a shirt or whatever, I'm like, do I really need that? And then I go open my closet and look, I, oh, I already have two shirts that color. I don't need that shirt that I put in my car, even though it's 40% off or whatever. And so that is helping me to, like, you know, quell that.
[27:49]
Clark Howard
And in physical stores is you may know, if you're a longtime listener or viewer, I do not get a shopping cart. Shopping cart is a magnet for impulse buys specials. So by not getting a cart, I'm able to really resist what I buy. Because you only hold so much in your arms. And if I'm, let's say I'm in one of the warehouse clubs and I'm going to be buying something big and heavy, replenishing something for the home, I don't get a cart till the very end. Oh, and I go get the cart, go get that item, go straight to checkout. And speaking of which, when is Costco going to get with the program? Because Sam's Club and BJ's Wholesale both, you can ring yourself up on your phone on the app. You check yourself out on the app, it generates a QR code, and you go to the exit, they scan your QR code and you're done. And at Sam's, if it works right? She does about 25% of the time, they just wave you right through because AI with a zillion cameras has already validated what you have with you.
[29:07]
Krista
I have to Quick confession, Costco confession. I went the other day, and I did get a cart because I have a list, and my list was dog food, paper towels, toilet paper, and things that I knew were going to be big and heavy. And that was all that was on my list. So I go in. Well, of course I see a clothing item, like, when you walk in like this. And I was like, do I? Oh, I kind of. I don't know. Do I like it? Do I not like it? I do like it. Okay, I'm gonna buy it. And brought it home with me. And immediately regretted buying it. Cause I was like, I don't need this again. So I forced myself to go back. The punishment is having to find a parking spot in the Costco parking lot again on a weekend and returned it immediately. But it's just.
[29:49]
Clark Howard
So try my way.
[29:50]
Krista
Well, I didn't. I couldn't have done it then because I. I didn't need to walk through. I knew what I had, and it was all heavy, so I definitely needed a cart. But Costco is great because you can just return stuff really easily, so. Or other stores, too, I'm sure.
[30:04]
Clark Howard
All right, here's my. Wait, wait. I got to give one pet peeve. Okay. All right. You shop at Sam's Costco, or BJ's Wholesale, and you pick up an item, and then later you decide you don't want it, and you abandon it somewhere. When people do that with refrigerator or frozen items, I'm like the warehouse club police. I don't say anything to them. But if I see somebody dump something out of their car that's refrigerator, frozen, I take it right back to the department and put it back.
[30:36]
Krista
Well, as long as you see them do it.
[30:38]
Clark Howard
If you don't, I don't. If it's been sitting for a while, I don't do it because it may have spoiled.
[30:43]
Krista
Give it to a manager.
[30:44]
Clark Howard
But that's. That's money down the tubes, and I just hate that. I mean, part of what you're getting with the warehouse clubs are these very low markups, and you erode the incentive. Other than Costco that has the fixed markup, you erode the incentive for BJ's wholesale and SAM's to not raise prices a little, to deal with the spoilage that people cause by abandoning items. Just wherever. Okay, sorry. No pet peeve.
[31:16]
Krista
I get it. When I'm in, like, Marshalls, I have a compulsion. I'm in, like, Marshalls, TJ Maxx somewhere like that, and I see clothing that's put in the wrong size area. I have to move it that's because
[31:29]
Clark Howard
you worked at the Gap.
[31:30]
Krista
I have to move.
[31:30]
Clark Howard
We have new khakis today at the Gap. What was he used to say to people?
[31:33]
Krista
Oh yeah, flat front, fitted. Yeah, whatever.
[31:37]
Clark Howard
I remember Marshalls and TJ Maxx are all the same.
[31:40]
Krista
Yes, yes. And home goods. But anyway, yeah, it's like a compulsion because I think somebody who's this size can't find isn't going to find this and I move it. Okay. Questions? Tara in Virginia. I think it's a compulsion, she says. For years I believed I was invested in a low fee target date fund through Fidelity. Specifically, I held the Fidelity Freedom 2040 fund.
[32:02]
Clark Howard
Oh.
[32:03]
Krista
Based on the name and my understanding at the time, I assumed it was a simple low cost index based option. After hearing and reading your constant nudges to check retirement fund fees, I double checked mine and it turns out I was wrong. This is actually one of Fidelity's higher fee actively managed target date funds. There is a similarly named fund, the Fidelity Freedom Index 2040 fund, that is significantly lower cost and built on index funds. The naming is so similar it's easy to confuse the two. And I did. What's more frustrating is I worked with a Fidelity advisor when setting this up and now I question whether I was steered toward the higher cost option without fully understanding the difference. The good news is that your advice prompted me to review this and I'm now in the process of moving my investments to a lower fee index version. I wanted to share this experience because I suspect I'm not alone. Many people likely assume that Freedom and Freedom Index are interchangeable when they are not, and the fee difference over time is meaningful.
[33:02]
Clark Howard
So depending on when you originally set up the account and the Fidelity representative helped you, Fidelity didn't have the index version. They added that because of competitive pressures from Vanguard being all about target funds being index funds. So Fidelity, if you're in a Legacy Freedom fund, you're paying typically more than five times the fees per year to be in that versus the index version. And Fidelity would make the case because they believe in active investing. But they offer indexing because the competitive pressures I alluded to, they would not look at it as malpractice, encouraging you to go into a fund that's more than five times the cost. But my belief is a target retirement fund, you want to be as efficient as possible and that's why you go in the index version. The additional amount that you'd end up with over the decades by being in the index version versus the original Fidelity Freedom kind of product is enough that it would make a big difference in how much money you have down the road. Expenses would be so much higher. Yeah, you'd have a lot more money.
[34:20]
Krista
Okay, I'm going to go to Angela in Georgia. I've used a Capital One card for years to pay for expenses for my three college age children. They are all authorized users and charge various expenses I've agreed to cover like health care and car repairs on that card. I just received a notification that my Capital One card is transitioning to the Discover Network. A lot of people wrote in about this, Clark, do you think I need to switch to a different card? I'm particularly concerned about them using it for emergencies while studying abroad, which all three plan to do at different times. Is Discover sufficient for that or should I get them all a visa or MasterCard instead?
[34:55]
Clark Howard
Okay, thank you for this question. All right, so what happened was Capital One bought Discover and the reason they did is they now control another payment network to compete against the Visa, MasterCard Cartel. And Discover, even though it's extremely widely accepted in the United States, has zero coverage outside the United States. So what Capital One did is cards that are generally geared towards people that are not world travelers. Because Capital One so sliced and diced with different card products who they're targeted to. A Capital One card that runs now on the Discover Network is useless for your kids traveling outside the United States. Capital One has a bunch of other cards that will stay on, typically Mastercard or Visa, and those are the ones you want for international travel for your kids. If I would say if your kids are not doing a lot of travel but will do things like study abroad. I like the Chase Sapphire preferred card in that kind of environment for your kids to have overseas because it has a lot of nice benefits to it at a $95 annual fee and no foreign currency junk fees with it as an option. But the Capital One cards that run on the Discover Network are great to have as regular everyday cards. There's no reason not to have them as a regular everyday card. Just not useful for travel.
[36:43]
Krista
All right, I'm afraid we might be becoming the Costco show, but Matthew in Ohio said. Hi, Clark. My wife and I recently became Costco members for our growing family. Any recommendations on how to save the most money at Costco? Thanks to listening to you and your team's advice over the years, we have reached a net worth of $650,000 at the ages of 32 and 29. Keep up the wonderful work.
[37:06]
Clark Howard
Oh, that's so great.
[37:07]
Krista
Wow.
[37:08]
Clark Howard
Yeah, I mean, you use one of our calculators. You see, even if you never contributed $. That's not what I'm saying you should do.
[37:14]
Krista
No.
[37:15]
Clark Howard
And you see what that 650 would be worth and let's say another 35 years. Man, that's fantastic that you've been able to do that. Barely one of you in your early 30s, the other 29. So how do I save money at Costco? Number one, we talked earlier about the cart not having one. Number two is you look for the items that are marked 97. Those are items being sold below Costco's cost. And they're the real screaming deals inside a Costco. Sam's has a similar system. Items end and 1 penny. Occasionally an item in Costco that ends 0, 0 for the price also mark down. So those are the bargains I love. But the greatest tax on your wallet in Costco going full circle is turning a good thing into a bad thing by buying impulse items. And then the ultimate way to save in Costco is. Do you know our nine pound dog's name? Kirkland Signature. Sam's Club members by members. Mark BJ's Wholesale members by Berkeley and Jensen and their other private label brands. Costco. Kirkland Signature now one of the largest brand names in the world in terms of volume of goods sold. I think this year they'll sell $75 billion worth of items that are Kirkland Signature labeled items because you're getting a discount at a place that already is a discount. Kirkland Signature is the greatest. Not our dog. Although Lane would disagree. Our dog's the greatest. But what Costco has been able to do with the Kirkland Signature label is something that people in merchandising, advertising and retail marvel at. The most successful private label in the history of retail. That is the key. Yeah. Do I have an obsession with the warehouse clubs? You know, I do. And the whole reason is the markup is the best. You know, I go into these things we used to have called Mama Ma Ma, I can't say the word. Malls, which apparently are on a comeback right now. And they got the fountains and they got the fancy floors and the stores are beautiful and all that. Who's paying for that? Who is paying for that? You are. I don't shop in stores that don't have concrete floors. That's the key. Let me put it the other positive way. Shop in stores with concrete floors. Save you a ton. And that's it for us today. I thank you so much for joining us. I hope that the weekend is a fantastic weekend you have in front of you. Speaking of the weekend, you heard Krista talking earlier about shopping on a weekend. Shop in stores. Monday, Tuesday, Wednesday nights. Whatever kind of store when nobody's in them. That's the best time to be shopping. And then the weekend. Go have fun. Go outside, don't be stuck in traffic. But have a great time and do anything you can to save more, spend less and avoid getting ripped off. And we'll see you Monday.

Summary7 min read

The Clark Howard Podcast – Episode Summary

Date: June 12, 2026
Host: Clark Howard
Episode: "Clark Answers His Critics on Clark Stinks / “Spaving” Your Way To An Empty Wallet"

Episode Overview

This episode features two primary segments:

Clark Stinks: Clark and Krista read and discuss critical listener feedback, clarifying misunderstandings and diving into various financial topics.
Spaving (“Spend-Saving”) Discussion: Clark warns about the self-sabotaging habit of “spaving”—spending more under the guise of saving, driven by retailer tactics and psychological impulses.

He shares honest reflections on his own financial missteps, responds to numerous listener stories, and offers actionable savings advice. The tone is direct but friendly, relying on real-life examples and frequent engagement with listeners' questions.

Key Discussion Points & Insights

1. Clark Stinks – Listener Critiques & Clark’s Responses

The American Dream & Home Ownership ([03:00-04:35])

Listener Feedback (Andy): Criticizes Clark for equating the "American Dream" solely with home ownership.
Clark’s Response:

"You are right...the American dream is really about the opportunity to succeed and attain a better life. A lot of people also use that term for...owning a home...most people don't create middle class wealth through investments...they do it through owning a home."
(Clark, 03:30)
Insight: Clark acknowledges overextending the definition, explains generational wealth connection with home ownership.

Fidelity Account Disappearance ([04:36-06:18])

Listener Feedback (Tom): Frustrated at lack of detail in Clark’s earlier coverage of a Fidelity computer error.
Clark’s Response:

"Fidelity has not been forthcoming...they had a computer error that wiped some customers files clean...the point...was...have proof with recent statements."
(Clark, 05:07)
Advice: Always retain recent statements of all investment accounts to safeguard against record-keeping disasters.

Credit Reports: Annual vs Weekly Access ([06:18-07:29])

Listener Feedback (Sherman): Points out that free credit report access is weekly (not yearly) now.
Clark’s Response:

"That was an administrative decision...not statute. The law requires one free per year."
- Acknowledges the change but notes it could be reversed since it’s not mandated by law.

Elder Law & Later-in-Life Relationships ([07:29-11:01])

Listener Feedback (April): As an elder law attorney, April warns that Clark underemphasized legal/financial pitfalls of marriage or cohabitation in later years.
Clark’s Response:

"There was nothing she could do. He had said, ‘If I die first, you'll just be able to live here as long as you want.’ Has no force in law."
(Clark, 08:51)
Insight: Couples should seek proper legal counsel and documentation to protect interests, especially regarding property, care, and inheritance.

Pet Fees in Hotels ([11:01-11:49])

Listener Feedback: Multiple complaints about pet policies and associated fees.
Clark’s Take: Fees may be justified for cleaning, but some listeners question whether they’re fairly applied.
Open Call: Wants to hear from hospitality insiders about actual cleaning protocols after pet stays.

Roth IRA Conversions & State Tax Planning ([12:20-12:54])

Listener Tip (Andrew):
1. Do a minimal Roth conversion early to start the five-year clock.
2. If moving from a high-tax state, delay Roth conversions until in a lower/no-tax state.
Clark’s Response:

"This is one of the reasons we do Clark Stinks...I never talk about the state income tax implications."
(Clark, 12:54)
Takeaway: Consider both federal and state tax implications of retirement account moves.

Frontier Wild Pass Experience ([13:28-15:49])

Listener Inquiry (Janet): Asks for follow-up on Clark’s Frontier Pass purchase.
Clark’s Experience:

"I have tried to use the Wild Pass at least half a dozen times and every single time there have been no wild seats available...I have not been able to be that flexible."
(Clark, 14:00)
Lesson: Travel subscription passes’ value is limited if you lack last-minute flexibility.

Virtual vs. Physical Home Staging ([15:49-16:23])

Listener Feedback (Leon): Virtual staging is ethical and useful when clearly labeled.
Clark’s View: Supports home staging to boost sales; virtual staging is now very common but must be transparent.

VPNs for Privacy ([17:20-19:08])

Listener Feedback (Linda): Critiques Clark’s prior VPN comments as too sports-focused; privacy is the real benefit.
Clark’s Response:

"You’re right...I ignored the most obvious reason someone should have a VPN, which is privacy. That was intellectually lazy of me." (Clark, 17:44)
Advice: Use VPNs abroad for privacy and security, not just content access.

Fidelity Target Date Funds—Naming Confusion ([32:01-33:02])

Listener Lesson (Tara): Discovered she was invested in a high-fee actively managed fund due to similar naming to the index version (Fidelity Freedom vs. Fidelity Freedom Index).
Clark’s Advice:

"...the index version...is enough that it would make a difference in how much money you have down the road." (Clark, 33:02)
Takeaway: Always verify fees/strategy, even when fund names are nearly identical.

Discover Network Cards for International Travel ([34:20-36:43])

Listener Concern (Angela): Capital One switching to Discover, worried about coverage for kids abroad.
Clark’s Advice:

"Discover...has zero coverage outside the United States...You want Visa or Mastercard for international travel for your kids."
(Clark, 34:54)
Alternative: Suggests the Chase Sapphire Preferred card for traveling students.

Saving Money at Costco ([36:43-37:40])

Listener Inquiry (Matthew): Tips for maximizing Costco membership savings.
Clark’s Costco Hacks:
- Look for items priced ending in “.97”; these are loss-leaders.
- Buy Kirkland Signature products for the best value.
- Avoid impulse buys by skipping the shopping cart, unless absolutely necessary.
- Shop at stores with concrete floors—not malls—for better prices.

2. Spaving: The Trap of “Spending to Save” ([23:20-31:00])

What Is Spaving?

Definition: Spaving is the act of spending money you didn’t intend to—often on unneeded items—because a sale or promo makes it feel like you’re “saving.”
Clark’s Confession:

"I have spaved again and again and again...retailers are so good online especially... at triggering this." (Clark, 23:20)
Examples:
- Buy-two-get-one-free deals
- “Extra” discounts for buying multiples
- Online and in-store impulse triggers (Amazon’s bundling tactics called out)

Why Is It Harmful?

Accumulates unnecessary items (especially electronics, with rapid depreciation).
False sense of thrift—“the dopamine hit” more than the value proposition.
Can seriously erode budgets by turning minor deals into costly overspending.

Krista’s Strategy & Confession

She’s been caught impulse-buying Instagram-advertised products.
Adopts two techniques:
1. Never buys through social media—researches the deal elsewhere.
2. Uses a 24-hour cart hold before committing, deleting 8/10 of prospective “deals.”
"If I see a great deal on a shirt or whatever...I open my closet and look...I already have two shirts that color. I don’t need that shirt...even though it's 40% off."
(Krista, 26:49)

Clark’s Tactics to Combat Spaving:

In Stores: Avoid using a cart unless absolutely necessary—harder to buy more than you can carry.
At Warehouse Clubs: Only grab a cart at the end when purchasing heavy/bulk items, proceed directly to checkout.
Returns: Encourages returning regret purchases, despite parking headaches.
Pet Peeve: Hates when people abandon perishables at the wrong spot in the store, possibly causing spoilage and driving up prices.

Additional Shopping & Savings Tips

Don’t shop at “fancy” mall stores; prefer stores with concrete floors.
Shop at off-peaks (Mon-Wed evenings) for easier trips and better deals.
Use streaming TV calculators on clark.com to cut down on entertainment costs, especially if you don’t need sports packages.

Notable Quotes & Memorable Moments

Clark on Financial Planning:

"Being with someone involves the heart and the head."
(Clark, 09:37)
Clark on Self-Awareness:

"Clark, heal thyself here. It is very, very common [to spave]." (Clark, 23:30)
Krista on Shopping Traps:

"I impulse buy too much...now if I add to cart, I hold it 24 hours...eight times out of ten, I never buy it." (Krista, 26:38)
Clark’s Costco Thesis:

"Shop in stores with concrete floors. Save you a ton." (Clark, 37:32)

Segment Timestamps

Clark Stinks – First Listener Post: 02:58
Fidelity Account Disappearance: 04:36
Credit Reports—Frequency Clarification: 06:18
Elder Law & Later-Life Marriage: 07:29
Pet Fees in Hotels: 11:01
Roth IRA Timing for State Tax Moves: 12:20
Frontier Pass Follow-Up: 13:28
VPNs for Privacy: 17:20
Clark Stinks Wrap-Up / Spaving Start: 20:47 / 23:20
Spaving & Shopping Psychology: 23:20–31:00
Fidelity Fund Naming Confusion: 32:01
Discover Card Int’l Use Concern: 34:20
Costco Savings Hacks: 36:43

Summary Takeaways

Listener feedback is an essential component—Clark is open to corrections and diverse perspectives.
“Spaving” is a modern financial trap fueled by retailers and digital shopping environments.
Saving money is as much about mindset and self-discipline as finding bargains.
Practical, actionable changes—pause impulse buys, use index funds, know your payment networks, and shop strategically—offer compound benefits over time.
The show blends humor, lived experience, and expert advice, making financial literacy relatable and accessible.

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Transcript90 lines

[00:00]
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[01:05]
Clark Howard
It's my pleasure to welcome you here to the Clark Howard Show. You know our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life.
[01:18]
Krista
You always point at me when you're saying that.
[01:21]
Clark Howard
Well, it's fun. I know, because you're kind of standing there and people are like, why is she standing there? Well, it's Friday, so it's a little different because that means it's time for me to hear from Krista. Your posts.
[01:33]
Krista
Not my posts, the listeners.
[01:35]
Clark Howard
The listener's post. Your post.
[01:38]
Krista
The Clarkey's on how I have been
[01:40]
Clark Howard
stinking it up with terrible smelly advice. So later, after we've had Clark Stinks, you love a deal like I do. There's something that I do to conspire against myself that you may do too. That can eat up your wallet. It's called splaving.
[02:06]
Krista
Spaving. Isn't it Spaving.
[02:08]
Clark Howard
I've heard it. Splaving.
[02:10]
Krista
Okay.
[02:11]
Clark Howard
Spaving. You know, it's probably got more than one way people say it, but the same concept.
[02:15]
Krista
Okay. I think it's spaving.
[02:18]
Clark Howard
Spaving.
[02:18]
Krista
Yeah. I've always heard his spend saving.
[02:21]
Clark Howard
Okay. And saving. No. But I'll go with is it splurge?
[02:24]
Krista
Are you saying splurge? Saving.
[02:26]
Clark Howard
Yeah, it's kind of like. I mean, that's why. I guess I've heard it both ways. But whatever.
[02:31]
Krista
Sorry.
[02:32]
Clark Howard
You say spade, I say splave. Okay. We're going to talk later about what that means and how that gets you to conspire against yourself. But Right now it is time to find out where I didn't do encouraged you to speak. You must think I'm pretty stupid.
[02:50]
Commercial Narrator 1
You should be ashamed of yourself.
[02:51]
Clark Howard
Well, maybe I'm wrong. Maybe I'm wrong. Maybe you're right, pal.
[02:58]
Krista
All right, we're gonna start with andy in Mississippi. Mr. Clark, in a recent episode, you mentioned the American dream in relation to homeownership. To quote Wikipedia, the American dream is a phrase referring to the national ethos of the United States. That every person has the freedom and opportunity to succeed and attain a better life. There are too many people that make this mistake. But I expected you to be above this error.
[03:27]
Clark Howard
Thank you for that. And you are right. A lot of people refer though also to home ownership as being the American dream. I mean, you're talking about the American dream being that you can come from nothing, be a classic immigrant to the United States who comes with nothing. And America offers the opportunity to become financially independent. And same thing for people born here who may be born without much. But a lot of people also use that term for the American dream being owning a home. And the reason is that most people don't create middle class wealth through investments. Although that's changing because of the 401ks and IRAs. They do it through owning a home through the years. And that creates the family wealth. They talk about that being intergenerational wealth and on like that. But thank you. You are correct. I've stretched the definition.
[04:36]
Krista
Tom in North Carolina says the coming of summer humidity in Florida does not give you a pass on stinkiness. You told the story of the woman on all of whose money held by Fidelity had disappeared. I waited and waited to find out how did this happen. All you said was that it wasn't an isolated incident and it had something to do with a Fidelity computer problem. How vague and superficial is that? Could it happen again? Please do not apply for any job as an investigative reporter.
[05:07]
Clark Howard
So, Tom, Fidelity has not been forthcoming. But it wasn't just to her. They had a computer error that wiped some customers files clean. They were able to restore them after a period of time. But for people who did not hear that story when people called a customer, no service at Fidelity. Well, this woman in particular was told, who's coming from Colorado, was told, oh, well, maybe your accounts are at Schwab and you just think they're at Fidelity. There was no trace of any record that she had ever had these multiple accounts with Fidelity. So the point of the story was whether it is just a computer problem, foreign hacker, whatever I want you to have proof with recent statements of what accounts you have and what money you have in them. If there is for some reason a catastrophic disappearance of the record of your money that you have documentation to speed up the process of having it restored to you.
[06:18]
Krista
Sherman in Georgia says you missed the mark slightly when you stated you can get a credit report once a year. @annualcreditreport.com it was permanently changed from once a year to once a week in 2023. The URL needs to be updated for sure.
[06:33]
Clark Howard
So Sherman, the reason I say once a year and thank you, you are correct is that was an administrative decision by Equifax, TransUnion and Experian subject to their whims. It is not statute. The statute requires that you have access to one free report per year. The great news now and maybe why the three credit bureaus did this is is now people can see their reports so many different ways that the credit bureaus@annualcreditreport.com have an opportunity to try to sell you all kinds of memberships so by instead of fighting them, joining all the others that are now competing to offer access to your credit reports for free whenever you want them. Maybe they're permanently or semi permanently going to continue this, but they're not statutorily required to do so.
[07:29]
Krista
April in Florida says Not Enough Warning on Later in Life Marriages I'm writing this as an elder law attorney who has seen the whole gamut with later life relationships. Everything you said was right on but you didn't go far enough, especially when it comes to living together, married or not. People need to ask the difficult questions like how long will I live if you die first? What happens if one of us needs long term care? Who pays? These issues don't involve just YouTube but also your families and the government. For instance, will the government require I use my funds for your care? I've seen surviving spouses kicked out of their homes by relatives before the funeral, entire estates diverted over the new spouse's family, new spouse considering divorce because of long term care expenses, adult children taking over and excluding the life partner, and all sorts of other nightmares all because of poor planning. The couple should see a qualified elder or estate planning attorney before making commitments. At the very least, make a thorough checklist of financial and health issues that could come up and work out how they would be dealt with and make sure it's properly documented. Most often the problems arose not because one partner was dishonest or had negative intentions, but because the couple never addressed the issues made Assumptions and put their heads in the sand.
[08:48]
Clark Howard
April, you are so right. I can't even begin to tell you. There's a story I told about six or seven years ago, and a neighbor stopped me on the street when I was out for a walk. And she was crying. And I thought she was crying because her husband had just recently died. And she was grieving the loss of her husband. But then the most shocking thing happened. Her stepchildren. And she had been later in life, marriage. So the. The children were his and she had never raised them, but they were adult children when they married, not only was she grieving his passing, but the kids kicked her out of the house. And she said, is there anything I can do? This goes right to what you're saying, April. There was nothing she could do. There was. He had said, you know, if I die first, you'll just be able to live here as long as you want. Has no force in law. And the kids wanted the house and kicked her out. Sold it right away. And I don't know where she went. Never saw her again. But it's terrible. The thing you point out, you know, so often people do, there's gray divorce and gray remarriage or people will. Will live together without benefit of marriage. And we're only thinking about our enjoyment with the other person, our life with them. But what April has said, you need to also think about, you know, being with someone involves the heart and the head. And April, I really appreciate you taking the time to post this. A lot of people aren't even aware of the subspecialty of law, known as elder law, that deals with all these issues. And one of the things that an elder law attorney can be so helpful with are later in life issues, medical and ownership of property.
[11:01]
Krista
Okay, a few people wrote in about this one. Clark, totally switching gears here about pets and hotels. Tom in Florida says you stink like a cat that has marked its territory in a hotel room. Pet charges in hotels are used to clean, vacuum and disinfect rooms after pets stay with their humans, stinking up the place sheets and other things. I don't have a pet, I don't want a pet, and I don't want to stay in hotels that board pets. And that sentiment was shared.
[11:33]
Clark Howard
How many people were talking smack about the pets?
[11:37]
Krista
I got several of them for sure.
[11:38]
Clark Howard
Same kind of thing.
[11:39]
Krista
Not, but just about, you know, saying like, why it's necessary to have these fees and stuff because they. Some people are allergic too, and they really need to thoroughly clean these rooms when they have a pet in there.
[11:49]
Clark Howard
So you are assuming that they do extra cleaning because a pet has been in the room. It's always hard with junk fees to know is it just a revenue source or is it something that actually leads to a different protocol at a hotel? Love to hear from some people who are insiders who've worked in the hotel industry. What really happens in terms of how a room is cleaned after someone stayed in it with a pet.
[12:21]
Krista
Andrew in Florida says two items that are probably not mentioned enough. 1. Everyone should convert at least a minimum amount of money from an IRA to a Roth. $1 is fine with fidelity. This way you can start the 5 year clock as the regular Roth accounts and the 401k Roth accounts use separate clocks. 2. If you know you're moving from a high tax state for me, New Jersey to a low tax state for me Florida within a few years you should put money in the regular 401k as opposed to the 401k Roth. In my case I was saving about 8 to 9% in state taxes that I could avoid by converting it in Florida.
[12:54]
Clark Howard
Andrew, thank you for that. And so you have New York where the tax maxes out I think at 14.8%, California just over 15%. New Jersey you say is 8 or 9. There are some other states that have very high state income taxes and I never mention what you just mentioned and this is one of the reasons we do. Clark stinks that I always talk about the federal tax from converting. Never talk about the state income tax implications.
[13:28]
Krista
Janet in Virginia says Clark, months ago you spoke in the podcast about your purchase of the Frontier Pass deal. At the time you said you were going to use it and let us know how it went and what your experience was. I've been waiting and waiting to hear your report, but I haven't heard you mention it since. Are you using your past? What have you experienced? How is flying Frontier? Inquiring minds want to know. And by the way, I'm sure my family and friends are getting tired of hearing me say just go on clark.com and Clark Howard says love ya.
[13:59]
Clark Howard
So Janet, here's the true story. I have tried to use the Wild Pass at least half a dozen times and every single time there have been no wild seats available. So let me tell you how this works. Frontier markets these passes. They've been selling a summer pass recently and the idea is that one day before travel you can book a ticket at a base of it works out to be like 19 bucks and they're never available for me When I want to go, I don't have. I wish I had the flexibility that I would just say, well, I'll go whichever day this week I can use the wild pass. And I have not been able to be that flexible since I got the wild pass. So I'm 04 right now. We're talking about. I just took money, put it in the pass, and threw it away. Lane.
[15:07]
Krista
Well, you've got half a year left, so.
[15:09]
Clark Howard
No, no, we have till the. When I bought it, it was a special extended one. That's good. Well into 27.
[15:17]
Krista
Oh, good.
[15:18]
Clark Howard
Okay. I got. I got more than that. But Lane, you know, I. I signed her up for it, too. She's like, really? You volunteered for us without asking me to fly Frontier? Now, I have flown Frontier before, and it's not the greatest product in the world, from my experience in the past, but, I mean, being able to fly for almost nothing on short notice in theory, is great. By the way, international travel, you can book it 10 days out. So there's more flexibility with that.
[15:50]
Krista
Leon in California says Clark missed the mark when saying that virtual home staging was a bait and switch. I'm a retired Realtor, and my wife is a retired home stager, and ethical realtors and home stagers clearly label any virtually staged rooms as being virtually staged, so buyers understand that the room is not staged with real furniture. Furniture and accessories are usually not included in a home sale. So buyers already understand that either real or virtual staging furniture is not included. Virtual staging is an affordable way to make a home look lived in and give buyers an opportunity to visualize themselves in that home.
[16:24]
Clark Howard
Leon, thank you for that. Now, what I'm worried about is deception. But if somebody goes to tour a property, then that goes away. But, you know, I'm obsessed with actually staging a home for sale. And we've done that again and again where we hire a staging company or we use. Lane's got really great taste. We use her own furniture. And I find that properties are more likely to stand out and potentially sell quicker when they are staged. It is not cheap to hire a staging company, but if it gets a sale done, you know, we're in a tough time right now to sell. It's harder for sellers to find buyers. Something that helps you stand out, I think is very useful. But virtual staging is very common now.
[17:20]
Krista
Linda in Florida says Clark stinks. He recently said that a VPN isn't really necessary unless you're traveling abroad and want to see sports. When my husband and I travel anywhere, we use a Paid vpn. Clark said the only thing it does is keep your information private. Well, isn't that the good goal? Who knows who's staying in the room next to you or sitting in the airport seat next to yours? We think VPNs are great and we don't watch sports.
[17:44]
Clark Howard
Well, Linda, not everybody's perfect if you don't watch sports. No. Anyway, you're right. I ignored the most obvious reason someone should have a vpn, which is privacy. And that's how I use mine. And I've been really happy using and having a vpn. I just have an obsession if I'm outside the country in the fall when a lot of better travel deals are available for me to be able to see my beloved football. So that's why that's all you heard from me. So that was intellectually lazy of me to only talk about my own personal obsession instead of the primary reason someone would use a vpn. And you know the great thing? If you are one of the people like Linda and you're not into sports, streaming content is so much cheaper for you. It's unreal how cheap video content is excluding sports because the big cost of streaming now is all sports. So, Linda, I want to offer you back something that may save you money. Anyone else? If you're like sports? Not for me.
[19:09]
Krista
Use our tool@clark.com yeah, we have a great streaming TV.
[19:13]
Clark Howard
Add the content that's important to you and you watch. When you, even if you're not into sports, just add sports content as being important to you. You watch the price of your streaming bill go crazy high. And it's possible for you to, if you want a lot of streaming, to reduce the cost by 75% if you exclude sports. So thank you for your thing about the real reason someone should use a VPN and not somebody like me who's just football obsessed. Football is my life. I mean, right now we're right in the middle of the whole World cup thing and that to me is something I'm not excited by. I'm sorry. I know soccer is a much more, as it's called everywhere else in world football is much more popular sport than American style football. But I just have never been able to get into that, even though my kids played it well. Coming up ahead, spaving, splaving, call it whatever you wish. What is it? How does it undermine your finances? We're going to talk about that. And for all of you posted on Clarkston, thank you for doing so. We all learn from each other and I appreciate so much when you take the time to post.
[20:47]
Commercial Narrator 3
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[21:54]
Clark Howard
here tonight to bring women back to their rightful place.
[21:58]
Commercial Narrator 4
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[22:03]
Krista
It's easier to accept a story than believe that the people around you are monsters.
[22:07]
Commercial Narrator 4
The battle isn't over.
[22:09]
Krista
There comes a time when you have to take action, when you have to choose your own destiny.
[22:13]
Clark Howard
Never quite as it seems.
[22:16]
Commercial Narrator 4
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[22:54]
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[23:20]
Clark Howard
Okay? We have a consensus that I'm wrong and it's spaving that I'm worried about. So spaving is impulse buying because something's on sale and you buy something you don't need. And you know who's been very guilty of that over the years? Yours truly. I have spaved again and again and again. So Clark, heal thyself here. It is very, very common. And retailers are so good online especially, but also in physical stores where they'll do, you know, buy two, get one free, buy one, get 50% off a second. Anything that creates this impulse where we feel like we got to do it because we're saving money. I don't know if you've noticed how much Amazon uses our natural instinct to spave against us where they'll say over and over again, you see on Amazon, buy two and get this additional discount routine now on Amazon as a way of getting you to spend more money. What happens is we see an item on sale and it's almost like a dopamine hit. We just, oh, I want the deal, I want the deal. And you know, I'm so obsessed with finding bargains that I had to teach myself to fight the instinct to buy something just because it was on sale. But the bigger one for me was this thing of we'll get a second one for 50% off or buy this bonus item, buy two, get a third one free. Totally worked on me. It's something that works because we want that deal. We chase that deal and we grab something we didn't need to spend money on. You know, having a closet full of things gathering dust is not a great idea. And nowhere was my Achilles heel worse with this than anything that was any kind of electronics. I'd buy something because it was a deal and then not use it. And what happens with electronic items? The value of them drops like nothing you've ever experienced in your life. The value just drops just like, I mean drop a rock. That's what's happening with electronics when you buy them. They're always cheaper later. I mean the only exception right now is with the memory shortage and computers actually going up in price right now. And the sales we're going to have are going to be non sale sales on computers. That's an item that what you got. If it's working, you keep on using it, plain and simple. So what's your weak spot on spaving?
[26:39]
Krista
You know, I am really bad about lately on Instagram, I'LL be offered some. And of course, the algorithm is feeding me stuff for my aged woman, right? Like, oh, here's this. Like, here's this great collagen powder you should be using. And all these different sort of face creams and stuff, like things for skin and beauty and that kind of stuff for women who are getting older. And so now what I've started to do is, well, first of all, if I see a product I like, I'd never buy through there. I go and research it online and look at what it costs other places. Usually it's cheaper. And the other thing I do is when I add to cart just in general for myself, I'm holding it there for 24 hours because I feel like I impulse buy too much. And I'm more, I'd say, like eight times out of ten, I never buy it. I just hold it there and I come back to it the next day. And that's helping me a lot. Not buy stuff. Like, if I see a great deal on a shirt or whatever, I'm like, do I really need that? And then I go open my closet and look, I, oh, I already have two shirts that color. I don't need that shirt that I put in my car, even though it's 40% off or whatever. And so that is helping me to, like, you know, quell that.
[27:49]
Clark Howard
And in physical stores is you may know, if you're a longtime listener or viewer, I do not get a shopping cart. Shopping cart is a magnet for impulse buys specials. So by not getting a cart, I'm able to really resist what I buy. Because you only hold so much in your arms. And if I'm, let's say I'm in one of the warehouse clubs and I'm going to be buying something big and heavy, replenishing something for the home, I don't get a cart till the very end. Oh, and I go get the cart, go get that item, go straight to checkout. And speaking of which, when is Costco going to get with the program? Because Sam's Club and BJ's Wholesale both, you can ring yourself up on your phone on the app. You check yourself out on the app, it generates a QR code, and you go to the exit, they scan your QR code and you're done. And at Sam's, if it works right? She does about 25% of the time, they just wave you right through because AI with a zillion cameras has already validated what you have with you.
[29:07]
Krista
I have to Quick confession, Costco confession. I went the other day, and I did get a cart because I have a list, and my list was dog food, paper towels, toilet paper, and things that I knew were going to be big and heavy. And that was all that was on my list. So I go in. Well, of course I see a clothing item, like, when you walk in like this. And I was like, do I? Oh, I kind of. I don't know. Do I like it? Do I not like it? I do like it. Okay, I'm gonna buy it. And brought it home with me. And immediately regretted buying it. Cause I was like, I don't need this again. So I forced myself to go back. The punishment is having to find a parking spot in the Costco parking lot again on a weekend and returned it immediately. But it's just.
[29:49]
Clark Howard
So try my way.
[29:50]
Krista
Well, I didn't. I couldn't have done it then because I. I didn't need to walk through. I knew what I had, and it was all heavy, so I definitely needed a cart. But Costco is great because you can just return stuff really easily, so. Or other stores, too, I'm sure.
[30:04]
Clark Howard
All right, here's my. Wait, wait. I got to give one pet peeve. Okay. All right. You shop at Sam's Costco, or BJ's Wholesale, and you pick up an item, and then later you decide you don't want it, and you abandon it somewhere. When people do that with refrigerator or frozen items, I'm like the warehouse club police. I don't say anything to them. But if I see somebody dump something out of their car that's refrigerator, frozen, I take it right back to the department and put it back.
[30:36]
Krista
Well, as long as you see them do it.
[30:38]
Clark Howard
If you don't, I don't. If it's been sitting for a while, I don't do it because it may have spoiled.
[30:43]
Krista
Give it to a manager.
[30:44]
Clark Howard
But that's. That's money down the tubes, and I just hate that. I mean, part of what you're getting with the warehouse clubs are these very low markups, and you erode the incentive. Other than Costco that has the fixed markup, you erode the incentive for BJ's wholesale and SAM's to not raise prices a little, to deal with the spoilage that people cause by abandoning items. Just wherever. Okay, sorry. No pet peeve.
[31:16]
Krista
I get it. When I'm in, like, Marshalls, I have a compulsion. I'm in, like, Marshalls, TJ Maxx somewhere like that, and I see clothing that's put in the wrong size area. I have to move it that's because
[31:29]
Clark Howard
you worked at the Gap.
[31:30]
Krista
I have to move.
[31:30]
Clark Howard
We have new khakis today at the Gap. What was he used to say to people?
[31:33]
Krista
Oh yeah, flat front, fitted. Yeah, whatever.
[31:37]
Clark Howard
I remember Marshalls and TJ Maxx are all the same.
[31:40]
Krista
Yes, yes. And home goods. But anyway, yeah, it's like a compulsion because I think somebody who's this size can't find isn't going to find this and I move it. Okay. Questions? Tara in Virginia. I think it's a compulsion, she says. For years I believed I was invested in a low fee target date fund through Fidelity. Specifically, I held the Fidelity Freedom 2040 fund.
[32:02]
Clark Howard
Oh.
[32:03]
Krista
Based on the name and my understanding at the time, I assumed it was a simple low cost index based option. After hearing and reading your constant nudges to check retirement fund fees, I double checked mine and it turns out I was wrong. This is actually one of Fidelity's higher fee actively managed target date funds. There is a similarly named fund, the Fidelity Freedom Index 2040 fund, that is significantly lower cost and built on index funds. The naming is so similar it's easy to confuse the two. And I did. What's more frustrating is I worked with a Fidelity advisor when setting this up and now I question whether I was steered toward the higher cost option without fully understanding the difference. The good news is that your advice prompted me to review this and I'm now in the process of moving my investments to a lower fee index version. I wanted to share this experience because I suspect I'm not alone. Many people likely assume that Freedom and Freedom Index are interchangeable when they are not, and the fee difference over time is meaningful.
[33:02]
Clark Howard
So depending on when you originally set up the account and the Fidelity representative helped you, Fidelity didn't have the index version. They added that because of competitive pressures from Vanguard being all about target funds being index funds. So Fidelity, if you're in a Legacy Freedom fund, you're paying typically more than five times the fees per year to be in that versus the index version. And Fidelity would make the case because they believe in active investing. But they offer indexing because the competitive pressures I alluded to, they would not look at it as malpractice, encouraging you to go into a fund that's more than five times the cost. But my belief is a target retirement fund, you want to be as efficient as possible and that's why you go in the index version. The additional amount that you'd end up with over the decades by being in the index version versus the original Fidelity Freedom kind of product is enough that it would make a big difference in how much money you have down the road. Expenses would be so much higher. Yeah, you'd have a lot more money.
[34:20]
Krista
Okay, I'm going to go to Angela in Georgia. I've used a Capital One card for years to pay for expenses for my three college age children. They are all authorized users and charge various expenses I've agreed to cover like health care and car repairs on that card. I just received a notification that my Capital One card is transitioning to the Discover Network. A lot of people wrote in about this, Clark, do you think I need to switch to a different card? I'm particularly concerned about them using it for emergencies while studying abroad, which all three plan to do at different times. Is Discover sufficient for that or should I get them all a visa or MasterCard instead?
[34:55]
Clark Howard
Okay, thank you for this question. All right, so what happened was Capital One bought Discover and the reason they did is they now control another payment network to compete against the Visa, MasterCard Cartel. And Discover, even though it's extremely widely accepted in the United States, has zero coverage outside the United States. So what Capital One did is cards that are generally geared towards people that are not world travelers. Because Capital One so sliced and diced with different card products who they're targeted to. A Capital One card that runs now on the Discover Network is useless for your kids traveling outside the United States. Capital One has a bunch of other cards that will stay on, typically Mastercard or Visa, and those are the ones you want for international travel for your kids. If I would say if your kids are not doing a lot of travel but will do things like study abroad. I like the Chase Sapphire preferred card in that kind of environment for your kids to have overseas because it has a lot of nice benefits to it at a $95 annual fee and no foreign currency junk fees with it as an option. But the Capital One cards that run on the Discover Network are great to have as regular everyday cards. There's no reason not to have them as a regular everyday card. Just not useful for travel.
[36:43]
Krista
All right, I'm afraid we might be becoming the Costco show, but Matthew in Ohio said. Hi, Clark. My wife and I recently became Costco members for our growing family. Any recommendations on how to save the most money at Costco? Thanks to listening to you and your team's advice over the years, we have reached a net worth of $650,000 at the ages of 32 and 29. Keep up the wonderful work.
[37:06]
Clark Howard
Oh, that's so great.
[37:07]
Krista
Wow.
[37:08]
Clark Howard
Yeah, I mean, you use one of our calculators. You see, even if you never contributed $. That's not what I'm saying you should do.
[37:14]
Krista
No.
[37:15]
Clark Howard
And you see what that 650 would be worth and let's say another 35 years. Man, that's fantastic that you've been able to do that. Barely one of you in your early 30s, the other 29. So how do I save money at Costco? Number one, we talked earlier about the cart not having one. Number two is you look for the items that are marked 97. Those are items being sold below Costco's cost. And they're the real screaming deals inside a Costco. Sam's has a similar system. Items end and 1 penny. Occasionally an item in Costco that ends 0, 0 for the price also mark down. So those are the bargains I love. But the greatest tax on your wallet in Costco going full circle is turning a good thing into a bad thing by buying impulse items. And then the ultimate way to save in Costco is. Do you know our nine pound dog's name? Kirkland Signature. Sam's Club members by members. Mark BJ's Wholesale members by Berkeley and Jensen and their other private label brands. Costco. Kirkland Signature now one of the largest brand names in the world in terms of volume of goods sold. I think this year they'll sell $75 billion worth of items that are Kirkland Signature labeled items because you're getting a discount at a place that already is a discount. Kirkland Signature is the greatest. Not our dog. Although Lane would disagree. Our dog's the greatest. But what Costco has been able to do with the Kirkland Signature label is something that people in merchandising, advertising and retail marvel at. The most successful private label in the history of retail. That is the key. Yeah. Do I have an obsession with the warehouse clubs? You know, I do. And the whole reason is the markup is the best. You know, I go into these things we used to have called Mama Ma Ma, I can't say the word. Malls, which apparently are on a comeback right now. And they got the fountains and they got the fancy floors and the stores are beautiful and all that. Who's paying for that? Who is paying for that? You are. I don't shop in stores that don't have concrete floors. That's the key. Let me put it the other positive way. Shop in stores with concrete floors. Save you a ton. And that's it for us today. I thank you so much for joining us. I hope that the weekend is a fantastic weekend you have in front of you. Speaking of the weekend, you heard Krista talking earlier about shopping on a weekend. Shop in stores. Monday, Tuesday, Wednesday nights. Whatever kind of store when nobody's in them. That's the best time to be shopping. And then the weekend. Go have fun. Go outside, don't be stuck in traffic. But have a great time and do anything you can to save more, spend less and avoid getting ripped off. And we'll see you Monday.