The Clark Howard Podcast – Episode Release: December 12, 2024 Episode Title: Subscription Wrangling / Estate Planning in 3 Steps

Introduction

In this episode of The Clark Howard Podcast, host Clark Howard delves into two significant topics affecting personal finances: the pitfalls of subscription services and the critical steps of estate planning. With insightful discussions, listener questions, and practical advice, Clark equips listeners with the knowledge to navigate these areas effectively.

Subscription Wrangling

Timestamp: 00:21 – 05:37

Clark begins by addressing the growing frustration with subscription services, particularly focusing on Uber's recent controversies. He highlights the challenges consumers face when attempting to cancel subscriptions, emphasizing how companies like Uber may complicate the cancellation process to retain customers.

Key Points:

• Auto-Renewal Traps: Clark shares his personal experience with multiple streaming service subscriptions he wasn't utilizing. By canceling these services and questioning the value they provided, he uncovers unnecessary monthly expenses.

  "I have a number of credit cards and there were all these subscriptions to streaming services that I didn't know we had... I just go in and start canceling them all because I don't watch any of those things."
  (02:15)

• Preventing Unwanted Charges: Clark advises turning off auto-renewal for all subscriptions to avoid ongoing charges. For services that make cancellation difficult, he suggests using a small remaining balance on a gift card as a payment method, leading to a declined transaction that halts the subscription.

  "Use a small remaining balance... it becomes your automatic stop on all these crazy subscriptions that are running up your bills."
  (04:05)

• Listener Interaction: Clark recounts a conversation with his family about canceled subscriptions, illustrating the common struggle of managing household subscriptions and the importance of financial transparency within families.

  "Why am I paying for it and what price are we paying per month compared to what deals there are?"
  (04:50)

Listener Questions and Advice

Timestamp: 05:37 – 16:16

1. Tax Return Retention Listener: MJ from West Virginia

Clark discusses the appropriate duration for keeping tax returns, aligning his advice with that of Jonathan Clements, a guest from a previous episode.

"Both Jonathan and I say keep your returns, all your supporting documents for seven years."
(07:14)

2. Managing Excess Savings Listener: Jennifer from North Carolina

Jennifer seeks advice on managing $200,000 currently held in a savings account at age 52, with ample retirement funds.

Clark's Recommendations:

• Avoid Paying Off Low-Interest Loans: Recommends against paying off the primary home at 2.75% or a rental property at 4%, as investment returns could surpass these rates.

  "I would not pay off your primary home at 2.75% since you can earn more even in a simple savings account."
  (09:15)

• Investment Strategies: Suggests dollar-cost averaging into index funds, fully funding a Roth IRA for tax advantages, and avoiding new investment properties due to the current housing market.

  "I would look at dollar cost averaging into investments, into my favorite... index funds."
  (09:45)

3. SIM Swap Scam Prevention Listener: Kenneth from New Mexico

Kenneth shares his experience with a SIM swap scam where a thief hacked his cell phone account, leading to unauthorized overseas calls.

Clark's Advice:

• Enable SIM Lock (SEMLOC): Protects against unauthorized changes to the cell account, preventing criminals from accessing two-factor authentication codes.

  "By putting the SIM lock feature in place, it means if somebody does hack into your account and then try to steal your cell phone service, they can't even."
  (12:17)

• Awareness and Security Measures: Encourages listeners to activate SIM locks and regularly monitor account changes to safeguard against similar scams.

Estate Planning in 3 Steps

Timestamp: 18:28 – 25:30

Clark transitions to the essential topic of estate planning, underscoring its importance even for those who are currently financially secure.

Key Steps:

1. Create Legal Documents:

   • Wills and Durable Power of Attorney: Establishes who will manage your affairs and make decisions if you're unable to do so.
   • Digital Will: Details the management of online accounts, digital assets, and provides access instructions for critical information.

   "You don’t want to leave anything to a bank safety deposit box... discuss your decisions with your trusted loved ones."
   (24:02)

2. Communicate with Heirs:

   • Transparency: Clark emphasizes the importance of discussing your estate plan with your heirs to prevent misunderstandings and disputes.

     "Sit down with your heirs and tell them what your plan is. Let them even read the will."
     (24:30)

3. Regular Updates and Accessibility:

   • Keep Documents Current: Regularly update your estate plan to reflect changes in assets, relationships, and personal wishes.

   • Ensure Accessibility: Ensure that trusted individuals know where to find these documents and understand your intentions.

     "Do one now and check to see if your state has their free forms that you fill out... make sure your loved ones know where you've kept everything."
     (24:50)

Warren Buffett's Advice: Clark references Warren Buffett, highlighting Buffett's belief in proactive estate planning for the sake of family harmony and legacy management.

"Warren Buffett says something I think is very important... it's your money and you can choose to distribute it how you wish."
(25:10)

Clark Minute: The Case for 15-Year Mortgages

Timestamp: 16:33 – 17:35

In a brief segment, Clark advocates for considering 15-year mortgages over the more common 30-year terms.

Advantages Highlighted:

• Lower Interest Rates: Typically around 0.6 points lower than 30-year loans, resulting in significant interest savings.
• Equity Building: Faster accumulation of home equity.
• Interest Savings: Overall payment towards the mortgage is reduced, saving substantial amounts over the loan term.

"Cut years off that mortgage. You're going to pay so much less interest... and building a whole lot more equity."
(16:38)

Recommendation: Encourages listeners to explore refinancing into a 15-year mortgage if financially feasible.

Final Listener Questions

Timestamp: 25:30 – 31:38

1. International Travel to Bolivia Listener: Marcelino from New Mexico

Marcelino and his wife plan to drive 25 hours to Bolivia to save on airfare and seek advice on preparations.

Clark's Recommendations:

• Cash vs. Credit: In rural areas of Bolivia, cash is preferred as credit cards are not widely accepted.

  "Credit cards are accepted in the big cities... elsewhere, it's going to be all cash."
  (28:30)

• SIM Cards: Advises purchasing a local SIM card upon arrival for better connectivity and cost management.

  "Make sure your phone is unlocked and you can put a SIM in your phone."
  (31:00)

• Financial Safety: Recommends alerting multiple banks before traveling to prevent issues with ATMs and ensure access to funds.

  "Having ATMs spread across your accounts helps in case one fails."
  (30:00)

2. Roku TV Reviews Listener: John from Texas

John inquires about recommendations for Roku TVs, particularly 43-inch models.

Clark's Insights:

• Size Recommendation: Suggests opting for larger sizes (55 inches or more) for a better viewing experience.

  "Yeah, John, that's way too small for a television. At 43, you got to go 55 at least."
  (31:48)

• Platform Preferences: Prefers Roku and Fire TV platforms for their ease of use and seamless integration.

  "They are the two smoothest, easiest to use... the pictures on them... are really great."
  (32:00)

• Affordability: Notes the competitive pricing of Roku TVs, especially during the holiday season.

Charity Highlight: Clark's Christmas Kids

Timestamp: 31:58 – End

Clark concludes the episode by promoting his long-standing charity, Clark's Christmas Kids, which has been supporting children in foster care for 34 years. He encourages listeners to contribute by selecting gifts or donating cash to ensure foster children experience the joy of Christmas.

"Help these kids have Christmas again... Our listeners have been so unbelievably generous over these 34 years."
(34:00)

Call to Action: Visit clarkschristmaskids.com to participate and make a difference.

Conclusion

In this episode, Clark Howard provides valuable insights into managing subscription services and underscores the importance of proactive estate planning. Through personal anecdotes, listener interactions, and expert advice, listeners gain practical strategies to optimize their finances and secure their legacies. Additionally, Clark's commitment to community welfare through Clark's Christmas Kids exemplifies his dedication to empowering others both financially and socially.