Ask HTM - Roth Emergency Funds, Buying Out A Lease, & Financial Advice For Graduates #814 - How to Money

Episode Transcript
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Speaker 1 (00:00):
Welcome to How to Money. I'm Joel and I am Matt,
and today we're answering your listener questions.

Speaker 2 (00:24):
Jill, you know what I love is that everyone knew
exactly what to expect here Monday morning, from how to Money.

Speaker 1 (00:29):
We've got listen to questions to get to Hope you're
enjoying a nice cup of coffee or walk around your
neighborhood while you're listening to us.

Speaker 2 (00:35):
While I just shouted in your ear, I'm sorry. I'm
sorry for that. I see, I'm trying to tone it down.
Oh yeah, talk a little nice and contra, create a
nice rhythm, repeat some affirmations. You are smart, you will
conquer today.

Speaker 1 (00:48):
You got this?

Speaker 2 (00:50):
Would you do some ASMR affirmation podcast readings for our listeners?

Speaker 1 (00:56):
You know I'd consider it.

Speaker 2 (00:58):
Uh No, we do have some great money financial topics
to get to. Today. A listener is asking whether or
not she could essentially use her roth ira as an
emergency fund. We are going to cover buying out a lease.
We're gonna provide some financial advice for new graduates. All
of that plus more today, Buddy, during our ask how

(01:18):
to Money, you.

Speaker 1 (01:19):
Said buying out a lease it means a car lease right, car,
least specifically, man, things have changed quite a bit on
that front. We don't love the idea of leasing a car,
but if you did lease a car and the lease
is coming to an end, there's a lot to think
through on that front. So we'll get to that and more.
But first off, Mat, I just want to mention. We
talk about subscriptions all the time and the proliferation of
said products, but who realized that a food chain I

(01:44):
think they're nationwide is now getting in on the action.
Chuck E Cheese, bro Chuck E Cheese.

Speaker 2 (01:50):
I assume you're gonna say Panera. That's when my mind
went to when you said a nationwide change.

Speaker 1 (01:54):
Well, I think they did have something like like a
coffee subscription or something. Oh, I think we talked about
that a couple of years ago. Yeah, but this, I
believe there's three tiers chunky cheese, that's what we call
it in high school. And I think you can spend
up to thirty dollars a month on a Chuck E
Cheese subscription which offers you like discounted pizzas and three tickets.

Speaker 2 (02:13):
Is it a subscription or is it a membership?

Speaker 1 (02:15):
I get it's the same, right, what's the difference?

Speaker 2 (02:17):
Language matters?

Speaker 1 (02:18):
Okay, they sound the same to me.

Speaker 2 (02:21):
I guess when you say subscription, it does sound slightly
more ridiculous. But if it's not unlike like I like
we have a membership to six Flags like six Flags
slash Whitewater because those aren't comparable. You pay once and
then you can go as many to I have a
membership to Costco as many times as you want. I
guess you could call it you you have a Costco subscription. Well,
I would say if that's a form of local entertainment,

(02:43):
that and you've got a bunch of kids, or at
least one or two, and that's something you want to do.

Speaker 1 (02:47):
They just love the ball pit.

Speaker 2 (02:48):
You got to run the numbers.

Speaker 3 (02:49):
Man.

Speaker 2 (02:49):
If the numbers make sense, I'm all for it. It
makes me think of it, like, do they sell subscriptions
or memberships at the like the Jumpy trampoline place? Oh? Yeah,
I think they do. They see that's something more like
a rock climbing gym. That's something that we've considered at
least membership.

Speaker 1 (03:05):
Yeah.

Speaker 2 (03:05):
I don't. I don't have a Gill. I don't have
a CrossFit subscription. Joel, although it does feel like it
because it just automatically deducts. Yeah, but yeah, okay, maybe
you're changing my mind.

Speaker 1 (03:16):
I don't know. It's hard to know what's what's the
difference between a membership and a subscription because they kind
of the lines are bleeding here, and at least in
when we're talking about Chuck E Cheese, I don't know.
You'd have to run the numbers. How often would you
have to go there in order to really make this
thing pay off?

Speaker 2 (03:29):
Yeah, you would want it to pay off, And so
you're asking what is the difference. One of the differences
in my mind as I think through the two, is
that a membership is intentional and a subscription feels like
something that is happening to you. Okay, right, And so
that's why I said, like, sometimes it feels like my
gym membership is a subscription because it kind of happens
to me. I see the charge show up on my
credit card statement. But that being said, it's something I

(03:50):
very much intentionally do, like freaking three times a week.
I am excited to be there. But if there is
something that you're not excited about and you're still getting
billed every single month, like that's when it psychologically, or
at least in our culture today, that's when it feels
like it starts veering into subscription terracle. Its something that
you are begrudgingly paying, as opposed to willingly or excitedly.

Speaker 1 (04:11):
Well, I saw that. I think Alaska Airlines just announced
a five dollars a month subscription fief and you get
like free Wi Fi when you travel stuff like that.
So let's say Wi Fi costs ten bucks and you
travel every single month on an Alaskan Airline flight. It's
worth the feet, it's worth the five bucks, right, But
I guess.

Speaker 2 (04:25):
It sounds more like a membership to.

Speaker 1 (04:26):
Me, right, Yes, I think you're right. So this is
just an interesting one. I just see.

Speaker 2 (04:30):
It's kind of like frugler cheek.

Speaker 1 (04:31):
I can't imagine paying thirty bucks a month to chuck
e cheese. Well, but I guess some people can.

Speaker 2 (04:35):
There's other things you'd rather do. You'd rather take your
family hiking or something as opposed to. Yeah, the ball pit.
I don't think I've been since my childhood, and but
I went many times in my childhood, and my kids,
I guess, are just missing out. Have you ever seen
the animatronics without the fur on them.

Speaker 1 (04:48):
No, that sounds scary.

Speaker 2 (04:49):
Scary. It's not something that you would have went your
kids to see. It's sort of like seeing space mountain
with the lights on. Oh yeah, obviously it removes the magic. Yeah,
you're like, oh my gosh, that's.

Speaker 1 (04:59):
How close we are to moving part.

Speaker 2 (05:01):
This conveyor belt looking looking thing that's like flying on
my face. But I'm gonna keep chewing on subscription versus
membership though, because I really do think that could be
like a new because it's like, well, frugal or cheap. Well,
it's kind of the same thing, but actually no, it's
very different. I kind of feel similarly about the subscription
versus membership. Okay, we might come back to that, but
let's introduce the beer that you and I are enjoying today, Buddy.

(05:21):
This is Awaken Bake. This is a coffee oatmeal Imperial
Stout by Terrapin. They're out of Athens, Georgia, Buddy, I'm
looking forward to and they partner with Jittery Joe's, which
was one of the better coffee shops there in the
classic city. I spent a jitter Joe's got a decent
amount of my money when I was in school.

Speaker 1 (05:39):
I still remember for one of my maybe one of
my birthdays, like ten years ago, we all went to Athens.
We went to Terrapin. It was a lovely time. Well,
looking forward to having this beer on the show today.
Our thoughts at the end, But let's get to the
topic at Hanry are answering listener questions. If you have
a money question, well, we'd love to hear it. Hope
we will take it next week on the show. Just
got to hatamoney dot com slash ask for instruction. But

(06:00):
basically you're just recording your voice memo. You're sending it
our way and hopefully we can take it soon in
Matt first question is probably something that's on the minds
of a lot of listeners. It's about student loan payoff.

Speaker 4 (06:11):
Hi, my name is Ange and I'm from Michigan. My
question is regarding student loans with the potential of student
loan forgiveness in the future. Would I be better off
to continue to pay the minimum payment and hope that
it will get forgiven in the future, or should I
be paying it off as it is a higher interest rate?

Speaker 2 (06:36):
All right, and I think this is a question on
the mind of a lot of twenty something year olds,
in particular, folks who are not it hasn't been all
that long since they've gotten out.

Speaker 1 (06:45):
Of college, Jill. A lot of millennials though, with student
loan debt hanging around too.

Speaker 2 (06:48):
That's awesome, that's very true.

Speaker 1 (06:49):
Actually, like when you read this the articles about parent
plus loans and people even in their.

Speaker 2 (06:53):
Sixties stars with student loans.

Speaker 1 (06:55):
It's sickening.

Speaker 2 (06:56):
Yeah, But in particular this is important to discuss because
the Safe Plan it continues to roll out so this summer, actually,
this is when we're going to see it kick into
full gear. Basically in July, most borrowers will have their
payments cut in half thanks to the far more generous
rules of the Save Plan and the timeline to reach
full forgiveness that's already been implemented. This is also much

(07:18):
more generous as well, where they slashed it from twenty
years down to ten years. But then there's this other
amazing perk where your balance won't grow if you are
making on time payments. This was the capitalization of interest
feature that they rolled out, where folks were seeing their
balances grow over time, which was incredibly disheartening.

Speaker 1 (07:38):
Even over many many years they've been making on time
payments and then but the balance continues to grow, which
is disheartening to say the least.

Speaker 2 (07:45):
Yeah, So, this income based for payment plan, it's changing
the game, and it's making student loans just a whole
lot less awful for borrowers everywhere.

Speaker 1 (07:52):
Yeah and so, and she mentioned student loan forgiveness. You
just touched on that, Matt. But there's also the reality
that the Biden administration continues hinting at trying an even
more robust approach to forgiving student loan debt. So they
had kind of the swing and miss in their attempt
to completely wipe the slate of all student loan debt,
and the Supreme Court kind of smack that down. They

(08:15):
failed in the first attempt, but they're looking into other
legal avenues. They kind of keep mentioning this out loud,
of making student loan forgiveness stick.

Speaker 2 (08:23):
And so mostly for political reasons, I think, sure, it's like, oh,
by the way, we will do this thing probably maybe
at some point there at least if you vote for me.

Speaker 1 (08:30):
They're at least efforting efforting, which is a good word,
I think. And so it's vaporware right now. And no
one knows if, when, or how that might come about.
But I think that even that potential carrot combined with
the hard facts of Safe Like, sure, there's a hard
reality right of the payments being cut in half and
the much shorter timeline for forgiveness, which is great. Then
there's also the potential who knows if it will happen

(08:53):
forgiveness thing dangling off in the future.

Speaker 2 (08:56):
I think of that hard blanket forgiveness, yeah, exactly, of
it just.

Speaker 1 (08:59):
Being eliminated all together. I think those combined things, I
think it makes paying off student loan debt less of
a priority for most folks.

Speaker 2 (09:06):
Yeah, that being said, I wouldn't necessarily, I mean, don't
count on that blanket forgiveness being a part like don't
necessarily I don't know, don't fully put all of your
weight on that leg. Instead, look at the fact that
there are these unassailable aspects of the Safe plan that
have already been partially implemented.

Speaker 1 (09:22):
I'm gonna give the blanket forgiveness a four percent shot.
That's just that's just my yes, my nager, that's that's
not a very high chance. But there's a chance, And
so there is there is a chance saying there's a change,
right that should at least come into your calculations.

Speaker 2 (09:35):
But with all of this in mind, we do think
student loans should likely be on the back burner of
all your different financial priorities and student loans it likely
shouldn't be near the top of the list. And I
think that just means paying off your loans as agreed,
like honestly our advice. It might have been different five
years ago, but because of all of these different benefits
that save offers, along with potentially having a big chunk

(10:00):
out in the future, I just don't see any reason
to pay off that debt sooner. And by the way,
this is like we are assuming that you're talking about
federal student loans. If you, if anybody else out there
is listening, and you've got private student loans, safe plan
doesn't apply. We're talking like there is not any ability.

Speaker 1 (10:15):
You have to get those private student loans four or
five years ago when interest rates really love we're super low.

Speaker 2 (10:19):
Yeah, but just realize that the different forbearance periods of
time that folks have had the pauses, what else is
there the possibility of the forgiveness. This all applies to
federal student loans. Yeah, and the reduction in payment amounts.
I mean, yeah, the federal student or excuse me, the
private student loan companies, they ain't got that.

Speaker 1 (10:39):
They're not offering the wigle room that the that the
Feds are.

Speaker 2 (10:41):
Yeah, if you've got private student loans, just knock that out.
Most likely, although again, if it's from four or five
years ago, because it depends on the rates, you probably
didn't refinance into private loans during the pandemic when the
payments were paused, they are probably they probably do have
a three and a quarter or three and a half
whatever four percent interest rate, So it's not like the
worst thing in the world, true, But yeah, you don't

(11:03):
have any of those additional benefits though. But I think
it's really important, like you said, to mention that these
are kind of two different categories of debts. And so yeah,
we're assuming again, federal student loans here. If it was
me and I would feel plenty comfortable taking this slow
payoff approach that Matt just kind of outlined. So you
can do better things with this money, but we don't
want you doing like whatever random thing might pop into

(11:23):
your head with those extra funds.

Speaker 1 (11:25):
Like the key is to funnel those dollars that you
would have used to pay off student loans towards saving
and investing, right, don't take that money inflate your lifestyle
because no.

Speaker 2 (11:35):
Need to go on a cruise. Yeah, save that for
five ten years.

Speaker 1 (11:39):
If that's what you were going to do, then I
would say pay off the student loans right. If it
was either it was consumption versus debt, payoff boom, go
ahead and pay off those that student loan debts as
much as you can. But the good news is that
you have options here. And if you're asking if you
should or shouldn't pay down that debt ahead of schedule,
I think that means you have a little extra money
at the end of the month, and I just want
to make sure that you're continuing to be diligent. So

(12:00):
take that extra money instead of putting it towards student
loans that are not the worst form of debt to
begin with, and then are actually looking a whole lot
better these days thanks to kind of the new regulations.
I wouldn't feel terrible keeping that debt around and starting
to build my nest egg, build up my assets instead
of paying down my liabilities.

Speaker 2 (12:16):
Yeah, it fully depends on what you plan on doing
with that money otherwise. Like it kind of makes me
think of this conversation Joe that Can and I have
been having at home about seltzer, Like we drink a
whole It seems like we go through a ton of
Seltzer all the time. We're always like restocking. I'm like,
where did all the seltzers go?

Speaker 5 (12:28):
Wow?

Speaker 2 (12:29):
We drink it all. And on one side of the argument,
it's like, well, the fully optimized, affordable, financially smart thing
to do is just to drink the filtered water that
comes through comes out of the fridge, right, or.

Speaker 1 (12:41):
You're one of those soda streams like virgal Is.

Speaker 2 (12:43):
If you want to do that. But if the alternative
instead is that you're drinking more coke or more juices
or more beer, things that hey, not only cost more
money but might be not as great for your health,
we'll shoot well in that case, keep the seltzer around,
keep buying the seltzer because it's keeping you from harming
yourself bodily, perhaps more than the seltzer otherwise. Whatever. So

(13:05):
in this case, I think keeping the student loans around
and paying on them as a greed, Like that's the Seltzer,
whereas the sort of optimized tap water chilled it's basically
like free water that comes out of the wall, right right,
Like that is taking that money and maybe investing it
in the market. But if the alternative is to perhaps
spend that money like you, like you said, Joel, if
you were to just consume it, well that's not what

(13:27):
we want you to do. So I don't know, maybe
that's helpful for some of the Seltzer slash student loan
holders out there. Seltzer drinker slash. What do you think
the vin diagram is for folks who have student loans
and also enjoy Celtic, it's.

Speaker 1 (13:38):
Probably almost a direct overlap. Like, I just hope they're
drinking the Cerkling signature variety, not just not the Lacroix,
the liquah or all these stuff.

Speaker 2 (13:46):
Is actually pretty good too. I honestly I like that
the aldise stuff. It actually has less flavor, it's more
it's just it's more sparkling as opposed to the different
fruit flavors. By the way, save so the safe lane,
it doesn't make sense for everyone out there. Higher income
earners in particular might not benefit. And that's because the
more you make well, the higher your monthly payment is

(14:08):
going to be, So that's something that you want to
keep in mind. And honestly, if you found that your
student loan situation is fairly complicated, maybe you've got a
fairly large balance, well, it might make sense to talk
to the folks over at Student Loan Planner. They're kind
of like financial planners, but for student loans specifically. We've
had a few of their different folks, folks who are

(14:31):
on their team here on our show before on the past,
and I think they've helped out a lot of borrowers
save quite a bit of money. We've got a review
up on the website as to whether or not you
are in a situation where it might make sense to
reach out to student loan planners. Yes, we'll links to
that in the show notes.

Speaker 1 (14:45):
The stakes are high, the options can be confusing, and
if you feel like you need to see a professional
because you're kind of at your wits end, you don't
know how to make heads or tails, and you're not
sure whether reducing your payments to the most important option
or reducing your payoff timeline is the best option, then
talking to someone who's like literally an expert. They have
a specific specific designation ye c SLP Certified Student Loan Professional.

(15:09):
That's a good way to proceed if you're kind of like, yeah,
not sure where you're headed. But Matt, we've got more
questions to get to on this episode, including someone who
attempted to father taxes twice in order to see what
the most optimized route for his finances would be. We'll
talk about that and more right after this.

Speaker 2 (15:32):
All right, we're back and we will get to that
listener who has run some different tax scenarios to see
where he might owe lesser, when he might owe more.
But let's hear from a listener who's actually moving out
to Austin, Texas.

Speaker 3 (15:45):
Hello, met Angel. My name is Jordan. I currently attend
college in beautiful Tallahassee, Florida. But I'm a senior, which
means in a few weeks I'll be graduating and starting
my first full time job in Austin, Texas. Now thanks
to y'all's show, I do consider myself to be fairly
financially literate. You know, I have a highlight savings account.

(16:07):
I've been investoring in a brokerage account for the last
several years. I will be graduating GUBT free, as my
school was paid for by scholarships that I earned. But
I'm definitely a bit intimidated by everything that's coming up
in post grad life, especially a lot of the financial
shifts taking place. I'm about to be living alone for

(16:27):
the first time, so I am thinking a lot about
apartment hunting and how I'm going to furnish a new place.
I am about to buy my very first car, and
I'm about to add a lot of things to my
budget that I've never had to contribute to before, like
internet and phone bills, or car insurance or hsas and

(16:48):
a lot of other votecap terms that are definitely swirling
around in my head right now. I'm happy with the
offer that I got from my first full time job,
and I feel secure in starting out, but I would
love to hear any advice tips first steps for students
entering that postgrad life, because I really do want to
start off my adult life on the right financial foot.

(17:09):
Thanks y'all.

Speaker 1 (17:10):
All right, Jordan, congrats on graduating. That's huge. I'm guessing
she did it in four years, Matt. She sounds like
a go getter. She has done in like three says.

Speaker 2 (17:20):
Like she's been in college listening to our show. I
freaking love it.

Speaker 1 (17:23):
I bet she was like taking those ap classes in
high school to get rid of some of those classes
in college. And she's like probably graduating at the ripe
old age of twenty one or something like that.

Speaker 2 (17:30):
And the fact that she doesn't have any debt. I mean,
so she's a go geter because she was applying to
all of those scholarships, which I know, on the front
end seems like a whole lot of work, but uh, hello,
the ability to have any student loans. I mean, we
just spent I don't know, fifteen minutes talking about student runs.

Speaker 1 (17:45):
Right before the break, Jordan just skipped take about that, Yeah, exactly,
having zero student loan debt and being in starting investing
in your teens and early twenties.

Speaker 2 (17:54):
We talk about that. Yeah, that's amazing.

Speaker 1 (17:56):
Means that you've got less financial baggage and you've got
better financial habits than most already. And it just, man,
this is just a great reminder. You talked about the scholarships.
I think is it just a good reminder to anybody
who is in high school or has a student in
high school to apply for scholarships to not the ROI
can be significant, and some of those scholarships are recurring scholarships,

(18:18):
so apply for those scholarships. Make it feel kind of
like a part time job because it might be basically
is from a financial sample, it might be a more
lucrative part time job than actually getting to getting a
fast food joint job or something like that.

Speaker 2 (18:29):
He especially if you find a scholarship that pays big
not a whole lot of folks know about it. Guess what,
You're gonna revisit that scholarship next year. It's a gift
that keeps on given. So Jordan, we'll do our best
to offer you some advice here, but honestly, part of
that is we basically want to encourage you just to
keep up the awesome financial habits that you already have.

(18:50):
Like you are already a verse to debt. We want
you to keep that mindset. Don't allow yourself to take
on any debt, if at all possible, until if and
when you are ready to buy a house. We're talking
about a mortgage here, and since you've been regularly investing,
keep that up as well. So I'll point out you
mentioned your brokerage account. You are likely going to want

(19:10):
to change accounts now that you have a job, is
how I'm guessing that you were only investing via your
brokerage because you didn't have earned income, So now I
guess what you have the ability to contribute to a
roth IRA. But now that you have a job, hopefully
you said you're happy with the offer that you received
from them. Hopefully that also means a four to one
K with a match, because we want you to prioritize

(19:32):
those tax advantage accounts rather than your brokerage account. And yeah,
depending on what your benefits are at work, making sure
that you are able to snag that match via that
four O one K that comes first, and then you
can look at your HSA, your roth IRA, THO'SE, other
tax advantage accounts.

Speaker 1 (19:48):
I have a feeling that a person like Jordan, who
is crushing it on so many levels, is going to
be getting the match, maxing out the roth, maxed out
the HSA, and then maybe even going back for more
on the four oh one K after that too. Like
she just seems like that kind of person who's going
to prioritize investing substantial amounts of money before she inflicts
her lifestyle dramatically, okay, and I feel like the first job,

(20:10):
it can feel like this flood of income.

Speaker 2 (20:12):
Right, it's like a real adult.

Speaker 1 (20:14):
Yeah, got a real job and you get the first
couple of paychecks and you're like, oh man, you kind
of it's not that it's mean, it's wonderful, but you
can kind of get addicted to living large really quickly
because you're starting to see those regular paychecks come in and
you're like, you know, there's a big step up from
that college life, right, and it's easy, I think, to
raise your lifestyle really quickly. So you know, for instance,

(20:35):
Jordan mentioned getting a car, but you know, lots of
grads they go and buy a new car because hey,
I graduated, I put in the hard work. Why not
I deserve it and treat myself right. But then what
you're treating yourself to is payments for many, many years
to come. And so we would say, please instead consider
getting a used car, ideally something that you could even

(20:56):
pay cash for. I'd say the older the better because
like a nice low mileage eight to ten year old
car can help you save on multiple fronts. It's cheaper
to ensure you're gonna take less of a depreciation hit.
Maybe consider a used a EV thanks to the federal
tax credit. If you have the ability to charge at home,
let's say you're not, I know, if you live in
an apartment complex, Matt. Sometimes the evs can be a
little bit annoying, depending on what sort of charging infrastructure

(21:18):
they have. But this is one thing like setting yourself
up for success so that you have more financial margin,
more that you can commit to investing for your future
and saving for kind of more medium term goals. Well,
the lower you keep your transportation budget, the less you
spend kind of on something that a lot of people
tend to spend outsized amounts of money on, the more
wiel room you have to prioritize other things.

Speaker 2 (21:40):
Yeah, we would love for you to think of your
transportation truly as that call it your transportation. Don't call
it your ride or don't name your car like, think
of it as like a utility. Like nobody's naming their
water heater. It just provides you with hot water. Like
That's how we want you to think about your vehicle
as well. And maybe you got hired by a fintech
startup or something and you have the ability to charge

(22:01):
your car while you're at work for free. Well here's
the that's like Krem to the Krim.

Speaker 1 (22:05):
Think about where you live in terms of where you
work and a proximity of that. How huge is that?

Speaker 5 (22:10):
Oh?

Speaker 2 (22:10):
Yeah, I can say for me, that's been like one
of the biggest game changers in just life enjoyment, life
satisfaction has been living and working close to each other.
And even like when I was thirty minute car ride away,
well guess what, it was a thirty minute bike ride too,
And so those bike rides there's options. Yeah, now my
commute is a heck a lot less than that, But

(22:33):
I do think like prioritizing that and trying to make
that a regular feature of your life, you've got the
ability to kind of start that pattern. Now totally. Yeah,
I totally agree, and especially given the fact So's she
went to school she said in Tallahassee. I'm guessing she
went to Florida State. Yeah, and guess like, my brain's
going like a bunch of different places, Like I'm thinking,
like she asked about housing, right, and.

Speaker 1 (22:53):
She said something about living alone. So the first thing
I want to put on.

Speaker 2 (22:56):
Your radar is do you have to live alone? Like
could you consider getting a roommate, and it sounds like
maybe this is a new city and you've not you
you've not been there before. But I mean you can
look on Craigslist. Who knows you can find somebody like
another awesome individual who you'd be more than willing to
split your apartment with or rent with. But it could

(23:19):
a have an incredible financial impact. Because you went throughout
all of college, most likely with the roommate, why not
continue that for a little bit longer. But then b again,
going back to the whole the fact that you were
an undergrad there on campus, surrounded by a lot of
folks that you were friends with and shared common interests.
You were like minded. Well, when you move to a
new city, I think it could be difficult from like

(23:41):
a social standpoint, right, Like it could be a lonely
transition when you are moving to Austin, And guess what
if you find like a cool roommate. I think that
could help tremendously when it comes to meeting new folks,
to always kind of have a just like a default friend,
someone just to chat with, even if you're not gonna
end up being best buddies. The ability to come home
and just to talk a little but an unwind. I
think that that's I don't know, I think that's really underrated.

(24:03):
And so there's like a financial aspect, but then just
sort of the social connection aspect, and I think that
could really have an impact on your happiness and how
you view your new city. Basically in addition to, like
you said, Joel, keeping in mind like okay, well how
far from where am I going to live? Because if
you're spending all your time come meeting all right, well
you don't have a ton of time to like meet
new folks or to hang out after work and go
grab drinks. That kind of thing. It all has an impact.

Speaker 5 (24:25):
Is it?

Speaker 1 (24:26):
Meetup dot com? Is that where you find kind of
different meetup groups.

Speaker 2 (24:29):
Based on shared interests. Yeah, a lot of those hangs
to extensive. It could be a workout group at a local.

Speaker 1 (24:35):
Park or something like that.

Speaker 2 (24:36):
Even while you're still at school, just asking around, like
you're probably thinking, well, I'm in Florida, like nobody is
from text. We'll just start asking around and man, you
might have a friend that knows somebody and boom, there's
your first hang and then they introduce somebody else. It's like, hey,
is there somebody you could recommend me meeting up with.
There are just a lot of different potential benefits I
guess that I see coming from living with roommates. I

(24:57):
think about when I first moved to Atlanta in this
super sketchy loft. It was, it was rough, but it
meant that I had some default hangs, like right out
of the gate, and one of the guys that I
shared that loft with invited me to church, and so
I went there for a little bit. And guess what
that happens to be the church where our family is
going to now. And so what I'm pointing to is

(25:19):
the fact that and I literally hadn't been there in
around fifteen years, like not even kidding. So what I'm
piloting here is the fact that there could be like
a long lasting impact of some of these random roommates
that you might find yourself crossing paths with. Yeah, that's all.
I think.

Speaker 1 (25:33):
It's a good point. And some other things, Matt, just
like when we're talking about the apartment front furniture that
can be expensive, she.

Speaker 2 (25:40):
Was asking about how, yeah, furnishing her new place.

Speaker 1 (25:42):
Yeah, well, especially if you're living alone and you kind
of moved from a door atmosphere where you might have
like two items of furniture. Well, you've got some rooms
to fill, right, and so I say Facebook Marketplace and
your local biy nothing groups. Are your friends even opting
for akia to furnish that place? That can add up?
Like it seems like, oh, that's the cheap place to go. Well,
there are cheaper places to go, which buying other people's

(26:03):
use stuff, right, and so you're.

Speaker 2 (26:05):
Just like grabbing the kerb alerts.

Speaker 1 (26:06):
Yeah, like that.

Speaker 2 (26:07):
Looks like a decent coffee table on the side of
the road. Just be careful for that in the back
of the car bed bugs. That can be more trouble
than it's worth. And you can always upgrade pieces over time.

Speaker 1 (26:16):
Right, you buy the two hundred dollars or even one
hundred dollars couch or something like that that's used from somebody, well, yeah,
make it a golden to save up in eight months
to buy a new one or something like that. Start
saving for it, don't go into debt for it, and
maybe get the mattress new. I think that's something I'm
not willing to be cheap on. Costco's got great mattresses
for pretty inexpensive.

Speaker 2 (26:35):
Yeah, Yeah. So I've gotten free mattresses before, and I
know you it's worked out for me, So I totally
get where're coming from, though, Like you don't want to
do the equivalent of dumpster diving for furniture that you're
gonna get sleeping yes, but yeah if you if you
know somebody and it's like, oh no, this is a
great queen mattress. So that mattress that I'm talking about
that we got for free, I don't know, like a

(26:56):
decade ago, it's still in our house. One of our
daughters sleeps on it, and it is by far the
coziest bed in the entire home.

Speaker 1 (27:03):
Like, no joke, Like we all talk about it, and
one gave you a nice mattress. It was solid. Yeah, So,
I mean, I just I think at every turn, there's
a way in which you can spend in a way
that reflects your new level of income, or there's a
way that you can kind of continue to live like
a de facto college student, not overdoing it even though
you have now some of the financial means to spend more.

(27:24):
Sure so, actually, so the white coat investor, that's what
he talks about. He talks about living like an intern
for a couple of years post graduation. And it's not
that you can't inflate your lifestyle at all or maybe eventually,
like that's something that's totally fine to do. Like nobody
wants to live the college chic student life and perpetuity.

(27:45):
Plus almost all the doctors he's speaking to or writing to,
they all have got student loans. Again, Jordan, you don't.
They've got to keep it in check because they've got,
you know, potentially a mortgage sized student loan payment going
out every every single month. Jordan doesn't have that.

Speaker 2 (28:00):
And so bottom line, I guess what I'm saying here
is if you can keep your wants and your desires
and check, the more financial flexibility that you're going to have,
you're gonna be able to build wealth more quickly and
that's going to give future you far more options. And
so that applies not only when it comes to your car,
but like again back to housing. I mean, even like
as Joel, as you're talking about furnishing the place, well,

(28:21):
guess what, you don't have to buy nearly as much
stuff if you've got a smaller place, yeah, you know,
I mean, or if you have a roommate and your
roommate has all this stuff, they're looking for somebody to
take over the big bedroom that has its own bathroom.
They're happy to stay in the smaller room, and you
know it has a compounding effect, is essentially what we're seeing.

Speaker 1 (28:39):
If you really want to become a homeowner, I would
think about house hacking. I would give long and hard
thoughts to that, because that's one of those ways where
you potentially get what you want from a housing perspective,
but also have some income coming from that property as well.
There's a lot of things to stick through, and I
think one of the things you said, Matt, too, is
giving future you more options. When we say that, we
don't just mean the retired you at age sixty five

(29:00):
or seventy. We mean kind of growing that margin over
time in saving some investments so that you can take
a sabbatical at some point if you want, So that
you can take a lower paying, less stressful job at
some point, so you can start your own business if
that's what you want. It's not just about forty years
in the future, right, It's about all the incremental places. Well, yeah, this, Yeah,
we talked about this like a few weeks ago on
a Friday flight. It's not just forty years from now,

(29:22):
it's not even twenty years from now, it's like literally
next year. Yeah, your ability.

Speaker 2 (29:25):
To not sign up for a student not a student loan,
you would never do that, a car loan where you've
got massive payments going out. Guess what that frees you
up to consider this other job offer that maybe seems
a little more risky, but is way more fulfilling and
something that you're way more excited about because you don't
have a massive mortgage payment because you maybe move too
soon on a home, you don't have an expensive car

(29:47):
that you have to keep up with and make payments on.
It's even like as soon as next year, the all
the different options that you're gonna have, maybe you'll have
even bigger problems. Like our next listener who's trying to
figure out the best way to opt demises tax situation,
essentially to pay the least in taxes possible.

Speaker 5 (30:05):
Hey guys, this is Eric from Eugene, Oregon, and I
have a question about to wroth or not to wroth.
So my wife and I are maxing out our traditional
four oh one ks. We're also fully contributing to WROTH.
I raise and an.

Speaker 6 (30:23):
HSA, And when I was doing my twenty twenty three taxes,
I decided to do a test and see what the
tax implications would be if we had done a wroth
for one K instead of traditional, and so essentially it
increased our taxable income by forty five thousand between the

(30:43):
two of us. And on that, the difference between the
tax refund that we get the way we're currently doing
it versus the taxes that we would owe if we
were doing a wroth four oh one K ended up
being around nineteen thousand and three hundred dollars. And so
my question is, at that kind of a cost, should

(31:06):
I still be considering doing a wroth for one K?
My gut reaction would be to just pocket that money
and continue doing traditional for one K. But I'd like
to hear your guys' thoughts on it.

Speaker 1 (31:19):
Thank you, Matt. This is a test of the emergency
wroth system. Does it work? I don't know? Sorry, just
that's what made me think because he said he's a test.
You remember the emergency alerts is a test? Yeah, this
is only a test. Did you what?

Speaker 3 (31:31):
It was?

Speaker 1 (31:31):
In the most monotone voice.

Speaker 2 (31:32):
Possible, So we never had was it. It wasn't that
long ago that they sent out the cell phone emergency
alerts like nationwide, and neither one of us I think
had our phones on for that, because I think we
intentionally turned them off because we knew we were an interview. Yeah,
so I don't know what that sounds like me neither. Yeah,
I'm sure it was pleasant.

Speaker 1 (31:49):
Big props to Eric, by the way. I mean similarly,
I think just how money listeners man like, so many
of them are dollar crushing, crushing, and Eric is also
doing great, and so the question isn't about trying to
do more, it's about optimization. And based on the quick
calculations in my head, I'd say that Eric has to
be investing like sixty thousand dollars a year.

Speaker 2 (32:09):
He's maxing out all the accounts. Yeah, like sounds like
him and his wife we're maxing up four waks and
HSA is right.

Speaker 1 (32:17):
I mean it's probably more than sixty thousand, which is impressive.
And so, yeah, the saying more money more problems comes
to mind here because then when you're talking about, you know,
significant levels of income and kind of trying to save
on taxes add some stress. I mean, it's the good.

Speaker 2 (32:31):
Kind of stress, because there are much worse kinds of stress,
like not having enough money. Right, So you're in a
good spot, But tax minimization is well worth thinking through. Really,
why pay taxes that you don't have to pay or
pay more than is necessary? And I think Matt specifically,
what we're talking about here too, is not just the
way to save the most amount of tax in a
single given year, but it's about the way to minimize

(32:52):
your tax burden from like over a timeframe of many decades. Totally,
I think so. Bottom line, I think Eric's gut reaction
is correct, and not just because it's tough to stomach
paying this extra twenty thousand dollars in tax each and
every year, but it's because of the rate that you're
being taxed on those dollars. So every dollar that you
move from a traditional to a ROTH account, that'll likely

(33:14):
get taxed at the twenty four percent tax rate, which
is as it's not the lowest bracket. I'll say that, right.
But the key to this question isn't just what your
tax bracket is today, what the rates are today, but
it's what bracket that you're likely to be in when
you retire and will you have years of significantly reduced
income in the years leading up to retirement, that might
allow you to make some safe and backdoor wroth conversions

(33:37):
if that might be more advantageous to your overall situation
with the amount that Eric is currently saving and investing,
and makes me think early retirement could be on the horizon.
So you're right, like, if you have some of those
lower income years leading up to retirement, you are going
to find yourself in a much lower tax bracket than
you are in currently, and so getting the tax break
now makes more sense. Right.

Speaker 1 (33:56):
That to me, that is the crucial part, because again,
the goal is to pay the lowest overall tax rate.
It's not about just a single given year. It's about
kind of lifetime strategic planning. And that might mean paying
more tax now in twenty twenty three or twenty twenty
four to avoid taxation later. It can also mean the
exact opposite, right, So much depends on the thing what

(34:17):
your future looks like, and these things are hard to
predict with certainty. There's no exact clarity. We're all kind
of doing our best because part of that is the
tax code. What's that going to look like? We don't know,
we already know that the tax cuts and job deac
is set to expire. Well that actually happened. It's anybody's guess, right,
and so we're all doing our best with the information

(34:38):
that we have on hand. But thinking through your work
and your income goals I think can help influence the
route that you're deciding to take here totally.

Speaker 2 (34:45):
And Eric, something else that's worth considering is that were
you to change your four win K contributions from a
traditional to roth one of the impacts of that is
that you might lose the ability to contribute to a
roth ira as well. Because those four win K contributions,
what do they do Well, they lower your AGI pretty significantly,
and so if you change them to roth four to

(35:06):
one k contributions, your AGA is going to skyrocket, and
considering how much you're investing, you're probably going to be
over the roth IRA contribution threshold, meaning that you can
actually invest less dollars overall within tax advantaged accounts. That
would be like a tierface emoji right here. Yeah, Yeah,
like basically prioritizing that traditional four one k that is
keeping that roth IRA door open. It is still an

(35:28):
option for you to continue to do that the HSA
is not impacted because it does not have income stipulations essentially,
but even still, like the Roth IRA, it's a bigger deal.
Like you're talking about between you and your partner fourteen
thousand dollars as opposed to like roughly eight within the
HSA for your entire family to contribute to an HSA. Yeah,
I like the idea of having all the options open,

(35:49):
and you're right, you close the door if you move
the traditional four one K contributions to Roth style contributions.
And plus, by the way, you're balancing your tax buckets
by having money in pre tax and post tax accounts.
Having money going into all the above is just provides
a lot of flexibility for your future. Right if you
were making less money, Matt and I would say, well,

(36:11):
the goal would be to contribute to only ROTH accounts
because you're locking in a super low tax rate. So
like Jordan, for instance, fresh out of school, I'm guessing
she's going to make more in the future. So right now, man, Jordan,
all Roth all.

Speaker 1 (36:24):
The way ROTH makes more sense exactly earlier on in
your career you are and the less you earn. Unless
Jordan is just like so ridiculously smart. She's making like
four hundred g's coming right out of school, right, she
probably is. She probably is, So okay, take that hat, right.
So much depends on what your income is. But when
the tax man hands you lemon, go ahead and make
some lemonade, because you know, roth ira and four to

(36:44):
one K contributions are even more beneficial to those folks
in their early years. But because of where Eric stands
on the spectrum, I think a little bit of both
is in order. The traditional four one K combined with
the roth ira is just a match made in heaven
for him. And then by having money in the HSA,
the traditional four u K and the roth you're filling
up multiple buckets that have various withdrawal abilities and tax liabilities.

(37:06):
So you're kind of covering all your bases here as
far as kind of choosing your own adventure when it
comes to your tax rate in retirement. And we've talked
about this before too, Matt, just how the HSA has
different withdraw rules and they're more flexible about the timing
that you take those out. So if Eric is as
I suspect like, if he's aiming for early retirement, well
the hsa, is that other awesome vehicle to help you

(37:28):
be able to take those funds out before you reach
full retirement.

Speaker 2 (37:31):
H heck yeah. But Joel, we've got more topics to
get too. We're gonna hear from a listener who's trying
to figure out what to do with a car now
that she is nearing the end of release. We'll get
to that and more right after this.

Speaker 1 (37:50):
Back we'll back. We have more questions to get to,
including this one, the Facebook question of the week. If
you're not a member of the how to Money Facebook group,
please do go check it out. If you have money question,
your peers are helping you out in there, which is
a beautiful thing, all right, Matt. This one comes from Sandy.
She says, question about using your roth ira as an
emergency fund. I've heard numerous times that your contributions, if

(38:13):
you were to withdraw them pre retirement for an emergency,
for example, are not taxed. However, someone else told me
that it's only if the money is still in the
settlement fund. Once you use the money to purchase funds
to invest in, then any amount you remove early as
a result of selling some of that stock is subject
to tax. Is that correct. Right now, I keep my
emergency savings in a high yield savings account. But should

(38:34):
those savings interest rates drop like they did a couple
of years ago, I might consider using my roth ira
as a place to park my emergency fund. I just
want to make sure I know the rules if I
need to withdraw from that wroth account. All right, Sandy,
let's go ahead and kick this thing off. And first off,
what you were told just isn't true. So even if
you invest the dollars that you invest within a roth

(38:54):
ira or that you transfer to a roth iray, because
technically those dollars aren't invested yet until you actually buy
some thing. Even once you actually buy something within that
roth ira, you can still take out the contribution amount,
the actual dollar amount, at any point in the future
without any sort of tax or penalties attached. And so,
for instance, let's say you put five thousand dollars in

(39:14):
your rath ira.

Speaker 2 (39:16):
A decade ago. Let's say you invested it fully in
VU my favorite sm P five hundred ETF, and now
it's worth twelve thousand dollars now because of a decade's
worth of market returns. Well, you can still sell five
thousand dollars worth and pull it out without any problems.
Uh So it's one of the it's one of the
cool aspects of rath IRA's, but it's actually it's potentially dangerous.

(39:38):
It's almost like a it's a double edged swordel because
it's I like that there's some optionality. We again, we
love for folks to have options, but there's a downside
to the fact that we have so much flexibility and choice.

Speaker 1 (39:50):
Sometimes it can be a little too tempting, right depending
you might turn there quickly in a minor emergency when
you could have found other places to get the money,
and now you're robbing yourself of the work that those
dollars can do for your future, exactly inside of basically
one of the best accounts of all time. So I
think for a lot of people it's enticing to tap

(40:12):
retirement funds. We've talked about that happening in four to
one K's as well, Matt. Just people think that their
retirement accounts can be treated as a piggyback. Oh I'm
just paying myself back, no big deal. But because of
those small contribution limits for the roth Ira, you can't
go back and redo. You can't contribute for prior years.
You take it out, it's gone and it's hard to

(40:32):
get more money in.

Speaker 2 (40:33):
The window has officially closed. That's right.

Speaker 1 (40:35):
So with other retirement accounts too, people trigger tax issues
with those traditional retirement accounts, which create a headache on
top of that. So those are even worse to take
money out of. I think of it like this.

Speaker 2 (40:47):
I think money that you pull out of a retirement
account is like putting those dollar bills on unemployment. You're making,
you know, one of the biggest investing mistakes, which is
interrupting compounding necessary unnecessarily you're saying, listen, I know you're
doing hard work in there, but why don't you chill
on the couch for a little bit, watch them like
you know, Afternoon TV, Judge, Little Judge, Judy, And maybe

(41:08):
some price is right that we get We'll get you
back in the game at some point, that's right. So
it's not a good idea to completely rely on your
wrath as an emergency fund, right, And that's one of
the concerns here is that Sandy mentioned parking emergency fund there.
That being said, I do think it's totally fine to
think of it as like a backup emergency fund. So
don't think of it as black and white, but think

(41:29):
of it almost like a there's a spectrum here. And
so my take is that investing more within a wroth
and it sounds like that's not something that you've done fully,
but that can actually help you to feel more comfortable
having less within a high old savings account. But we
still want you to have a little bit there in cash.
And so for instance, if you currently have a six
month emergency fund, well you might be able to cut

(41:51):
that down to just three to four months worth of savings.
If you've been investing regularly within your wrath for years,
hopefully you won't need to tap those funds there within
that wrath. But it's almost there, as like it's a
bat again, it's a backup. We want you to rely
on the liquid cash savings that you have there within
your savings account, but also for you to be able
to rest assured to sleep well at night knowing that, oh, well,

(42:14):
I also have some of this additional money that I
hope to never touch because I'm stealing from future me
by doing that, But it's there when push comes to schef.

Speaker 1 (42:22):
It's kind of like having if you're a homeowner a
helock that you can tap, but being like that's a
that's a thing of let's like a last resort. I
don't want to take money out of a helock because
rates are eight percent or something like that. Like it's
not terribly enticing, but at least it gives you the
option then, so that you get.

Speaker 2 (42:38):
A little bit of additional piece of money.

Speaker 1 (42:39):
That's right. So I mean I kind of like the
idea of all the above, and I think you're right, Matt.
You can reduce your savings exposure a little bit, but
you don't want to take it down to zero or
to even just like one month worth of expenses. Yeah,
because the goal is to never touch the roth funds,
even though you have the ability to exactly It's so
some of it becomes down to how comfortable you are
with risk because.

Speaker 2 (43:00):
Joel, I think a lot of folks who knew me
when my younger years would say, you are a very
risky individual. There have been times when I put my
life in perilous situations.

Speaker 1 (43:10):
My physical health.

Speaker 2 (43:11):
As I've gotten older, I've changed and not only am
I risky with too much with myself, but definitely not
with my money. And so personally, I am not willing
all of my full six plus months worth of emergency
funds are in a highal's aiming's account. That's not money
that I want to at all put at risk of
a fluctuations in the market and to have to sell
when the market's down, but b to miss out on

(43:33):
the future returns of those dollars were the market to
continue to climb. And so some of again you have
to kind of consider yourself and what feels risky to
you or not. I think it is self employed individuals too,
And because I feel like that's us, I feel like
I have to have more money, more cash on hand
than I previously had to have in a W two job.
Just the swings are different, the pay is far more irregular. Yeah,

(43:54):
So it just I think everybody's situation is different. That's
why three to six months is a big difference in
kind of that suggestion of what you should have on hand,
But so much depends on your personal situation. Are you married,
dual income, no kids with options to fall back on?
Cool you probably needed the very short end of this
seem more like a three month emergency kind of person.
Are you a single income, self employed four kids individual

(44:16):
like myself. All right, I'm more of the nine to
honestly nine to twelve months living to be fatter for sure. Yeah,
all right, let's get to one last topic. This is
an email from listener and and she wrote, I am
at the end of my lease and I'm going to
purchase the car. My question is where is the best
place to go for a small personal loan around fourteen
thousand dollars. My credit score is seven hundred and sixty

(44:37):
on credit Karma. I have a ton of offers and
the interest rates are about nine and a half percent.
Is that good? What you think, Joel? Nine half percent good?

Speaker 1 (44:46):
First, I like the credit score.

Speaker 2 (44:47):
That's good.

Speaker 1 (44:47):
Seven sixty nice, that's impressive and solid.

Speaker 2 (44:50):
That's where you want to be. I said, get the
best products. Seven sixty plus. You're gonna get the best rates.

Speaker 1 (44:54):
Like nobody's gonna say, oh, if you're only eight hundred,
nobody cares about that. Like seven sixty plus, you're going
to get access to the best rate. So it is
nine and a half percent good. We'll talk about that
in just a second, But first let's talk about buying
out a lease. Not sure not to stock smack here,
but leasing is not something we're fans of, So I
would just say for everyone else listening, avoiding the lease
in the first place is something that we just want

(45:16):
to point out, like not leasing cars. Leasing cars is
not typically almost never done for as like a smart
financial move. It's done as a lifestyle move. Like I
like to get a new car every two years, and
you know, you might take less of a hit leasing
than buying a new car and selling it, but you
got to run the numbers. And even still we like
hold cars. But what's done is done right, and hopefully
you can do well here by buying this car and

(45:39):
holding on to it for a long time. Because of
the funky car market, we've had a lot of folks
who leased a car years ago are finding that their
car is worth more than the buyout price, which is
kind of awesome, sometimes to the tune of thousands of dollars.
So listener and I would say, even if you don't
want to keep the car, buying it so you can
sell it and pocket the difference might be advisable.

Speaker 2 (45:58):
Matt.

Speaker 1 (45:59):
This is how roogal Moveau's what people were doing. They
weren't turning the car back over to the dealership because
they were like, wait a second, there's like a big
gap here. I'm going to make more money by buying
it myself and then reselling it myself.

Speaker 2 (46:10):
Now I like that because there's like a little bit
of smart money move. There's an arbitrage going on here, right,
So you've got the ability to potentially score a massive
deal here and maybe even end up with extra money
in your pocket. But I think another situation where this
might make more sense too, is if you are way
under or way over on the miles driven, that's going
to have a pretty big impact. And plus, like when

(46:32):
it comes to the actual vehicle, you do know the
maintenance history, you know what the car is likely to
need in the coming years, And so I think for
a lot of folks there's some assurance there knowing what
it is that they're getting into. And we're not sure
of the specific making model that she's mentioning here, but
fourteen thousand dollars that's not an unreasonable amount for a
gently used car these days. That is true.

Speaker 1 (46:53):
No, the car market had kind of went insane there,
popped off for a little while.

Speaker 2 (46:57):
Things have kind of things they're coming back down to normal.

Speaker 1 (46:59):
See, yeah, all right, but when it comes to borrowing money,
That's what we need to talk about, because Ann's got
to find a way to finance the rest of this car.

Speaker 2 (47:07):
I mean, or she doesn't, or she get just turn
it back in, not buy the thing, and just maybe
maybe she just buys a Beater met for like possible
three thousand.

Speaker 1 (47:16):
She knows and likes this car, and if she's gonna
own it a long time, I think she can find
a way to finance it and then just prioritize paying
it off quickly. Right, So, yeah, I'd suggest shopping around
with the little local credit union or two lots of times.
You can just go on their websites and find out
what their rates are, and then you can say, oh, cool,
that's good. This is better than that one. And yeah,
do you have to become a member of that credit union,
but typically that means like twenty bucks in the same

(47:38):
mus account and you're a member. I'd also go to
a site called my Auto Loan dot com. They seem
to be the best online car refinance aggregator, and they
don't charge some of the pesky fees at the other
site's charge and so and you mentioned you're getting quotes
close to ten percent right now. But you've got a
top notch credit score, so we think you might be
able to shave that rate down by a couple of points.
And every point you on the loan means a smaller

(48:03):
monthly payment, means that you're paying less in interest, and
just means that the car is more of a deal.

Speaker 2 (48:08):
That's right. Yeah, So I don't know if you can
tell from my last comment that I am not a
fan of car loans, but no need to cry over
spilt milk care. Like, we're looking forward and I would
love to see and hold a yard sale, make yourself
a few thousand bucks, and then you know, reduce That's
what I'm talking about. Yeah, So, if you are going
to get a loan, aside from finding all the different
ways where you can cut that amount down, it's not

(48:30):
just about getting the best rate and reducing your monthly payment.
We would also love to see you lean towards a
shorter loan term. I think that's really important because if
you can handle the payment, I would love to see
you get out from under that car loan as soon
as possible. Like I'm talking about a twenty four month
loan rather than a thirty six a forty eight or
even longer worse option.

Speaker 1 (48:52):
Define I don't want to go longer, my goodness.

Speaker 2 (48:53):
So that's going to mean that you're gonna pay less
overall and interest, but you'll also own that car free
and clear for longer, which is then going to allow
you to start saving up for that next vehicle, for
the next vehicle. And I know that sounds a little
premature because you're like, wait a minute, guys, I'm just
talking about this car. But we want to get you
ahead of that cycle of that saving and buying. Like
right now you're in this you're behind it right like

(49:15):
you've you got essentially you've bought it, and now you're
paying for it kind of cycle. We want you to
pay for it and then buy it, like we want
you to save for it and then buy it. We
want to get you on the front end of that
as opposed to like, right now, it feels like you're
kind of getting drug behind the vehicle, like and you're like,
oh god, I gotta find a way to keep this thing.
I got to stay current on my payments. As opposed
to you being in charge, you socking the money aside

(49:36):
in your own high yield savings where you are earning interest,
not paying interest, and then boom, next car. We want
to see you paying cash.

Speaker 1 (49:42):
Yeah, so paying it off more quickly. I think you're right, Matt.
That's like the goal here. And then yeah, continue making
those payments, but make them to yourself into the high
old savings account. I love that, so that you in
Hopefully you don't even need to buy a car in
three years, because this is still a brand new baby.
It sounds like five, seven, ten years from now. But
think about how much money you're gonna have saved if
you keep that payment but paid to yourself instead. Yeah,
you're gonna have the cash on hand to buy it

(50:03):
out right.

Speaker 2 (50:04):
It'll it'll be a car that flies because it'll be
so far in the future.

Speaker 1 (50:07):
We have jetpackson, I hope. So all right, man, let's.

Speaker 2 (50:09):
Get back to the beer you and I enjoyed. Waken Bake.
This is a beer by Terrapin Beer Company. What'd you think, Buddy?

Speaker 1 (50:15):
I like this one. I It's this is a classic.

Speaker 2 (50:18):
This this beer has been around for it feels like
as long as I've been alive, although that's not true.
It's kind of like one of the original It's a
it's an original og.

Speaker 1 (50:26):
Craft beer, especially if you live in the South. It's
particularly in the state of Georgia. This beers has been
kind of a classic staple of the craft beer scene.

Speaker 2 (50:33):
You know what's funny is I think it was I
still remember a friend coming over for dinner this like,
oh my gosh, forever ago and he's like, hey, guys,
I think this is back when waken bake. Maybe it
was seasonal or I don't know, but he came over
with it and he had just snagged some because it
was hard to get your hands on some of these
more interesting, tasty, unique beers back in the day, right,

(50:53):
And I just remember being so pumped. I was like, Gary,
how did you know we certainly enjoyed some waken bit Yeah.

Speaker 1 (51:00):
And this one because it's got coffee and it it's
got this like the bitter coffee notes coming through put
in like the most pleasant way. So I like the
coffee oatmeal kind of the way they play off each other.
And it's I mean, it's like the beer form of
a Christmas cookie that you want to drink in some
ways too.

Speaker 2 (51:16):
I don't know.

Speaker 1 (51:16):
I like this beer.

Speaker 2 (51:17):
I think it brings back such good memories. Yeah, I
think it's perfectly balanced. It's got those bitter roasty notes
that you get from that jittery Joe's coffee.

Speaker 1 (51:24):
But it's still it's a bigger stout.

Speaker 2 (51:26):
It's an Imperial and so what that means along with
the booze is a little bit of sweetness and it, man,
it just melds those flavors meld together so well. And yeah,
it's certainly a classic. It's also a reason why we've
actually had this beer before in the show. Really, I
looked at it probably a long time ago. It was, Yeah,
it was several years ago. But I mean, I think
there's only like one or two other beers that we've
ever had on the show multiple times. And I'll say,

(51:48):
if you are a beer nerd and you know the
beers that we've had on the show multiple times, if
you email us at howomoneypot at gmail dot com and
you let us know, I'll send you one of the
original porn poor coozies.

Speaker 1 (52:01):
We'll send you a few of them.

Speaker 2 (52:02):
Yes, I actually brought the whole box of them to
the to the office, uh, because I didn't want I'm
taking those names in my in the attic. So we
want to be able to put some of those classic
cooozies into use, baby.

Speaker 1 (52:13):
And if you wanted the easy way out, probably dig
through just the Had of Money Instagram because we posted
all our beers about the years and you can find
it consistently.

Speaker 2 (52:19):
Though Oh okay, I've always been kind of sometimes I'm hit.

Speaker 1 (52:23):
This might take some investigation then, so all right, that's
gonna do it for this episode. We'll have links to
some of the stuff that we mentioned up on the
show notes on our website at howtomoney dot com.

Speaker 2 (52:33):
That's right, buddy, So until next time, best Friends out,
Best Friends Out. You see joy song? Something corporate? How's this?

Speaker 1 (52:54):
Sen that album not too long ago?

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Ask HTM - Roth Emergency Funds, Buying Out A Lease, & Financial Advice For Graduates #814

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Ask HTM - Roth Emergency Funds, Buying Out A Lease, & Financial Advice For Graduates #814