March 28, 2025 • 31 mins
Time for a Friday Flight- our little sampling of the week’s financial news and what it means for your personal finances. There are a lot of headlines out there, but we boil them down to specific takeaways that will allow you to kick off the weekend informed and help you to get ahead with your money. In this episode we explain some relevant and helpful stories like: car wash memberships, education evisceration, test result declines, student loan income recertification pause, Frontier’s troll move, BNPL burgers, leftovers in the lurch, the World Happiness Report is a sham, shared meals are my jam, torched Teslas, imported car tariffs, credit card interest rate caps, and Joann’s gift card debacle.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to out of Money. I'm Joel.
Speaker 2 (00:02):
I am not.
Speaker 1 (00:03):
Today we're talking education, visceration, bing pl burgers and torched Tesla's.
(00:28):
That's right, buddy, this is our Friday flight.
Speaker 2 (00:30):
We're going to talk about the headlines. Then we came
across this week happy.
Speaker 1 (00:34):
I'm really proud of my literation this week.
Speaker 2 (00:35):
I thought I did an extra specially education evisceration in particular.
That's a good one. But uh, I wanted to say
happy spring and a happy pollen season because where we
are it is insane right now. We both went for
friends this morning. Does it impact you, like when you're
running in the pollen? Does it just get funneled into
your eyes and you come home and.
Speaker 1 (00:53):
You just you struggle.
Speaker 2 (00:54):
I don't. I dealing a lot more with pollen, which
hey a quick, frugal or cheap. I splur and paid
for a month membership at a car washh So you know.
Speaker 1 (01:05):
The cars get super yellow? What does that cost? Fifteen
twenty bucks?
Speaker 2 (01:08):
Twenty two dollars? Okay for the one that is literally
I basically drive through this parking lot anyway sometimes to
skip this light, literally just zoom through. Yeah, you're five
times a week? Why not, but thoughts, what do you
think frugal cheap? So normally that location they charge eleven
or twelve bucks per wash, so I figure you go
(01:28):
through that thing twice and it pays for itself. Man,
especially this time of year.
Speaker 1 (01:31):
I dig it. I think this time of year, but
cancel the membership because I think most months you don't
need it, but in pollen season you need it more.
Speaker 2 (01:38):
I I'm more than happy because it builds up and
it gets in the crevices, and then that pollen it
turns into like dirt and then it's caked on like
around with the door seals. You know what I'm talking about.
Speaker 1 (01:48):
Oh yeah, that's where it gets supernest. For my family,
it's like an adventure too. Everybody fun, everybody loves going,
and it's the only time my kids are excited about cleaning.
If we go to the car wash, brainwashed on it
and then they're like, yeah, let's let's like spray it
down and clean it out and vacuum it and stuff.
So they enjoy that. It's a fun family activity. So
I think for that reason, we're more willing to go
(02:10):
to the car wash. I will say, though, the one
that we typically go to It used to be five
bucks for a wash, and they bumped up to nine yeah,
and I was like, that's a big steep price increase,
so I'm going a lot less. But now we're getting
in the season where maybe I have to be able
to play membership thing too.
Speaker 2 (02:23):
I think it was strategic. I know exactly which one
you're talking about, because if you bump the price up
pretty close to the cost of the membership, they're more
likely to do it. And then folks who are thinking, well,
I'm not going to pay for I'm not going to
pay nine dollars for a single wash, but you're like,
but I will maybe go ahead and join, and then
they've got you on that subscribation model. That's what they
are after put it on the calendar. Of course it's online.
I'm going to make sure to cancel that.
Speaker 1 (02:41):
Jont always put the cancelation date on your calendar so
you don't forget two days before it's supposed to.
Speaker 2 (02:47):
Renew, right, Actually, yeah, I got it three days because
it's specifically in the fine prints something about three days.
And so I was like, all right, yeah, shoot, maybe
I'll just bump it up to four, you know, just
just to play it safe man, just in case, all right.
Right after we got done recording the Friday flight last week,
the President issued an executive order announcing the shutdown of
the Department of Education. And maybe actually that's not correct
(03:08):
because he can't shut it down. He can't eliminate a
federal agency, but he can essentially gut it make it
far less effective.
Speaker 1 (03:15):
I feel like you and I were having to monitor
political realities like can the president do this or not?
And is there going to be a legal battle ensuing
because of this?
Speaker 2 (03:25):
Exactly so, Congress would actually have to join him if
he wanted to eliminate that department completely. So for at
least for now, the Education Department retains oversight of student
loans and some of the other essential programs. But the
ultimate goal is to transfer student loans to the Small
Business Administration and to eliminate the strings attached to states
over how it is that they run education. Basically, the
(03:48):
funding would be offered in block grants directly to the
states instead of making it conditional. Is this a good thing, though,
that's the big question. It's hard to say at this point.
One concern is that special education it could lose out
on meaningful, necessary funds. But one thing is for sure,
education results in a country like hours it should not
(04:09):
be deteriorating the way that we have seen it's in
the recent years, recent decades.
Speaker 1 (04:14):
Those test scores not good match.
Speaker 2 (04:15):
And I'm not sure that the Department of Education that
it's you know, that's improved education in our country since
it's founding over the past several decades.
Speaker 1 (04:24):
Yeah, I mean, the folks over at Reason magazine had
a headline that said invest in education, not the Department
of Education. It's a good headline, and I think that's
kind of the heart of what the Trump administration is
trying to get at here, although again in a legally
dubious way. Their argument though at Reason magazine, was basically
that more federal control hasn't produced better results, kind of
(04:45):
like you're insinuating, right, And in fact, we spend a
lot more at the state and federal level than we
do and did in decades past, So something like seventeen
thousand dollars is spent per student annually, and then at
the same time, test scores are just getting worse and worse.
We're like sixteenth in science, thirty fourth in math, like globally,
globally like it's it's not great when you think about
(05:07):
the richest nation on earth. That should not be the case.
And so we were just so much more internationally competitive
in nineteen seventies, and then you know, the lower performing
students suffer the most in this sort of environment, which
is tough to watch. And so there's just a lot
of details that haven't been fleshed out about this transition,
including the lawsuits against the Trump administration for attempting to
shut down the Education Department via an executive order. I
(05:30):
think as far as how to money, the how to
money audiences concerned map if student loans do get transferred
to the SBA, there could be service issues there have
already just I mean, the student loan issues are mouthing.
We're going to bring someone on soon to talk about
what's going on with student loans, because it is it
is a kerfuffle, to say the least. And if you
have student loans right now, I'm sure you're worried in
(05:52):
many peace and many people have gotten massive payment hikes
recently too that they don't know what to do, they're
not sporth to do with that.
Speaker 2 (05:59):
Well, there's been a lot of angst about the inability
to recertify family income and family size on the Department
of Education website. So some folks have gone past their
deadline through no fault of their own. So this is
some good news here. Late last week, the Education Department
issued in order to pause recertification until February of next year.
So this is good news for a whole lot of folks,
(06:21):
and it will keep many from experiencing a shock in
the required monthly payment as they regarding the data that
goes into the formula that decides what it is that
you owe.
Speaker 1 (06:30):
Yeah, I think the tough part is it feels like, oh,
we want to make this change, but we don't have
a plan for what happens in the interim, and we
don't really actually know where we're headed either, and so
there's just a lot of ambiguity when it comes to
the future of student loans and even people who currently
have student loans right now, which is a frustrating place
to be. And I'm sure you and I will be
talking about this Education Department shut down and the impacts
(06:53):
of that for months to come.
Speaker 2 (06:55):
Totally, and I will say a quick note on public
funding of public education. We are totally fans of public education,
like all of our kids go to public schools. Don't know,
we don't do private schools.
Speaker 1 (07:06):
You can tell we're dummies. We graduate from public schools ourselves.
Speaker 2 (07:09):
But how it is that you fund schools it matters
a lot, And I think that's the biggest argument that
the more you're able to decentralize this funding. It's not
that we're looking that we're proponents of cutting funding, no,
but how you fund the schools, the ability for that
funding to follow individual students. Right, So school choice, backpack funding,
where the dollars follow where the kids are actually going,
(07:30):
promotes competition, which what do we see in free markets?
When we have competition, it leads to better results. Not
to mention the access that families have to a higher
level of education or a different type of education where
there aren't massive barriers like making sure you live in
the right zip code, where houses just across that zip
code line are significantly more expensive due to the school
(07:53):
districts and how they're drawn up.
Speaker 1 (07:55):
If you're thinking, oh, man, I wish my kid didn't
have to take so many tests mandatory tests in school,
well that's that's often a federal mandate too, required by
the states in the school districts to test your kid
a certain amount in order to receive the funding that
they that they want. Matt Frontier did a little clap
back to Southwest. Did you see that clap back?
Speaker 2 (08:16):
I hate that term.
Speaker 1 (08:17):
Oh sorry, I'm using it.
Speaker 2 (08:19):
No, I did see the I saw.
Speaker 1 (08:21):
I think this is awesome.
Speaker 2 (08:22):
Do you think do you think it's silly, silly in
fun or is it stupid and dumb?
Speaker 1 (08:27):
I think it's I think it's silly and fun and
potentially a boon for consumers because basically what they said,
you know, we talked about this.
Speaker 2 (08:33):
It's a told on the show. It's a total Frontier
troll moves.
Speaker 1 (08:36):
Yes, it's a troll move. That's exactly what it is.
And so Southwest basically says, hey, we're gonna we're gonna
start charging for check bags, and then Frontier says, hey,
we're gonna go the south the former Southwester out and
we're not going to charge people to check bags when
they fly for a Frontier at least in the coming months.
And what they put in the pressure release, I don't
know if you read that far, but they said, hey,
(08:57):
this might stay permanent if you guys like it. Let
us know. And so I think this is brilliant because
this was Southwest calling card. It was the one thing
that made them stand out. And if Frontier front takes
that mantle, they're there to scoop.
Speaker 2 (09:09):
Up the scoop up.
Speaker 1 (09:10):
Yeah, what's crazy?
Speaker 2 (09:12):
In the press relief, did you notice the number of
times they use the word love so many?
Speaker 1 (09:18):
It's just a Southwest model.
Speaker 2 (09:19):
That's they're like literally the Southwest heart right, and they
literally included amazing the I guess the CEO of Frontiers
even said the line We've always had heart. It's a
total troll movie.
Speaker 1 (09:30):
But you got to capitalize, like when your competitor makes
a misstep, which Southwest really might have done here. Yeah,
that's true. That is what Frontier is doing, and they
could I think they could really draw customers from from
Southwest to say, yeah, well actually that was something I prioritize.
I'm going to jump over to Frontier and check out
their check out their airline because I have to pay
for my bags for the time being in maybe just
(09:53):
maybe forever.
Speaker 2 (09:53):
We'll see if it sticks around. Let's talk about food
delivery because door Dash announced last week that you can
split payments for or your twelve dollars fast food order
into bite sized amounts via Klarna.
Speaker 1 (10:05):
I like the bite size.
Speaker 2 (10:06):
Yeah. It so not only can you pay in four
which means you can you know, you can pay like
three dollars a month over the course of four months,
but you can also opt to pay later when you're
kicking the cannon down the road, when it's gonna be
more convenient for you. Joel, you don't have to pay
for this now, pay for it later.
Speaker 1 (10:20):
You also sad twelve dollars burger, which I think if
you go to rustaurant, you're get a burger for twelve dollars,
but if you're gonna get delivered, think about all the
extra fees and stuff like that.
Speaker 2 (10:27):
Eighteen dollars.
Speaker 1 (10:28):
Yeah, honest.
Speaker 2 (10:30):
A lot of folks take this option, though, and then
they pay the Klarna fees for the pleasure of waiting
even longer to pay. We don't use these apps, but
evidently this was already possible on grub hub. I did
not realize that. And the corporate line is total trash man.
They say that we're we're making convenience even more accessible
for millions, and it sounds like they're being so kind.
(10:52):
This is garbage man. And it's honestly ridiculous that anyone
would need to pay for a meal via installments because
if you, I feel like such a traditional here, but
if you can't afford the full price of the meal,
you should be paying for it in cash. You can't
afford to pay later either.
Speaker 1 (11:05):
Typically you're ordering from a smartphone or a computer, which means.
Speaker 2 (11:10):
That in and of itself tells you something about right,
but what you should be able to do?
Speaker 1 (11:13):
You have the money to afford something unless you paid
for that and installments to which which possibly But to me, yeah,
this feels perpetual cycle. Yeah, it feels like the culmination,
but it might not be Like what else can you
buy now? Pay later? We will find out, I guess
in the coming months. But yeah, I don't want to
sound unsympathetic, but cook it home or don't don't order
(11:34):
something if you if you really can't afford to pay
the price for it. And every time we make the
reality of paying for something more opaque, or we reduce
the friction involved, we're more likely to use that service
because we like to not feel the pain of the purchase.
But ultimately the pain comes later down the road. If
you're paying for convenience with money you actually have in
(11:56):
your bank account, do your thing. But if you're paying
more for convenience with money you don't have, that is
another thing. And yeah, it feels dystopian.
Speaker 2 (12:05):
Man.
Speaker 1 (12:05):
I love a good dystopian TV show or book, and.
Speaker 2 (12:08):
When it starts becoming real life again, it feels so
fundamentalist for us to be like cook more at home,
like we're I feel like we're becoming the ultimate like
trad dads, which I'm not even sure if that's the term,
but if it's not, it should be. There's no way
it's not a term. Though. I'm gonna mention this. Did
you see the article about folks opting to throw their
leftovers away or they're not even taking their to go
(12:29):
boxes home and dotty bags? And I imagined your tears
as you read that article, especially, I mean the picture
in the article too. It's like, you get the takeout
or not the takeout, you get the to go a bag,
and then it's like, oh, folks just kind of leave
it there because I don't know, maybe it doesn't seem
cool to take the leftover food. I totally hate that. Americans. Yes,
(12:49):
they're used to these giant portions, which means eating an
entire restaurant meal is ill advised. But don't toss out
what you can't eat, take that junk home, ethos extras
for lunch instead, monopolize those leftovers. We're collectively eating up more.
We're ordering food. You know that we don't cook on
the rag, but normalizing that is causing a financial pinch
(13:10):
for many. But then on top of that, it's like
coals on top of you know, keeping coals on. Someone
said here, tossing out the extras, and then look, you
go to work, and then you end up going out again.
It's just again, it feels like this perpetual cycle of
ill conceived, poor financial decisions that more Americans are making.
Speaker 1 (13:27):
It's funny how much we highlight the reality of inflation
at the grocery store, and deservedly so. I mean, it's
it's been a problem. And egg prices, for instance, like
I get frustrated to paying you ten dollars essentially for
eighteen eggs at Costco.
Speaker 2 (13:42):
Now the prices are coming down. Yeah, I don't know
if you've noticed they are.
Speaker 1 (13:45):
They're starting to come down with all those is it
pults or pullets pullets.
Speaker 2 (13:49):
Yeah, yeah, I know, arriving to egg laying age. Yeah,
which is just like we talked about a couple of
months ago, hanging their foots. This doesn't last forever.
Speaker 1 (13:58):
But what we never highlight, it seems, are the ways
which were like our own worst enemy when it comes
to food inflation. And part of that we talk about
buying store brands stuff like that, but we never talk
about or rarely talk about food waste. And like, when
you look at the bottom line, that's one of the
number one contributors to our food budget is essentially we're
buying so much stuff that actually gets tossed in the trash.
(14:20):
And if we were just hate food waste, Yeah, if
we were a little more thoughtful about eating our leftovers,
and if we were a little more a little better
at meal planning so that we bought the appropriate stuff
that we weren't just like buying stuff randomly and then
trying to create a meal in the back end, we
would find that I think there would be less food
waste and our food budgets would remain a little more intact.
(14:40):
So part of it's the grub hub orders and the
buy now pay laters and all that kind of stuff.
Part of it's literally just buying more than we need
and then that stuff getting thrown away and not eating
your leftovers is part of that.
Speaker 2 (14:52):
I hate it, man, But we've got more to get
to here. On the Friday flight, we're gonna we will
get to the Torch Tesla's story and what that means
for you, even if you don't own a Tesla though.
That more right after this.
Speaker 1 (15:09):
All right, man, we got more money stuff we gotta
get to, including let's talk about the twenty five percent
auto tariffs in just a second. They're supposedly coming down
the pike. We'll get to that in a minute. But
now let's get to the lucros headline of the week.
This one comes from the Free Press, and the headline reads,
the World Happiness Report is a sham And did you
see that come out this week? And all the headlines
(15:30):
around I did, I did, and I was I don't
really care about this stuff much, but this article was
super fascinating because it was basically saying, hey, this World
Happiness Report is complete bunk, and they talked about the
methodology behind it. I think it's worth covering here largely
because of like the how much news coverage you got.
But the Scandinavian countries, of course, we're again at the
(15:51):
top of the heap. Finland topped the list for the
third year in a row. I am of Norwegians descent,
so I like to believe that my people are happier,
but I don't know that that's actually true. So the
US moved down the list. We now said it twenty
fourth in world happiness, which, yeah, it perpetuates. I think
a stereotype, both negatively of US and positively of some
(16:12):
of those Scandinavian countries. But this Free Press author dug
into the methodology to see what was going on behind
the scenes, like why is this happening? And he found
that there was essentially zero sophistication to this survey, that
the sample size is tiny, and it's one single, poorly
worded question is used in an attempt to determine how
(16:34):
happy people are in a given country. You should read
the piece for full details. We'll link to it in
the show notes.
Speaker 2 (16:38):
It does not seem very robust, No, like that's that's
what we're to say the least.
Speaker 1 (16:42):
But so if I say to say, I think our
conceptions of Scandinavia, maybe aren't the same as reality. And
you know, when we think, oh, they're so much happier
than we are, I think it creates this comparison game,
and I think a deeper dive would probably reveal a
much smaller disparity.
Speaker 2 (16:58):
Yeah, I think a more specific assessment and would deliver
perhaps different results that might not fit the preconceived notions
that we already hold. So we're kind of like stepping
up to the plate for America here for a second,
is what we're doing in this report. It just gets
so much press without having much rigor behind it. That
being said, it's probably worth discussing though, the relationship between
money and happiness for a second, because inhabitants of richer countries, well,
(17:22):
they do tend to express higher levels of happiness than
folks in poor countries. However, there are loads of unhappy
rich folks, and there's also a slew of really happy
non wealthy people, and vice versa growing national wealth, it
doesn't necessarily mean that the happiness line is just going
to go up into the right. How wealth actually impacts
(17:42):
happiness is really hard to pin down. I think, if
you want our review in a nutshell, I think having
more money it can buy you more freedom.
Speaker 1 (17:51):
We're all about.
Speaker 2 (17:51):
Talking about financial independence and optionality. It allows you to
be more generous as well, but it's not.
Speaker 1 (17:57):
Talked about with Derek recently on the show say yeah,
how much happiness that kid?
Speaker 2 (18:01):
How much good can you do? You? Yeah, with that money.
But it's not going to change the core of who
you already are. It's more of an amplifier of the
things that you already believe. So that being said, if
you think you're going to be happier when you double
your income or when you double your net worth, I
think this is highly unlikely. It doesn't mean that these
aren't good goals to have, but just don't pursue them
(18:22):
to the exclusion of the real things that truly produce happiness.
And one key insight from the World Happiness Report that
I can totally one percent get behind man. Here's a quote.
Those who share more meals with others report significantly higher
levels of life satisfaction. This is true across ages, genders, countries, cultures,
(18:43):
and regions, which oh my gosh, yes, like what it
is that we spend our money on, that's what matters, right,
You continue to spend your money on cheap crap from
the internet that you're that's going to end up in
the trash. Yeah, no, wonder you aren't happy that that
is not leading to higher levels of happiness. But when
you spend your money on things that provide more community,
for instance, like you know, we come down hard on
(19:05):
going out to eat, but let's say you're going out
to eat with some friends, or you're meeting up for drinks,
or you're even just getting coffee. That's even more affordable.
Things that enrich community, joining us social club or going
on a vacation together. We were just old talking last
night with a friend of ours who is going on
vacation with another couple. So pump for them. I'm like,
you've got to go on this, don't. They're a little
worried about the kids and how they're gonna feel about
(19:28):
them leaving, you know, just anxiety things like that. But like,
those are great things to spend money on. And it
totally aligns too with the Harvard Happiness Study. Eighty five
years of data points to the fact that the number
one factor that leads to higher levels of happiness in
these in these individuals that they've been studying, and they've
expanded this out to also their families, so it's not
just these original guys. Are the friendships that they're able
(19:51):
to have and maintain. So keep that in mind.
Speaker 1 (19:54):
Yeah, it could be going out to eat, but it
could just be inviting someone over to your house for
a meal. That's a whole lot cheaper to cook. Yeah,
even if you're cooking for someone else, or a hike,
a walk, I mean, those kinds of things are It
can be so basic, but yeah, it's amazing how connection
with others. There's even a Vox article I read this week, Matt,
about how introverts should force themselves to become extroverts a
(20:15):
little more frequently because it's gonna it's gonna increase their
happiness levels. Like they're maybe a little anxious about it
on the front end, but after afterwards, they do report
higher levels of happiness. I believe it because relational connection.
It's it's the secret sauce behind happiness so important. Not
that money doesn't play a role, but I think it's
its role is a little overstated. Let's talk about cars
(20:36):
for a second, Matt, uh and car insurance as well,
because analysts in the insurance space their warning that insurance
costs are about to rise. Obviously that's already happening, but
we're not just talking about general inflation related price hikes.
That is something that we've seen. Anybody who owns a
home or a car has gotten to notice from their
insurance company and they're like, ex that's expensive. Well, Tesla
(20:59):
owners specifically will be paying more because of the vandalism
that's been happening at Tesla dealerships and Tesla cars across
the country, just to individual owners. I heard someone Matt
recently talk say that they got stopped by someone and
they were like knocked on the window. He rolled down
the window and they're like, you need to get rid
of that car man, like in like a threatening way,
(21:19):
which is just kind of difficult to imagine someone you
don't know doing that to you. Elon musk Horse has
not made himself a subject of empathy in this country.
Quite the opposite. I think his seeming neglect of his
company too. It's led to a massive decline in market value.
And then other electric car manufacturers, like BYD in China,
(21:41):
they're announcing amazing innovations and it just seems like Elon's
taking his eye off the ball. A little bit here.
I think what BYD says they can charge their evs
in five minutes now, which is insane, But.
Speaker 2 (21:54):
Five minutes gets you two hundred and fifty miles.
Speaker 1 (21:56):
Yeah, that's crazy. Yeah, but like that in the US, Yeah,
I know, right Eon, and then Tesla by proxy, they've
drawn the ire of Americans who don't like what Dog
is doing, and the consequences are piling up in Some
of those consequences for Tesla owners in particular, could be
higher insurance rates. Yeah, it seems like all the currents
are currently against Tesla right now, and also Tesla owners,
(22:16):
you know, because it's not just the shure rooms, but
private owners are having their Tesla cars burned, painted the
faced and evs are already more expensive to ensure because
of the high cost of replacing the batteries. But if
your Tesla is also seen as a political symbol, there
is a higher likelihood of it being vandalized, which could
lead to an insurance claim. Insurance companies are likely to,
(22:37):
I mean, we'll see, I guess like they are likely
to raise premiums higher on Tesla owners, specifically to deal
with an increase in expensive claims. But as we've seen
with the way that insurance markets work. It's something that
has passed on to everyone at a certain point, and
it's one thing for Elon's actions to have personal financial
and business consequences. But it just sucks to see folks
(22:58):
who just went out there, you know, they bought a
Model three for environmental or economic reasons. Kind of they've
been forced into the public the political fray to a
certain extent.
Speaker 2 (23:08):
I think a lot of those like, they're like, I
didn't even I'm not trying to make a statement here, guys,
I just want an awesome car.
Speaker 1 (23:12):
Right exactly most people, and we've talked about the financial
realities of buying a Model three versus even something like
a Toyota Corolla, and the Toyota coroll used to be
the cheapest car in the United States essentially to own
and operate, and the Model three has kind of become that,
even though it's got a higher initial sticker price, and
so a lot of people are saying, oh cool, this
is going to lower my monthly costs. I'm not paying
paying for gas, and it's a good ride. I like
(23:35):
driving it. They are kind of fun to drive. They
just weren't assuming that it was going to draw political
eyeballs because of what's happening in Washington right now. Matt,
we should talk too, while we're on the car note
about tariffs. And we've talked about tariffs before on the show,
but now the President introduced twenty five percent tariffs against
imported cars into this country and this is supposed to
(23:57):
take effect to April third, and it's kind of hard
to no, I guess, in some ways, how to talk
about tariffs on the show, because there were tariffs that
came into being that got drawn back quickly, or that
were announced that we're pulled back before they've been implemented.
Speaker 2 (24:11):
And that sis made to certain companies or certain sectors.
Speaker 1 (24:14):
A lot of tariff whiplash going on because and that's
been really hard for businesses to figure out, well, how
do I what do I do when when tariffs are
being touted but then not necessarily brought to bear. And
some estimates are saying that price hikes on new cars
could be in the six to twelve thousand dollars range
(24:35):
if these tariffs come through. And as a friend of
the show, Kyla Scanlon put it, she put she said,
chaos is expensive, and I think we're bearing the fruit
of some of that political chaos. Political chaos, and how
much it's it could cost us. If these tariffs actually
do come through, we are going to see not just
higher prices on new vehicles, but second and third order
effects of those tariffs, which could which is going to
(24:58):
mean more people instead of going to the new vehicle,
they're going to the used market. Used card prices are
going to go up to and then even think about
folks working in the auto sector, we could see more
layoffs or furloughs of employees too in that space. So
we'll see. I don't know if these terrorists are actually
going to be implemented, but if they are, or if
they're just threats.
Speaker 2 (25:17):
Stuff to know. And I think it depends on which
side of the aisle you've fall into as to whether
or not you think that these are going to be
a good thing or not. But I don't know from
an economist state, and we've talked about this, right but
from most economists are like, no, this is going to
be pretty terrible for the economy. Prices will go up.
Speaker 1 (25:31):
Tariffs. Are economists on both sides of the aisle ten
to agree they're a terrible thing for consumers.
Speaker 2 (25:37):
Yeah, but one thing most politicians, though, are agreeing on
right now are rate caps on credit cards. Politicians on
both sides of the aisle, they tend to think that
curbing credit card interest rates to a maximum of ten
percent that will help their hurting constituents. But they are
wrong because while this sounds kind and nice, it's going
to be bad on so many levels. The unintended sequences.
(26:00):
The negative outcomes could be significant, including no credit card
access for folks who don't have high credit scores, leaving
others to lean on even worse lending products. CNBC reported
that ninety five percent of subprime borrowers wouldn't have access
to a credit card anymore.
Speaker 1 (26:18):
And somebody let that go. You know, yeah, they go
to paid loans, and they go to worse title loans. Yeah, like,
come on, they don't want that.
Speaker 2 (26:25):
Credit Card companies would likely increase other fees as well,
and so this is again something that would impact everybody. So,
you know, what sounds like kind of a nice thing
to do, would do real damage to the economy. So
I'm hoping that this effort at bipartisanship actually fails, because yes,
I am not a fan of a twenty five percent
credit card. I don't want you paying that, but a
(26:46):
ten percent rate cap could surprisingly to many. I think
it could actually be worse.
Speaker 1 (26:51):
And I think that's the thing that doesn't get discussed
enough to it is the downstream effects of a decision
like that because it is something that sounds nice coming
out of a politician's mouth. Yeah, Hey, I've got credit
card debt and I'm paying twenty three percent of visa MasterCard.
This sucks and it's going to take me forever to
pay off this debt.
Speaker 2 (27:07):
Because of that, everything has a tertiary effect or secondary effect,
Like there are things that was is the butterfly effect,
butterfly effect, I've never I've never watched that movie. But
when that all about like one small thing, like it
is a long time the beat of a butterfly race,
Like the difference in that and just the downstream effects
are significant. And I think if we're going to say
temper political scorekeeping that everyone is engaged in, like all
(27:27):
they want to do are they just want to get
the wins and here and now, and they're not at
all looking at our country or at the economy more holistically.
Speaker 1 (27:34):
If we're going to say ten percent, Why not five percent?
Why not two percent? Why not be even more generous?
I mean, if you cap interest rates at some point,
you you create other distortions in the economy. And think
about this too, Matt. There is actually more competition than
people might imagine in the credit card game, so they
can't just raise their interest rates as high as they want.
There are other credit card companies out the stuff. Think
(27:55):
of even credit unions, Like if you want a lower
APR on your credit card, a credit uni is often
the way to go. You might be able to get
an eleven or twelve percent rate, far below the average
market rate. Or think about balanced transfer cards. That's another
way that people can, you know, kind of ditch the
extremely high rate at least for a time, in an
effort to pay off their credit card more quickly without
paying interest. So there are a lot of options for consumers.
(28:17):
And ultimately, what we always say is like, don't use
credit cards right if you can't pay them off on
time and in full every month. But this, this political
proposal would yeah, it would ultimately be a pretty dismal
failure and it would have more impacts than these politicians realize.
By the way, Matt, while we're talking about credit cards.
Let's talk about gift cards for a second. I do
believe I am contractually obligated to throw shade at gift
(28:39):
cards at least twice a year.
Speaker 2 (28:40):
At least. Okay, I was gonna say, if you've already
hit your quota, then I.
Speaker 1 (28:44):
Already if it's the Nate, So I see it's not
even We're not even through the first I guarantee.
Speaker 2 (28:49):
We talked about gift cards earlier this year, you know,
like at the tail end of the holidays. That sounds
like something we would do.
Speaker 1 (28:54):
Well, I'll just quickly mention your favorite store, Joannes Fabrics
just went out of business, which is.
Speaker 2 (29:01):
So funny because I actually went to a Joanne. I
haven't been to one, and maybe ever I have never
been there, but I went there and bought some affordable
fabric to make those sound panels in the garage, oh acoustic.
Speaker 1 (29:12):
Yeah, that's where I got this. We didn't buy enough
because they're they're having financial troubles.
Speaker 2 (29:17):
I saw that going out of business line.
Speaker 1 (29:19):
Yes, well, all eight hundred locations have announced that they're
no longer accepting gift cards, even though they're still open
and they're doing going out of business sales, which, by
the way, those going out of business sales, they like
have the big signs about how much massive discounts stole liquidation.
They're usually not nearly as good as you think they're
going to be. But yeah, for anyone now with a
Joann's gift card, it's completely worthless.
Speaker 2 (29:40):
That's so crappy.
Speaker 1 (29:41):
It sucks. And this is why my advice typically is
with a gift card, only by it if there's a
discount attached. Yeah, but you think about it, man, if
you've got I don't know how much outstanding balance there
is on gift cards for Johanne's customers, but not a ton. Yeah,
but I hate I hate seeing this.
Speaker 2 (29:56):
Yeah, let's be honest. I probably would have shorted Joanns.
I wouldn't have gone along just given the I mean,
it kind of goes back to the food delivery. Who's
out there, who's willing to do the hard work of
creating something at home making their own Like people don't
even want to cook their own meal, let alone make
their own curtains or address or whatever. Although this guy
right here made his own acoustic panels for his garage
(30:17):
less eque. Oh before we wrap things up. A quick
shout out to Liam G for referring the how to
Money newsletter to some of his friends. Comes out every
Tuesday morning, and it's packed full with personal finance nuggets
of wisdom. Make sure to sign up over at how
to money dot com forward slash newsletter if you are
not already subscribed, and if you are, share it with
(30:39):
a friend like Liam did, I'll give you a give
you a nice little shout out. But buddy, that's going
to be it for this episode. Everyone have a fantastic weekend.
We'll see you back here on Monday, and until next time,
Best Friends Out, Best Friends Out. M four
Welcome to out of Money. I'm Joel.
Speaker 2 (00:02):
I am not.
Speaker 1 (00:03):
Today we're talking education, visceration, bing pl burgers and torched Tesla's.
(00:28):
That's right, buddy, this is our Friday flight.
Speaker 2 (00:30):
We're going to talk about the headlines. Then we came
across this week happy.
Speaker 1 (00:34):
I'm really proud of my literation this week.
Speaker 2 (00:35):
I thought I did an extra specially education evisceration in particular.
That's a good one. But uh, I wanted to say
happy spring and a happy pollen season because where we
are it is insane right now. We both went for
friends this morning. Does it impact you, like when you're
running in the pollen? Does it just get funneled into
your eyes and you come home and.
Speaker 1 (00:53):
You just you struggle.
Speaker 2 (00:54):
I don't. I dealing a lot more with pollen, which
hey a quick, frugal or cheap. I splur and paid
for a month membership at a car washh So you know.
Speaker 1 (01:05):
The cars get super yellow? What does that cost? Fifteen
twenty bucks?
Speaker 2 (01:08):
Twenty two dollars? Okay for the one that is literally
I basically drive through this parking lot anyway sometimes to
skip this light, literally just zoom through. Yeah, you're five
times a week? Why not, but thoughts, what do you
think frugal cheap? So normally that location they charge eleven
or twelve bucks per wash, so I figure you go
(01:28):
through that thing twice and it pays for itself. Man,
especially this time of year.
Speaker 1 (01:31):
I dig it. I think this time of year, but
cancel the membership because I think most months you don't
need it, but in pollen season you need it more.
Speaker 2 (01:38):
I I'm more than happy because it builds up and
it gets in the crevices, and then that pollen it
turns into like dirt and then it's caked on like
around with the door seals. You know what I'm talking about.
Speaker 1 (01:48):
Oh yeah, that's where it gets supernest. For my family,
it's like an adventure too. Everybody fun, everybody loves going,
and it's the only time my kids are excited about cleaning.
If we go to the car wash, brainwashed on it
and then they're like, yeah, let's let's like spray it
down and clean it out and vacuum it and stuff.
So they enjoy that. It's a fun family activity. So
I think for that reason, we're more willing to go
(02:10):
to the car wash. I will say, though, the one
that we typically go to It used to be five
bucks for a wash, and they bumped up to nine yeah,
and I was like, that's a big steep price increase,
so I'm going a lot less. But now we're getting
in the season where maybe I have to be able
to play membership thing too.
Speaker 2 (02:23):
I think it was strategic. I know exactly which one
you're talking about, because if you bump the price up
pretty close to the cost of the membership, they're more
likely to do it. And then folks who are thinking, well,
I'm not going to pay for I'm not going to
pay nine dollars for a single wash, but you're like,
but I will maybe go ahead and join, and then
they've got you on that subscribation model. That's what they
are after put it on the calendar. Of course it's online.
I'm going to make sure to cancel that.
Speaker 1 (02:41):
Jont always put the cancelation date on your calendar so
you don't forget two days before it's supposed to.
Speaker 2 (02:47):
Renew, right, Actually, yeah, I got it three days because
it's specifically in the fine prints something about three days.
And so I was like, all right, yeah, shoot, maybe
I'll just bump it up to four, you know, just
just to play it safe man, just in case, all right.
Right after we got done recording the Friday flight last week,
the President issued an executive order announcing the shutdown of
the Department of Education. And maybe actually that's not correct
(03:08):
because he can't shut it down. He can't eliminate a
federal agency, but he can essentially gut it make it
far less effective.
Speaker 1 (03:15):
I feel like you and I were having to monitor
political realities like can the president do this or not?
And is there going to be a legal battle ensuing
because of this?
Speaker 2 (03:25):
Exactly so, Congress would actually have to join him if
he wanted to eliminate that department completely. So for at
least for now, the Education Department retains oversight of student
loans and some of the other essential programs. But the
ultimate goal is to transfer student loans to the Small
Business Administration and to eliminate the strings attached to states
over how it is that they run education. Basically, the
(03:48):
funding would be offered in block grants directly to the
states instead of making it conditional. Is this a good thing, though,
that's the big question. It's hard to say at this point.
One concern is that special education it could lose out
on meaningful, necessary funds. But one thing is for sure,
education results in a country like hours it should not
(04:09):
be deteriorating the way that we have seen it's in
the recent years, recent decades.
Speaker 1 (04:14):
Those test scores not good match.
Speaker 2 (04:15):
And I'm not sure that the Department of Education that
it's you know, that's improved education in our country since
it's founding over the past several decades.
Speaker 1 (04:24):
Yeah, I mean, the folks over at Reason magazine had
a headline that said invest in education, not the Department
of Education. It's a good headline, and I think that's
kind of the heart of what the Trump administration is
trying to get at here, although again in a legally
dubious way. Their argument though at Reason magazine, was basically
that more federal control hasn't produced better results, kind of
(04:45):
like you're insinuating, right, And in fact, we spend a
lot more at the state and federal level than we
do and did in decades past, So something like seventeen
thousand dollars is spent per student annually, and then at
the same time, test scores are just getting worse and worse.
We're like sixteenth in science, thirty fourth in math, like globally,
globally like it's it's not great when you think about
(05:07):
the richest nation on earth. That should not be the case.
And so we were just so much more internationally competitive
in nineteen seventies, and then you know, the lower performing
students suffer the most in this sort of environment, which
is tough to watch. And so there's just a lot
of details that haven't been fleshed out about this transition,
including the lawsuits against the Trump administration for attempting to
shut down the Education Department via an executive order. I
(05:30):
think as far as how to money, the how to
money audiences concerned map if student loans do get transferred
to the SBA, there could be service issues there have
already just I mean, the student loan issues are mouthing.
We're going to bring someone on soon to talk about
what's going on with student loans, because it is it
is a kerfuffle, to say the least. And if you
have student loans right now, I'm sure you're worried in
(05:52):
many peace and many people have gotten massive payment hikes
recently too that they don't know what to do, they're
not sporth to do with that.
Speaker 2 (05:59):
Well, there's been a lot of angst about the inability
to recertify family income and family size on the Department
of Education website. So some folks have gone past their
deadline through no fault of their own. So this is
some good news here. Late last week, the Education Department
issued in order to pause recertification until February of next year.
So this is good news for a whole lot of folks,
(06:21):
and it will keep many from experiencing a shock in
the required monthly payment as they regarding the data that
goes into the formula that decides what it is that
you owe.
Speaker 1 (06:30):
Yeah, I think the tough part is it feels like, oh,
we want to make this change, but we don't have
a plan for what happens in the interim, and we
don't really actually know where we're headed either, and so
there's just a lot of ambiguity when it comes to
the future of student loans and even people who currently
have student loans right now, which is a frustrating place
to be. And I'm sure you and I will be
talking about this Education Department shut down and the impacts
(06:53):
of that for months to come.
Speaker 2 (06:55):
Totally, and I will say a quick note on public
funding of public education. We are totally fans of public education,
like all of our kids go to public schools. Don't know,
we don't do private schools.
Speaker 1 (07:06):
You can tell we're dummies. We graduate from public schools ourselves.
Speaker 2 (07:09):
But how it is that you fund schools it matters
a lot, And I think that's the biggest argument that
the more you're able to decentralize this funding. It's not
that we're looking that we're proponents of cutting funding, no,
but how you fund the schools, the ability for that
funding to follow individual students. Right, So school choice, backpack funding,
where the dollars follow where the kids are actually going,
(07:30):
promotes competition, which what do we see in free markets?
When we have competition, it leads to better results. Not
to mention the access that families have to a higher
level of education or a different type of education where
there aren't massive barriers like making sure you live in
the right zip code, where houses just across that zip
code line are significantly more expensive due to the school
(07:53):
districts and how they're drawn up.
Speaker 1 (07:55):
If you're thinking, oh, man, I wish my kid didn't
have to take so many tests mandatory tests in school,
well that's that's often a federal mandate too, required by
the states in the school districts to test your kid
a certain amount in order to receive the funding that
they that they want. Matt Frontier did a little clap
back to Southwest. Did you see that clap back?
Speaker 2 (08:16):
I hate that term.
Speaker 1 (08:17):
Oh sorry, I'm using it.
Speaker 2 (08:19):
No, I did see the I saw.
Speaker 1 (08:21):
I think this is awesome.
Speaker 2 (08:22):
Do you think do you think it's silly, silly in
fun or is it stupid and dumb?
Speaker 1 (08:27):
I think it's I think it's silly and fun and
potentially a boon for consumers because basically what they said,
you know, we talked about this.
Speaker 2 (08:33):
It's a told on the show. It's a total Frontier
troll moves.
Speaker 1 (08:36):
Yes, it's a troll move. That's exactly what it is.
And so Southwest basically says, hey, we're gonna we're gonna
start charging for check bags, and then Frontier says, hey,
we're gonna go the south the former Southwester out and
we're not going to charge people to check bags when
they fly for a Frontier at least in the coming months.
And what they put in the pressure release, I don't
know if you read that far, but they said, hey,
(08:57):
this might stay permanent if you guys like it. Let
us know. And so I think this is brilliant because
this was Southwest calling card. It was the one thing
that made them stand out. And if Frontier front takes
that mantle, they're there to scoop.
Speaker 2 (09:09):
Up the scoop up.
Speaker 1 (09:10):
Yeah, what's crazy?
Speaker 2 (09:12):
In the press relief, did you notice the number of
times they use the word love so many?
Speaker 1 (09:18):
It's just a Southwest model.
Speaker 2 (09:19):
That's they're like literally the Southwest heart right, and they
literally included amazing the I guess the CEO of Frontiers
even said the line We've always had heart. It's a
total troll movie.
Speaker 1 (09:30):
But you got to capitalize, like when your competitor makes
a misstep, which Southwest really might have done here. Yeah,
that's true. That is what Frontier is doing, and they
could I think they could really draw customers from from
Southwest to say, yeah, well actually that was something I prioritize.
I'm going to jump over to Frontier and check out
their check out their airline because I have to pay
for my bags for the time being in maybe just
(09:53):
maybe forever.
Speaker 2 (09:53):
We'll see if it sticks around. Let's talk about food
delivery because door Dash announced last week that you can
split payments for or your twelve dollars fast food order
into bite sized amounts via Klarna.
Speaker 1 (10:05):
I like the bite size.
Speaker 2 (10:06):
Yeah. It so not only can you pay in four
which means you can you know, you can pay like
three dollars a month over the course of four months,
but you can also opt to pay later when you're
kicking the cannon down the road, when it's gonna be
more convenient for you. Joel, you don't have to pay
for this now, pay for it later.
Speaker 1 (10:20):
You also sad twelve dollars burger, which I think if
you go to rustaurant, you're get a burger for twelve dollars,
but if you're gonna get delivered, think about all the
extra fees and stuff like that.
Speaker 2 (10:27):
Eighteen dollars.
Speaker 1 (10:28):
Yeah, honest.
Speaker 2 (10:30):
A lot of folks take this option, though, and then
they pay the Klarna fees for the pleasure of waiting
even longer to pay. We don't use these apps, but
evidently this was already possible on grub hub. I did
not realize that. And the corporate line is total trash man.
They say that we're we're making convenience even more accessible
for millions, and it sounds like they're being so kind.
(10:52):
This is garbage man. And it's honestly ridiculous that anyone
would need to pay for a meal via installments because
if you, I feel like such a traditional here, but
if you can't afford the full price of the meal,
you should be paying for it in cash. You can't
afford to pay later either.
Speaker 1 (11:05):
Typically you're ordering from a smartphone or a computer, which means.
Speaker 2 (11:10):
That in and of itself tells you something about right,
but what you should be able to do?
Speaker 1 (11:13):
You have the money to afford something unless you paid
for that and installments to which which possibly But to me, yeah,
this feels perpetual cycle. Yeah, it feels like the culmination,
but it might not be Like what else can you
buy now? Pay later? We will find out, I guess
in the coming months. But yeah, I don't want to
sound unsympathetic, but cook it home or don't don't order
(11:34):
something if you if you really can't afford to pay
the price for it. And every time we make the
reality of paying for something more opaque, or we reduce
the friction involved, we're more likely to use that service
because we like to not feel the pain of the purchase.
But ultimately the pain comes later down the road. If
you're paying for convenience with money you actually have in
(11:56):
your bank account, do your thing. But if you're paying
more for convenience with money you don't have, that is
another thing. And yeah, it feels dystopian.
Speaker 2 (12:05):
Man.
Speaker 1 (12:05):
I love a good dystopian TV show or book, and.
Speaker 2 (12:08):
When it starts becoming real life again, it feels so
fundamentalist for us to be like cook more at home,
like we're I feel like we're becoming the ultimate like
trad dads, which I'm not even sure if that's the term,
but if it's not, it should be. There's no way
it's not a term. Though. I'm gonna mention this. Did
you see the article about folks opting to throw their
leftovers away or they're not even taking their to go
(12:29):
boxes home and dotty bags? And I imagined your tears
as you read that article, especially, I mean the picture
in the article too. It's like, you get the takeout
or not the takeout, you get the to go a bag,
and then it's like, oh, folks just kind of leave
it there because I don't know, maybe it doesn't seem
cool to take the leftover food. I totally hate that. Americans. Yes,
(12:49):
they're used to these giant portions, which means eating an
entire restaurant meal is ill advised. But don't toss out
what you can't eat, take that junk home, ethos extras
for lunch instead, monopolize those leftovers. We're collectively eating up more.
We're ordering food. You know that we don't cook on
the rag, but normalizing that is causing a financial pinch
(13:10):
for many. But then on top of that, it's like
coals on top of you know, keeping coals on. Someone
said here, tossing out the extras, and then look, you
go to work, and then you end up going out again.
It's just again, it feels like this perpetual cycle of
ill conceived, poor financial decisions that more Americans are making.
Speaker 1 (13:27):
It's funny how much we highlight the reality of inflation
at the grocery store, and deservedly so. I mean, it's
it's been a problem. And egg prices, for instance, like
I get frustrated to paying you ten dollars essentially for
eighteen eggs at Costco.
Speaker 2 (13:42):
Now the prices are coming down. Yeah, I don't know
if you've noticed they are.
Speaker 1 (13:45):
They're starting to come down with all those is it
pults or pullets pullets.
Speaker 2 (13:49):
Yeah, yeah, I know, arriving to egg laying age. Yeah,
which is just like we talked about a couple of
months ago, hanging their foots. This doesn't last forever.
Speaker 1 (13:58):
But what we never highlight, it seems, are the ways
which were like our own worst enemy when it comes
to food inflation. And part of that we talk about
buying store brands stuff like that, but we never talk
about or rarely talk about food waste. And like, when
you look at the bottom line, that's one of the
number one contributors to our food budget is essentially we're
buying so much stuff that actually gets tossed in the trash.
(14:20):
And if we were just hate food waste, Yeah, if
we were a little more thoughtful about eating our leftovers,
and if we were a little more a little better
at meal planning so that we bought the appropriate stuff
that we weren't just like buying stuff randomly and then
trying to create a meal in the back end, we
would find that I think there would be less food
waste and our food budgets would remain a little more intact.
(14:40):
So part of it's the grub hub orders and the
buy now pay laters and all that kind of stuff.
Part of it's literally just buying more than we need
and then that stuff getting thrown away and not eating
your leftovers is part of that.
Speaker 2 (14:52):
I hate it, man, But we've got more to get
to here. On the Friday flight, we're gonna we will
get to the Torch Tesla's story and what that means
for you, even if you don't own a Tesla though.
That more right after this.
Speaker 1 (15:09):
All right, man, we got more money stuff we gotta
get to, including let's talk about the twenty five percent
auto tariffs in just a second. They're supposedly coming down
the pike. We'll get to that in a minute. But
now let's get to the lucros headline of the week.
This one comes from the Free Press, and the headline reads,
the World Happiness Report is a sham And did you
see that come out this week? And all the headlines
(15:30):
around I did, I did, and I was I don't
really care about this stuff much, but this article was
super fascinating because it was basically saying, hey, this World
Happiness Report is complete bunk, and they talked about the
methodology behind it. I think it's worth covering here largely
because of like the how much news coverage you got.
But the Scandinavian countries, of course, we're again at the
(15:51):
top of the heap. Finland topped the list for the
third year in a row. I am of Norwegians descent,
so I like to believe that my people are happier,
but I don't know that that's actually true. So the
US moved down the list. We now said it twenty
fourth in world happiness, which, yeah, it perpetuates. I think
a stereotype, both negatively of US and positively of some
(16:12):
of those Scandinavian countries. But this Free Press author dug
into the methodology to see what was going on behind
the scenes, like why is this happening? And he found
that there was essentially zero sophistication to this survey, that
the sample size is tiny, and it's one single, poorly
worded question is used in an attempt to determine how
(16:34):
happy people are in a given country. You should read
the piece for full details. We'll link to it in
the show notes.
Speaker 2 (16:38):
It does not seem very robust, No, like that's that's
what we're to say the least.
Speaker 1 (16:42):
But so if I say to say, I think our
conceptions of Scandinavia, maybe aren't the same as reality. And
you know, when we think, oh, they're so much happier
than we are, I think it creates this comparison game,
and I think a deeper dive would probably reveal a
much smaller disparity.
Speaker 2 (16:58):
Yeah, I think a more specific assessment and would deliver
perhaps different results that might not fit the preconceived notions
that we already hold. So we're kind of like stepping
up to the plate for America here for a second,
is what we're doing in this report. It just gets
so much press without having much rigor behind it. That
being said, it's probably worth discussing though, the relationship between
money and happiness for a second, because inhabitants of richer countries, well,
(17:22):
they do tend to express higher levels of happiness than
folks in poor countries. However, there are loads of unhappy
rich folks, and there's also a slew of really happy
non wealthy people, and vice versa growing national wealth, it
doesn't necessarily mean that the happiness line is just going
to go up into the right. How wealth actually impacts
(17:42):
happiness is really hard to pin down. I think, if
you want our review in a nutshell, I think having
more money it can buy you more freedom.
Speaker 1 (17:51):
We're all about.
Speaker 2 (17:51):
Talking about financial independence and optionality. It allows you to
be more generous as well, but it's not.
Speaker 1 (17:57):
Talked about with Derek recently on the show say yeah,
how much happiness that kid?
Speaker 2 (18:01):
How much good can you do? You? Yeah, with that money.
But it's not going to change the core of who
you already are. It's more of an amplifier of the
things that you already believe. So that being said, if
you think you're going to be happier when you double
your income or when you double your net worth, I
think this is highly unlikely. It doesn't mean that these
aren't good goals to have, but just don't pursue them
(18:22):
to the exclusion of the real things that truly produce happiness.
And one key insight from the World Happiness Report that
I can totally one percent get behind man. Here's a quote.
Those who share more meals with others report significantly higher
levels of life satisfaction. This is true across ages, genders, countries, cultures,
(18:43):
and regions, which oh my gosh, yes, like what it
is that we spend our money on, that's what matters, right,
You continue to spend your money on cheap crap from
the internet that you're that's going to end up in
the trash. Yeah, no, wonder you aren't happy that that
is not leading to higher levels of happiness. But when
you spend your money on things that provide more community,
for instance, like you know, we come down hard on
(19:05):
going out to eat, but let's say you're going out
to eat with some friends, or you're meeting up for drinks,
or you're even just getting coffee. That's even more affordable.
Things that enrich community, joining us social club or going
on a vacation together. We were just old talking last
night with a friend of ours who is going on
vacation with another couple. So pump for them. I'm like,
you've got to go on this, don't. They're a little
worried about the kids and how they're gonna feel about
(19:28):
them leaving, you know, just anxiety things like that. But like,
those are great things to spend money on. And it
totally aligns too with the Harvard Happiness Study. Eighty five
years of data points to the fact that the number
one factor that leads to higher levels of happiness in
these in these individuals that they've been studying, and they've
expanded this out to also their families, so it's not
just these original guys. Are the friendships that they're able
(19:51):
to have and maintain. So keep that in mind.
Speaker 1 (19:54):
Yeah, it could be going out to eat, but it
could just be inviting someone over to your house for
a meal. That's a whole lot cheaper to cook. Yeah,
even if you're cooking for someone else, or a hike,
a walk, I mean, those kinds of things are It
can be so basic, but yeah, it's amazing how connection
with others. There's even a Vox article I read this week, Matt,
about how introverts should force themselves to become extroverts a
(20:15):
little more frequently because it's gonna it's gonna increase their
happiness levels. Like they're maybe a little anxious about it
on the front end, but after afterwards, they do report
higher levels of happiness. I believe it because relational connection.
It's it's the secret sauce behind happiness so important. Not
that money doesn't play a role, but I think it's
its role is a little overstated. Let's talk about cars
(20:36):
for a second, Matt, uh and car insurance as well,
because analysts in the insurance space their warning that insurance
costs are about to rise. Obviously that's already happening, but
we're not just talking about general inflation related price hikes.
That is something that we've seen. Anybody who owns a
home or a car has gotten to notice from their
insurance company and they're like, ex that's expensive. Well, Tesla
(20:59):
owners specifically will be paying more because of the vandalism
that's been happening at Tesla dealerships and Tesla cars across
the country, just to individual owners. I heard someone Matt
recently talk say that they got stopped by someone and
they were like knocked on the window. He rolled down
the window and they're like, you need to get rid
of that car man, like in like a threatening way,
(21:19):
which is just kind of difficult to imagine someone you
don't know doing that to you. Elon musk Horse has
not made himself a subject of empathy in this country.
Quite the opposite. I think his seeming neglect of his
company too. It's led to a massive decline in market value.
And then other electric car manufacturers, like BYD in China,
(21:41):
they're announcing amazing innovations and it just seems like Elon's
taking his eye off the ball. A little bit here.
I think what BYD says they can charge their evs
in five minutes now, which is insane, But.
Speaker 2 (21:54):
Five minutes gets you two hundred and fifty miles.
Speaker 1 (21:56):
Yeah, that's crazy. Yeah, but like that in the US, Yeah,
I know, right Eon, and then Tesla by proxy, they've
drawn the ire of Americans who don't like what Dog
is doing, and the consequences are piling up in Some
of those consequences for Tesla owners in particular, could be
higher insurance rates. Yeah, it seems like all the currents
are currently against Tesla right now, and also Tesla owners,
(22:16):
you know, because it's not just the shure rooms, but
private owners are having their Tesla cars burned, painted the
faced and evs are already more expensive to ensure because
of the high cost of replacing the batteries. But if
your Tesla is also seen as a political symbol, there
is a higher likelihood of it being vandalized, which could
lead to an insurance claim. Insurance companies are likely to,
(22:37):
I mean, we'll see, I guess like they are likely
to raise premiums higher on Tesla owners, specifically to deal
with an increase in expensive claims. But as we've seen
with the way that insurance markets work. It's something that
has passed on to everyone at a certain point, and
it's one thing for Elon's actions to have personal financial
and business consequences. But it just sucks to see folks
(22:58):
who just went out there, you know, they bought a
Model three for environmental or economic reasons. Kind of they've
been forced into the public the political fray to a
certain extent.
Speaker 2 (23:08):
I think a lot of those like, they're like, I
didn't even I'm not trying to make a statement here, guys,
I just want an awesome car.
Speaker 1 (23:12):
Right exactly most people, and we've talked about the financial
realities of buying a Model three versus even something like
a Toyota Corolla, and the Toyota coroll used to be
the cheapest car in the United States essentially to own
and operate, and the Model three has kind of become that,
even though it's got a higher initial sticker price, and
so a lot of people are saying, oh cool, this
is going to lower my monthly costs. I'm not paying
paying for gas, and it's a good ride. I like
(23:35):
driving it. They are kind of fun to drive. They
just weren't assuming that it was going to draw political
eyeballs because of what's happening in Washington right now. Matt,
we should talk too, while we're on the car note
about tariffs. And we've talked about tariffs before on the show,
but now the President introduced twenty five percent tariffs against
imported cars into this country and this is supposed to
(23:57):
take effect to April third, and it's kind of hard
to no, I guess, in some ways, how to talk
about tariffs on the show, because there were tariffs that
came into being that got drawn back quickly, or that
were announced that we're pulled back before they've been implemented.
Speaker 2 (24:11):
And that sis made to certain companies or certain sectors.
Speaker 1 (24:14):
A lot of tariff whiplash going on because and that's
been really hard for businesses to figure out, well, how
do I what do I do when when tariffs are
being touted but then not necessarily brought to bear. And
some estimates are saying that price hikes on new cars
could be in the six to twelve thousand dollars range
(24:35):
if these tariffs come through. And as a friend of
the show, Kyla Scanlon put it, she put she said,
chaos is expensive, and I think we're bearing the fruit
of some of that political chaos. Political chaos, and how
much it's it could cost us. If these tariffs actually
do come through, we are going to see not just
higher prices on new vehicles, but second and third order
effects of those tariffs, which could which is going to
(24:58):
mean more people instead of going to the new vehicle,
they're going to the used market. Used card prices are
going to go up to and then even think about
folks working in the auto sector, we could see more
layoffs or furloughs of employees too in that space. So
we'll see. I don't know if these terrorists are actually
going to be implemented, but if they are, or if
they're just threats.
Speaker 2 (25:17):
Stuff to know. And I think it depends on which
side of the aisle you've fall into as to whether
or not you think that these are going to be
a good thing or not. But I don't know from
an economist state, and we've talked about this, right but
from most economists are like, no, this is going to
be pretty terrible for the economy. Prices will go up.
Speaker 1 (25:31):
Tariffs. Are economists on both sides of the aisle ten
to agree they're a terrible thing for consumers.
Speaker 2 (25:37):
Yeah, but one thing most politicians, though, are agreeing on
right now are rate caps on credit cards. Politicians on
both sides of the aisle, they tend to think that
curbing credit card interest rates to a maximum of ten
percent that will help their hurting constituents. But they are
wrong because while this sounds kind and nice, it's going
to be bad on so many levels. The unintended sequences.
(26:00):
The negative outcomes could be significant, including no credit card
access for folks who don't have high credit scores, leaving
others to lean on even worse lending products. CNBC reported
that ninety five percent of subprime borrowers wouldn't have access
to a credit card anymore.
Speaker 1 (26:18):
And somebody let that go. You know, yeah, they go
to paid loans, and they go to worse title loans. Yeah, like,
come on, they don't want that.
Speaker 2 (26:25):
Credit Card companies would likely increase other fees as well,
and so this is again something that would impact everybody. So,
you know, what sounds like kind of a nice thing
to do, would do real damage to the economy. So
I'm hoping that this effort at bipartisanship actually fails, because yes,
I am not a fan of a twenty five percent
credit card. I don't want you paying that, but a
(26:46):
ten percent rate cap could surprisingly to many. I think
it could actually be worse.
Speaker 1 (26:51):
And I think that's the thing that doesn't get discussed
enough to it is the downstream effects of a decision
like that because it is something that sounds nice coming
out of a politician's mouth. Yeah, Hey, I've got credit
card debt and I'm paying twenty three percent of visa MasterCard.
This sucks and it's going to take me forever to
pay off this debt.
Speaker 2 (27:07):
Because of that, everything has a tertiary effect or secondary effect,
Like there are things that was is the butterfly effect,
butterfly effect, I've never I've never watched that movie. But
when that all about like one small thing, like it
is a long time the beat of a butterfly race,
Like the difference in that and just the downstream effects
are significant. And I think if we're going to say
temper political scorekeeping that everyone is engaged in, like all
(27:27):
they want to do are they just want to get
the wins and here and now, and they're not at
all looking at our country or at the economy more holistically.
Speaker 1 (27:34):
If we're going to say ten percent, Why not five percent?
Why not two percent? Why not be even more generous?
I mean, if you cap interest rates at some point,
you you create other distortions in the economy. And think
about this too, Matt. There is actually more competition than
people might imagine in the credit card game, so they
can't just raise their interest rates as high as they want.
There are other credit card companies out the stuff. Think
(27:55):
of even credit unions, Like if you want a lower
APR on your credit card, a credit uni is often
the way to go. You might be able to get
an eleven or twelve percent rate, far below the average
market rate. Or think about balanced transfer cards. That's another
way that people can, you know, kind of ditch the
extremely high rate at least for a time, in an
effort to pay off their credit card more quickly without
paying interest. So there are a lot of options for consumers.
(28:17):
And ultimately, what we always say is like, don't use
credit cards right if you can't pay them off on
time and in full every month. But this, this political
proposal would yeah, it would ultimately be a pretty dismal
failure and it would have more impacts than these politicians realize.
By the way, Matt, while we're talking about credit cards.
Let's talk about gift cards for a second. I do
believe I am contractually obligated to throw shade at gift
(28:39):
cards at least twice a year.
Speaker 2 (28:40):
At least. Okay, I was gonna say, if you've already
hit your quota, then I.
Speaker 1 (28:44):
Already if it's the Nate, So I see it's not
even We're not even through the first I guarantee.
Speaker 2 (28:49):
We talked about gift cards earlier this year, you know,
like at the tail end of the holidays. That sounds
like something we would do.
Speaker 1 (28:54):
Well, I'll just quickly mention your favorite store, Joannes Fabrics
just went out of business, which is.
Speaker 2 (29:01):
So funny because I actually went to a Joanne. I
haven't been to one, and maybe ever I have never
been there, but I went there and bought some affordable
fabric to make those sound panels in the garage, oh acoustic.
Speaker 1 (29:12):
Yeah, that's where I got this. We didn't buy enough
because they're they're having financial troubles.
Speaker 2 (29:17):
I saw that going out of business line.
Speaker 1 (29:19):
Yes, well, all eight hundred locations have announced that they're
no longer accepting gift cards, even though they're still open
and they're doing going out of business sales, which, by
the way, those going out of business sales, they like
have the big signs about how much massive discounts stole liquidation.
They're usually not nearly as good as you think they're
going to be. But yeah, for anyone now with a
Joann's gift card, it's completely worthless.
Speaker 2 (29:40):
That's so crappy.
Speaker 1 (29:41):
It sucks. And this is why my advice typically is
with a gift card, only by it if there's a
discount attached. Yeah, but you think about it, man, if
you've got I don't know how much outstanding balance there
is on gift cards for Johanne's customers, but not a ton. Yeah,
but I hate I hate seeing this.
Speaker 2 (29:56):
Yeah, let's be honest. I probably would have shorted Joanns.
I wouldn't have gone along just given the I mean,
it kind of goes back to the food delivery. Who's
out there, who's willing to do the hard work of
creating something at home making their own Like people don't
even want to cook their own meal, let alone make
their own curtains or address or whatever. Although this guy
right here made his own acoustic panels for his garage
(30:17):
less eque. Oh before we wrap things up. A quick
shout out to Liam G for referring the how to
Money newsletter to some of his friends. Comes out every
Tuesday morning, and it's packed full with personal finance nuggets
of wisdom. Make sure to sign up over at how
to money dot com forward slash newsletter if you are
not already subscribed, and if you are, share it with
(30:39):
a friend like Liam did, I'll give you a give
you a nice little shout out. But buddy, that's going
to be it for this episode. Everyone have a fantastic weekend.
We'll see you back here on Monday, and until next time,
Best Friends Out, Best Friends Out. M four
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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