April 20, 2025 • 32 mins
Do you need a 12-month emergency fund now!? That might be over the top.
Ask HTM: How should one prepare for a layoff given the potential of a recession? And is it a bad idea to sell a home right now!?
We don't love that a recession is more likely, but we do like that frugality is trending!
Ask HTM: Does it make sense to take an early retirement offer from the federal government?
Ask HTM: How should one prepare for a layoff given the potential of a recession? And is it a bad idea to sell a home right now!?
We don't love that a recession is more likely, but we do like that frugality is trending!
Ask HTM: Does it make sense to take an early retirement offer from the federal government?
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Kf I Am six forty. You're listening to how to
Money on demand on the iHeartRadio app.
Speaker 2 (00:07):
All Joel and Matt want to do is help you save,
invest and enjoy more of what matters. This is how
to Money with Joel lars Guard and Matt Altmix.
Speaker 3 (00:47):
Kf I AM six forty live everywhere on the iHeartRadio app.
Speaker 4 (00:51):
This is how Some Money. I am Matt Alt Mixed.
Speaker 1 (00:53):
And I am Joel Larsgard and we're glad to have
you along for the show today. By the way, if
you're looking for the write credit card for your wallet,
well you want to be able to use it responsibly.
But if you do that, if you pay your credit
card on time and in full every single month, well
check out our credit card tool. You can find that
up on the website at howtomoney dot com. This is,
(01:14):
of course, time for the ludicrous headline of the week.
This one comes from MarketWatch. The headline reads, experts now
recommend a twelve month emergency fund and I hate to
do this, Matt. I don't want to throw a well
intentioned person under the bus.
Speaker 4 (01:29):
Here. You're gonna throw me under the bus. I like
twelve month emergency funds.
Speaker 1 (01:33):
I'm not. I just think, Okay, so this was a
specific recommendation of a former guest or meet Safety, and
we've had him on before. We like remeet, but he's
been making the rounds. He's now telling folks that the
twelve months is the emergency fund.
Speaker 4 (01:46):
They need now.
Speaker 1 (01:47):
And I think there's a difference map versus telling people, Hey,
if you really want to save up to twelve months,
more power to you, go for it.
Speaker 4 (01:54):
Yeah.
Speaker 1 (01:54):
I get the impulse to tell people to save more.
I like savings too, and I have a larger than
six month emergency fund personally, But I think also this
is moving the goalposts on people. When you've told people
for so long, hey, you need three to six months
worth of savings, which, by the way, most people don't
have any work close to that. I'm sorry, but changing
(02:15):
the metrics and then telling everyone to quickly amass six
or nine months were more worth of expenses. It sounds
like a panic reaction to me. And so I get
the destabilizing effects of tariffs, the higher potential for a recession,
and really you know, the stomach churning nature of bigger
market drops that we've seen, but either three to six
(02:36):
months of emergency money. Either it's enough or it isn't.
And I don't think that changes. Like, we know, the
whole reason of an emergency fund is to save four
potential tough times. Just because things have gotten a little
more squarely doesn't mean we need to change the prescription.
Speaker 4 (02:51):
I think for potential times.
Speaker 3 (02:53):
Pas all right, I might disagree with you just a
little bit here. I might kind of side with remeat
because when things change, when like the facts on the
round change, I think it's worth considering how much money
you've got in cash, set asiding set aside as savings
and so like. For someone who's got three months, you know,
I think this might be a call to say, all right, hey,
maybe I should have like closer to forty five or six.
(03:13):
Or if you're somebody that has like nine, you're saying
forty five for twenty five months is a bit extreme,
the full stop, I'll put that out there. But I
certainly hate what seems like fear mongering though, Like, and
that's the part that kind of drives me crazy, is
that if it is like a knee jerk reaction to
the headlines and it's just like, oh man, you need
(03:34):
to be doing this, then certainly, I don't.
Speaker 4 (03:35):
I don't like that.
Speaker 3 (03:36):
But if you are someone who believes that, and maybe
you're somebody your financial situation isn't super stable, maybe you're
if you're a one income household, if you're somebody who
works for a company that's looking to downsize significantly, I
would have.
Speaker 1 (03:50):
Said you should have already been towards that six month
range and not the three.
Speaker 4 (03:53):
Yeah.
Speaker 3 (03:53):
Yeah, absolutely, But then beyond that, given the sortain uncertainty
that we've seen in the destabilization of our economy and
certain specific industries as well, I think it's if you
think that there are big changes coming, well, I think
it would not just be worth considering that advice, but
I think it would be wise and even prudent to
sort of follow your gut to what you, as an
(04:14):
individual feel comfortable with, because I just don't want there
to be like a blanket prescription of like, no, you shouldn't,
you shouldn't be doing that, because when you know, folks
batten down the hatches when they see a storm coming,
and I think that this could.
Speaker 4 (04:25):
Be a way for folks to do that.
Speaker 3 (04:27):
I don't like that personal finance in this way feels
like it's getting slightly political because a lot of times
you see the different headlines and it seems like it's
just a reaction to different publications that are trying to,
you know, stir up a whole lot.
Speaker 4 (04:39):
Of clicks and eyeballs. Basically. Yeah.
Speaker 1 (04:42):
So, I guess you, as an individual can determine how
big your emergency fund should be and whether you should
be more worried right now increasing your savings. And I
think you make a good point, Matt. I think it
can make sense to reassess how much you have in
savings and how vulnerable you are to changes right now.
But I guess just a blanket prescription to change how
(05:03):
much you have in savings feels like a little too
much to me. And I think a lot of people
that the emergency fund they built up is likely sufficient
for most cases. And the truth is, too we can't
prepare for everything. We cannot be fully prepared for everything,
and so it might mean missing out on some of
the investments that you would have made and some of
(05:23):
the tax advantaged accounts you would have stuck money into.
If you were to say, oh, wait, twelve months is
now the standard. Guess I got to get their asap,
and that could create other problems in your financial life too.
Speaker 4 (05:36):
That's true. All right, We've got more to get to
On today's show.
Speaker 5 (05:40):
You're listening to how To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (05:47):
Don't forget to sign up for the how to Money
newsletter over at how tomoney dot com slash newsletter. Let's
keep moving though, Jessica asks, if I'm worried about a
layoff my husband works for the VA, is there a
way to look into what unemployment benefits we would qualify for.
I'm a planner, and yes, I like to plan for
the what ifs before they happen. Is unemployment stay by state?
We have emergency savings? Does that factor into how much
(06:09):
unemployment you qualify for? Also, I'd love an example copy
of a bare bones budget for a family of four,
for instance, how can you realistically go I'm sorry, how
low can you realistically go?
Speaker 4 (06:22):
On food? Oh? Yeah, that's good.
Speaker 1 (06:23):
I want you specifically to address the food question in
a second map because I feel like that's something you
Entertainment have been attentive to. That's the TLDR, but even
the challenge that you guys instituted for yourself a few
years back, which you've talked about on the show.
Speaker 4 (06:36):
We'll give that in just a second, but you might
have to remind me. But move on, okay or KEI.
Speaker 1 (06:40):
Move So let's specifically talk about the layoff fears first.
That was Jessica's first question. I get that insecurity. You know,
government workers, they used to have some of the most
secure positions around. That's no longer the case. If I
were in your shoes, Jessica, I'd be hoping for the best,
but I'd at least be planning for the worst, planning
for a potential job loss. Yeah, that means some things
(07:01):
for your finances, but it also means networking right and
looking for other work just in case, because you want
to be prepared and you want to have kind of
irons in the fire going because you're not sure kind
of where things are headed.
Speaker 4 (07:15):
Yeah.
Speaker 1 (07:15):
And then when it comes to unemployment benefits, yes, it
is a state by state thing. And no, your emergency
fund has no impact on how much money you receive
from those unemployment benefits.
Speaker 3 (07:26):
Yes, not like family assets and FASCA and them playing
for com Not like wait a second, she's you've got
plenty of.
Speaker 4 (07:32):
Moneys is loaded.
Speaker 1 (07:33):
We're not going to give you any of those unemployment benefits.
That's not how it works exactly.
Speaker 3 (07:36):
That's something that you are paying into. You will receive
those benefits, and each date has its own the employer
pays into it.
Speaker 4 (07:42):
Yeah, yeah, exactly.
Speaker 3 (07:43):
The formula is based usually on a percentage of your
recent wages, with a fairly low cap. In our state,
I believe the weekly max is something like three hundred
and sixty.
Speaker 4 (07:51):
Five dollars, and it goes a lot lower than that
if you make less too.
Speaker 3 (07:54):
Yeah, my guess is that your husband actually makes more
than that at the VA. So, but also know how
long those benefits might last, and so we're typically talking
anywhere between three and six months. So your liquid savings,
your emergency fund is going to be crucial, even though
unemployment benefits are certainly going to be helpful. And then
(08:14):
when we're talking about the bare bones budget, Jill, you're saying,
what challenge are you talking about as.
Speaker 1 (08:18):
Far as you We're trying to do two dollars per
person per meal for many years.
Speaker 3 (08:24):
Oh and you were able to achieve that well back
in the day. We're doing one dollar per meal per person. Yeah,
that's one.
Speaker 1 (08:29):
Dollar dude, you're making me think of the commercials to
support families in.
Speaker 4 (08:34):
Countries that are economically challenged.
Speaker 2 (08:36):
Man.
Speaker 3 (08:36):
Granted, this is when the kids were really little, so
it's not like they're eating a ton. Things are different
now as they've gotten bigger. I mean literally, man, it's
crazy how I don't want to get all sentimental, but
because they grow fast, yeah, they eat a lot of food.
And when it comes to your grocery budget specifically, it
comes down to how dialed in your current grocery spending is.
(08:57):
Because let's say you're a baller like Joel, and you
get your groceries delivered from Whole Foods, and then everything
else lies.
Speaker 4 (09:05):
Well, you don't do Whole Foods, but you've done that.
Speaker 1 (09:07):
I've been getting the little costs I've talked about, the
discount and Insta car gift cards.
Speaker 3 (09:12):
But and then let's say all the rest of your
groceries you buy at the local farmers market on Saturday mornings,
and it's super fresh and organic, and you can't get
any groceries that are any more extensive than that, because
that's kind of like as expensive as they get there, Well,
you're gonna be able to I mean, oh, my gosh,
you just by going to limit, Yes, I mean, you
could cut back in such a significant way if that's
(09:34):
what you're used to. However, if you already got your
groceries dialed in, let's say you are, you've been an
Aldi shopper, you are very intentional about your spending there, man,
it's really difficult to cut back on your spending, specifically
on groceries. So that's what I mean. I think that's
one that can vary pretty wildly. But I will say
(09:54):
the way our family is implemented a bear bones budget
is all other discretionary spending I've essentially slashed by two thirds,
and so it's literally hit with a multiplier jol of
zero point three to three. Because what I know is
that even if things aren't doing, like aren't so great
for our family, we're still going to want to celebrate Christmas, Like,
We're still going to go on vacation. Kate and I
(10:15):
are still going to want to go on date nights.
They're just not going to be as nice. Yeah, the
presents are going to be quite as big, the vacation
is not going to be quite as long or exotic, perhaps,
but there are still certain aspects the kids' activities. They
may not be doing quite as many of them, but
there are still certain things that like the reason they're
on our budget currently is because we've prioritized them.
Speaker 4 (10:35):
But we're just going to have to find a.
Speaker 3 (10:36):
Way to prioritize them to a lesser extent, not necessarily
eliminate them completely, though I know if a push comes
to shove that that's something that we can do. So
that's how we approach the barre bones budget. It's tougher
when it comes to groceries because there's sort of a
floor as to what it is that you can get
by on. But sure all other dis same thing with
your housing like housing, transportation and food. Man, those are
(10:59):
really tough to to make adjustments on, hard to turn
on a time like you can plan to change those,
but it's really hard to be like I'm going to
sell a car tomorrow because of a lot of life
life upeople.
Speaker 1 (11:09):
Yeah, you might be able to do you might not. Also,
I would say one of the biggest food line items
in people's budget is and sometimes they don't think about
it like this, but it's eating out craft Okay, you
keep the craft beer budget and then you cut eating
you can't elimit.
Speaker 4 (11:25):
Take that.
Speaker 1 (11:25):
That's your craft beer equivalent, of course, but it's eating out,
and people under assume how much they spend eating out
at restaurants, and when you when you look at the
data over the past five plus years, the amount of
money we spend eating out versust grocery stores, it's increased
significantly as a culture. And so that's the biggest thing
I think to combat is some of the eating out. Yeah,
(11:46):
you might be able to save a little bit more
by switching if you don't shop at all to yet
going there, you could probably you know, cut some of
the more expensive items from your grocery list. The same
things are going to be smaller there than they're going
to be, don't.
Speaker 3 (11:58):
You underestimate all I've been going from Kroger, which is
like an affordable grocery store, even going from Cross I
mean this, I've got the records, I got the receipts.
Man literally going back, you know, decade, not decades, but
years and years and years. Switch it from Kroger to
all these straight up getting item for item, we cut
our grocery budget by thirty percent. I totally three percent overnight.
Speaker 1 (12:17):
I totally believe I couldn't believe it, So I do
think that's an important tip. But I also just want
to highlight that there are other ways that people are
not really thinking that they're spending money or they're spending thoughtlessly,
especially eating out. It's just something that and the average
meal eating out costs four times with the meal at
home costs.
Speaker 4 (12:31):
So remember that.
Speaker 1 (12:32):
And if you want to get I think inspired to
make cheaper meals that are still tasty at home, check
out our friend Frankie Celenza.
Speaker 4 (12:41):
He used to struggle meals.
Speaker 1 (12:43):
He came on episode eight forty six to talk about
that and he's like, all about making good food that's
good for you for not much money at all, which
I love. So yeah, definitely check out that episode and
hopefully that'll be inspirational.
Speaker 4 (12:58):
If you really do want to cut that grocery budget totally.
Speaker 3 (13:01):
And he was into mountain biking, which is something of
that I remember staying there that. Yeah, I feel like
I like it even more. All right, let's get move in.
Pascal asks, is this a ridiculous time to put my
house up for sale and move?
Speaker 4 (13:12):
Oh? What do you think, y'all?
Speaker 3 (13:13):
I'm reading into the question and what I'm going to say,
is that if if you're looking to move to a
different country again going to like, hmm, I'm kind of
going back to the whole emotional response, the guitar answer
that we gave earlier. If you feel like that the worst,
like that the future of the US isn't bright, I
don't know that Like that feels more like a like
a knee jerk sort of reactionary response as opposed to
(13:35):
maybe you're moving for another job, opportunity to get be
closer to family. Maybe you're moving because you need you're downsizing,
or you're upsizing. Maybe your family's growing and you need
a bigger house.
Speaker 4 (13:45):
See that was my these are all good reasons yes
to move.
Speaker 1 (13:47):
That was my assumption in the question was that Pascal
was asking based on, Hey, is it just a terrible
time to list my house because of what's going on
with the market, And my answer to that is.
Speaker 4 (13:56):
Actually no, not really.
Speaker 1 (13:58):
I think if you're right, though, Matt, if you're like
I'm thinking about moving to a completely different country because
I'm worried about the future of the United States, I
would say that's probably overblown. Like yet, there's a lot
of folks out there who who feel that I don't
harbor the same fears, but I will say it's not
that the housing market is immune from trade policy changes.
It's just that other factors influence your decision whether or
(14:20):
not to move a whole lot. More like, I'd love
to know how long you've owned the home while you're moving.
Are you moving to a lower cost of living location.
Are you hoping to rent for a while after you
sell this house. That would be helpful information to have. Ultimately, No,
it's not a ridiculous time to sell your home. Home
prices are high, even though mortgage rates remain steep, and
so you got to make sure you price the home
(14:41):
right and you market it well because homes are staying
on the market longer these days. But you can still
do quite well as a seller in this market, especially
when you think about where home prices were a few
years ago. Matt, think about Pascal, if even if he's
only on the home for four or five years, just
the appreciation on the home in that amount of time
could be significant.
Speaker 3 (15:01):
If you have flexibility though as to when you might
list this house.
Speaker 4 (15:05):
If it was me.
Speaker 3 (15:06):
Personally, Because of the uncertainty in the market, I think
a lot. I mean countries. There are entire countries that
are hitting the pause button on certain things. There are
certain industries that are like, Yep, we're just kinda we're
gonna ride this thing out and see where things land.
Because of that, we're seeing employers and it's all trickling
down to consumers. The level of uncertainty is leading folks
to not want to take risks, which means that you,
(15:29):
I think that you may not be able to get
the most for your house where you to sell it
like right now, as opposed to letting things shake out
and see where things land in thirty to ninety days.
Perhaps if it was me, that's that's what I would do.
Speaker 1 (15:43):
Yeah, but you just still have to remember, like where
what was the home valued at a few years ago?
And are you going to do pretty good? And if
it's time to go, is it time to go? If
you have flexibility though, Matt, yeah, Pascal might be able
to do better by waiting to sell, but also it's
bring selling time and as well, you could do a
whole lot worse than selling right now.
Speaker 3 (16:03):
Yeah, what if tears lead to sky high prices, inflation
starts going up and the Fed's like, oh guess what
we're not going to do at all this year.
Speaker 4 (16:09):
Yeah. You know, we talked about those two rate cuts. Yeah,
not happening.
Speaker 3 (16:13):
That's not going to be great for the market and
mortgage and financing costs.
Speaker 4 (16:17):
Yeah.
Speaker 1 (16:17):
But then again, if the cost of building those homes
goes up. Yeah, there's like so many not on effects
that are hard to.
Speaker 3 (16:23):
Put any different effects that it's truly hard to take
them all into account. So you got to do it
for personal reasons. Then people buying sell the homes all
the time because they were at the stage of life
where they needed to do that, No doubt. We got
more money saving information to get to.
Speaker 5 (16:38):
You're listening to how to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (16:44):
If you have a money question, we'll send it our way.
All you have to do is record your question on
the voice memo app there on your phone and send
it over via email. You can find the simple instructions
at how toomoney dot com. Forward slash ask the word recession.
We've heard that being tossed around a whole lot more
right now. Understandably, we actually covered recessions in our latest newsletter,
(17:04):
Plug for.
Speaker 4 (17:05):
The HOA Money newsletter.
Speaker 3 (17:06):
Go sign up if you're not hodamoney dot com forward
slash newsletter. Well, Joel, In times of greater uncertainty, frugality
starts to become cool again, ways to save more. They're
starting to trend in ways that they didn't when the
economy was firing on all cylinders. And that's where recession
hair comes in. This appears to be one of those
uh wor ladies. They're waiting longer between salam visits. They're
(17:29):
letting their roots show more power to you, ladies. I'm
all about that, letting their hair grow long and going
back to the natural color. I think the male equivalent
is certainly what I did during the pandemic, letting the hair.
Speaker 4 (17:41):
Go really long or cutting it yourself.
Speaker 3 (17:43):
We should post a picture of that for people you
had to grow really long, I look significantly older. That
was like double hair, man. It was pretty crazy. Yeah,
you know, And I did the math. Because this kind
of behavior compounded over time, Joel, it makes a big
difference cutting. So the averag the average dude's haircut is
thirty bucks and typically depends on who you are, but
(18:05):
most guys go to the barber anywhere between three and
six weeks, So I figured, all right, thirty bucks. Let's
say every month you do that for thirty years, which
is how long I've been cutting own hair. Now you're
looking at over forty thousand dollars man, compounded in the market.
Speaker 4 (18:19):
Isn't that not insane?
Speaker 3 (18:21):
Just by this one little thing that I do myself
well and a set of hair clippers once a month,
hus what thirty bucks?
Speaker 1 (18:27):
And with the additional because you have some additional links
that you have for the top of your hair so
you don't have to use scissors on it, because that's
where things get a little.
Speaker 4 (18:36):
Score at the US and scissors where it gets a
little dice. Yeah.
Speaker 1 (18:38):
And I know for women it's different, I know, and
everyone has their different kind of fashion standard, but they want.
Speaker 4 (18:44):
To present their craft beer equivalent.
Speaker 1 (18:46):
But I kind of like when people lean into the
stuff and they make it cool to be frugal, because
I think it just gives people the hall pass to say, okay, cool, Yeah,
I'm gonna jump in on that I'm not doing this,
And it's similar to it's like wearing that frugal that
frugal change as a as a badge of honor instead
of being feeling like ashamed about it or feeling like
that cost cutting endeavor is somehow badly reflected on you
(19:09):
for the whole world. That's right, yeah, exactly, well, and
then say some other ways, we could say Matt is
not buying cutting edge technology.
Speaker 4 (19:16):
Right. Well, I didn't realize this was a thing. I
just saw that this week. Eight K TVs. Did you
know that was? These are? Like, yeah, they are like
the super fancy ones.
Speaker 1 (19:24):
Somehow, I didn't know that the resolution on TV screens
had gotten twice as good.
Speaker 3 (19:29):
I guess like the newest iPhones, or maybe it's just
as good, but that makes sense, like if you're looking
at an iPhone because it's a foot from your face
or whatever, but a TV is supposed to be far away,
Like can you even tell the difference?
Speaker 1 (19:40):
That's a good question, and it seems like you can't.
So the tech nerds that's seen that they wrote about
this in particular, and they said actually that you shouldn't
buy one of these because they're too expensive. And if
anybody is going to tell you to buy a new
fancy TV, it's the people have seen it because they're
super into electronics, it's true, and they want to tell
you how awesome it is and why it's worth the
more sense of price tag. But take was that the
(20:01):
older O lead technology does almost as much at a
fraction of the price. And on top of that, what
I would say is, if history is any indication, ak
TVs are going to get better and cheaper in a
matter of years, if not months, So you know, waiting
until price drops happen and technology improves is wise. You
don't want to be the early adopter of the new
(20:22):
technology that's overly priced. It's similar to basically every other
thing in the technology realm. The advances just aren't as
groundbreaking as they've been in the past. When you go
from from you know, seven twenty to four K, man,
that's a big jump. When you go from four K
to eight K or probably sixteen K in a couple
of years or something like that, Like, you're just not
going to notice as much of a difference.
Speaker 4 (20:42):
Now, that's true, Let's keep the frugal live and train
go angel.
Speaker 3 (20:45):
Another way that some companies out there are trying to
cater to price conscious consumers is to offer guaranteed pricing
for longer periods of time in order to combat this
uncertainty that everyone is experiencing.
Speaker 4 (20:57):
Which sounds nice, But here's the thing.
Speaker 3 (20:59):
Yeah, actually don't need it, and you'd be overpaying in
most cases if you opted for it. So Verizon in particular,
they're offering this guaranteed three year price lock in basically
for streaming customers. T Mobile is doing something very similar with.
Speaker 4 (21:15):
Their wireless service.
Speaker 3 (21:17):
But first of all, their prices are higher than our
favorite mv and os on the note of T Mobile here,
so our favorite mobile virtual network operator carriers like Mint
and US.
Speaker 4 (21:28):
Mobile are right out of the gate more affordable. Yeah.
Speaker 3 (21:31):
But then secondly, phone bills have been going down in
recent years, and so a price lock is actually the opposite.
Speaker 4 (21:37):
Of what you want.
Speaker 3 (21:38):
You want to be able to shop around as the
competition has increased, and as a competition has increased, prices
they have dropped, and we want you to take advantage
of those dropping prices.
Speaker 1 (21:50):
Someone would benefit, a company would benefit from you price
locking when they charge more and when that thing is
actually experiencing deflation, which is what's happening in the cell
phone space.
Speaker 3 (21:59):
What they're doing is they're looking to provide stability for
themselves as a company as opposed to you.
Speaker 1 (22:04):
It's what sounds what sounds beneficial yeah to you, is
ultimately beneficial for them, So yeah, don't. When you see
those price locks, you might think what a great company.
This is so sweet, I can't wait to take advantage
of that. But actually the opposite might be true. So
dig one level deeper. And it's no secret to Matt
that that concert prices have soared in recent years. That's
partly because of Ticketmaster's monopoly boo, but demand. It's also
(22:27):
up as people prioritize those in real life experiences like
live shows. Yep, so going to a concert, it's amazing.
I think people assumed in the age of the internet
and like, I can literally stream shows for my favorite
artists online, but that only gets to be more excited
to go see the show in person, and I think
that's kind of what most people are feeling well now.
(22:47):
And of course, of course you can pay for those
concert tickets in installments instead of paying for all up front.
There have been a few articles written about Coachella payment plans.
Coachella is like two weekends, happened this past weekend and
this coming weekend. Well, the La Times called the Coachella
payment plan financially smart to pay for your six hundred
dollars Coachella ticket over the course of many months.
Speaker 4 (23:10):
A lot of booing during the segment.
Speaker 1 (23:11):
Of course, we think that is trash advice. La Times,
get your game up. You pay an extra forty one
dollars for the privilege of paying for those tickets over time.
And I get that six hundred bucks is a lot
to pay. It's a lot of money for a weekend
festival to go see your favorite bands. Still, we think,
and this might sound incredibly old school Matte, maybe we're
(23:33):
like trad dads for suggesting that you have the cash
to pay for the thing you want to do upfront. Man,
like okay, Boomer, But that's truly the advice that we
have for you, and it's just tried and true. It
makes sense. Yeah, you should skip Coachella. You should skip
the concert you want to go to and save up
for next year's version if you don't have the money
to pay for it.
Speaker 3 (23:53):
Yeah, it's to the La Times defense or to the
specific writer he did say, if it's in your.
Speaker 4 (23:58):
Budget, is on your budget to pay for one?
Speaker 3 (24:01):
It kind of depends on what your definition of what's
in your budget, right, Because in a similar way, we'll say, well,
if you have the cash on hand, if it's in
your budget, then sure, put that expensive charge on your
credit card. But even beyond that, it's the buy now,
pay later, the installment buying method, even if they're not
charging you right because a lot of them they don't
charge interest, A lot of them actually do, or they
(24:22):
have options where you are paying interest. But what I
think I've realized about the buy now, pay later, where
you're paying it in installments, is that it in fact
makes you an installment buyer. And it's a slippery slope
before you're carrying a balance on your credit card because oh, well,
that's also an installment. And then boom, what has magically
happened right in front of our eyes here that you
haven't even realized?
Speaker 4 (24:42):
You're living paycheck to paycheck?
Speaker 3 (24:43):
Like that's what that does when you get on this,
when all of your expenses are essentially being automated without
you even thinking about it. Like that's like the very addition,
very definition of living paycheck to paycheck. And I think
that's what I'm realizing that I dislike about the buy now,
pay later, is the habit for a that is taking place.
Speaker 4 (25:01):
Yeah, I couldn't agree more.
Speaker 5 (25:02):
You're listening to how to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (25:08):
By the way, you can always find more money saving
information over at howtomoney dot com. Let's keep moving, We've
got listener questions to answer. This one is from Alex
who wrote how to Determine whether it's worthwhile to take
any early retirement offer. I know folks who are working
for the federal government and are like five to nine
years away from retirement, but some of them have been
(25:30):
receiving offers to retire early and still get their pension benefits.
Joel kind of sounds like a scenario where folks are
getting to have their cake and eat it too.
Speaker 1 (25:39):
Potentially right, Potentially depends on the individual for sure. I
mean I like this, especially for people who are financially
independence minded, like they've been working towards that. It's kind
of like arranging your own layoff. It's one of those
things that doesn't it doesn't come around for everybody, some
sort of early retirement offer. And we talked about something
akin to that with Sam Dogan back in the day,
(26:01):
the dude who runs the website Financial Samurai, And it
can be a brilliant move if calculated correctly. And he
was just talking about when layoffs are happening at the workplace,
if you kind of volunteer and you get a sweet
severance package to walk away. I think he got like
two years worth of pay or something like that, something
in most people don't get that much. Nope, it's like
six months at the max. But that can be if
(26:22):
you are in a good financial position, like something that
only increases and benefits your financial standing while allowing you
more flexibility. But so much depends right on your likely
job stability, your overall financial situation. Because if you've got
a big chunk of savings you've been investing for years, well,
you can totally use an early retirement offer to allow
you to vacate your position earlier than you thought you
(26:43):
might be able to. But if not, like, if you're
in more tenuous financial circumstances, you have to be really
careful before taking an early retirement offer because you might
find that you don't have gainful employment lined up sure,
and you're in a much worse financial position. Yeah, but
taking alex he or she wrote this early retirement So like,
(27:03):
if if we're taking a retirement in the traditional sense
of the word, and you are going to be totally set.
This totally changes this conversation from a financial conversation to
a life fulfillment conversation. Right Like this is on Maslow's
hierarchy of needs.
Speaker 3 (27:18):
Where you've just graduated to the next level and we're
talking about you know, these are more like self actualization
needs as opposed to do I have enough money to
pay the bills? Do I have enough money to be
able to afford some of the more you know, some
of the luxuries in life, some of the things that
I want to do, And so much of that comes
down to how it is you want to spend your time.
And so I think that's if you are closer closer
(27:39):
to retirement, I think you might be more in that camp,
which leads to less number crunching and more uh self searching, Yeah,
soul searching and writing and you know, like journaling and
trying to figure out like what do I want my
days to look like? And if that's the case, Alex,
I would highly recommend for you to literally do something
like that, like go on a silent retreat, spend some
time just completely away from what it is that you
(28:02):
are doing. In the day to day to shake things up,
to help you to maybe almost stumble upon whatever it
is that you might want to spend the next decade
or two do it.
Speaker 1 (28:10):
Yeah, I mean, I love the idea for lots of people.
If this means, hey, I wasn't. I was still planning
on working to get that pension because that was a
huge part of kind of my retirement income plan. But
because that comes along with the early this early retirement offer,
why don't I just ride off into the sunset now
I'm fully financially prepared. If that's the case and you
(28:31):
have other things you'd rather be doing with your life,
kind of like you're talking about, Matt, I think it's great.
I think this can be the perfect accelerator to get
going in retirement earlier than you had planned, maybe enjoy
some more of those early retirement years that you were
going to be working instead. So yeah, I think that's
I think that's great advice. All right, let's get to
a question from Pam. She says, I'm a middle aged
(28:52):
investor in forty six. I'm looking for advice on how
to help protect what I've already saved while still remaining
agile and aggressive. I recently trace my income after years
of struggling to save money, so I will be actively
trying to catch up on my retirement over the next
ten plus years. I'd love to hear how this market
will help or hinder my ability to catch up on saving.
Speaker 4 (29:11):
Yeah. Wait to go, Pam on increasing your income. It totally.
I'm sure it feels good.
Speaker 3 (29:16):
She said that she was struggling when it came to
being able to save and invest, which means that she's
actually able to do it now because she's got more
money flowing in. It's going to allow her to ramp
up these contributions, and in her words, she's looking to
protect what she's saved while being aggressive as well. And
I think there's only one way to do that, and
that is to invest like an optimist and then save
(29:36):
like a pessimist. So keeping your savings such Morgan Houseold quotes, Yeah, yeah, yeah,
I did not coin that phrase. Those savings, those dollars,
the money that you've got there in the emergency fund
needs to be secure and liquid in a high heeled
savings where you have enough on hand to give you
that peace of mind, you know, given to meaningful financial
(29:56):
downturn and then just keep investing in low cost index
as well, like clockwork, and the goal is to have
enough cash so that you don't have to ever touch
those investments at an inopportune time, like right now. That's
something you want to avoid at all costs. And right now, specifically,
given the fact that you're talking about having not made
(30:16):
a whole lot of progress perhaps up until now, just
realize that some of this volatility that you're seeing it
doesn't really impact you nearly as much. This is something
that when you've been saving and investing for decades and
decades and you've built up a fat, you know, nice
sized nest egg, that's when this volatility can really take
a bite out of your overall network. The number can
(30:38):
change quite a bit. Yeah, And obviously, let's say you've
been investing for a few years, it still sucks to
see your investments go down by a three grand. It's
different though, when it's thirty grand or one hundred grand
or one point fifty. And that's the kind of swing
that some folks out there who have been investing for
twenty thirty years, that's what they're experiencing right now.
Speaker 1 (30:57):
I will say, I do think no matter to the
size of the drop. The people who have more cash
on hand, who feel comfortable that they can cover bills
if something unexpected does happen to their job or to
whatever like, if they feel more financially prepared from a
liquid cash standpoint, My guess is they don't feel the
loop de loop in their stomach when they look at
(31:18):
their retirement account balance nearly as much. Whether the storm exactly,
it's much easier to weather the storm. That's why that Hey,
if I've got the cash on hand and savings to
back me up, and I'm still doing the investing thing
like clockwork, well then you don't have to. That should
reduce worries significantly. And as we said before, right dollar
costs averaging into those tax advantage accounts, that's where it's at.
Do that through thick and through thin, and then you know,
(31:41):
once you resee age at fifty PAM you're a few
years away, you'll have the ability to contribute even more
to those accounts. And as those contributions limits rise, you
so you're making trying to catch up on retirement account contributions, Well,
guess what, at fifty you get to contribute more, which
is pretty cool.
Speaker 4 (31:56):
One thousand bucks.
Speaker 1 (31:57):
Yeah, so into the iras and then even more into
like four to one case four or three b's. And
so if you're getting to the point where you're maxing
any of these accounts, just note that in a few
short years you're gonna be able to funnel even more
into those accounts, which is which is awesome, super sweet
and yeah, and that kind of goes to the volatility
sort of point I was making her. Save your savings rate, Pam,
the amount that you're able to set aside right now
(32:19):
into those accounts actively as opposed to seeing the returns
on that money. That is going to have the biggest
impact on your retirements. That's so underrated, is there super
savings rate? People don't talk about it enough. The more
the higher your savings rate, the more the less you
have to worry essentially about the machinations of the market.
Speaker 3 (32:35):
Totally agree, buddy, And that is going to do it
for today. Thank you for listening. We appreciate your time
and attention. We'll see you back here next week.
Speaker 1 (32:43):
You've been listening to How to Money with Joel Larsgard.
You can always hear us live on KFI AM six
forty twelve pm to two pm on Sunday and anytime
on demand on the iHeartRadio app.
Kf I Am six forty. You're listening to how to
Money on demand on the iHeartRadio app.
Speaker 2 (00:07):
All Joel and Matt want to do is help you save,
invest and enjoy more of what matters. This is how
to Money with Joel lars Guard and Matt Altmix.
Speaker 3 (00:47):
Kf I AM six forty live everywhere on the iHeartRadio app.
Speaker 4 (00:51):
This is how Some Money. I am Matt Alt Mixed.
Speaker 1 (00:53):
And I am Joel Larsgard and we're glad to have
you along for the show today. By the way, if
you're looking for the write credit card for your wallet,
well you want to be able to use it responsibly.
But if you do that, if you pay your credit
card on time and in full every single month, well
check out our credit card tool. You can find that
up on the website at howtomoney dot com. This is,
(01:14):
of course, time for the ludicrous headline of the week.
This one comes from MarketWatch. The headline reads, experts now
recommend a twelve month emergency fund and I hate to
do this, Matt. I don't want to throw a well
intentioned person under the bus.
Speaker 4 (01:29):
Here. You're gonna throw me under the bus. I like
twelve month emergency funds.
Speaker 1 (01:33):
I'm not. I just think, Okay, so this was a
specific recommendation of a former guest or meet Safety, and
we've had him on before. We like remeet, but he's
been making the rounds. He's now telling folks that the
twelve months is the emergency fund.
Speaker 4 (01:46):
They need now.
Speaker 1 (01:47):
And I think there's a difference map versus telling people, Hey,
if you really want to save up to twelve months,
more power to you, go for it.
Speaker 4 (01:54):
Yeah.
Speaker 1 (01:54):
I get the impulse to tell people to save more.
I like savings too, and I have a larger than
six month emergency fund personally, But I think also this
is moving the goalposts on people. When you've told people
for so long, hey, you need three to six months
worth of savings, which, by the way, most people don't
have any work close to that. I'm sorry, but changing
(02:15):
the metrics and then telling everyone to quickly amass six
or nine months were more worth of expenses. It sounds
like a panic reaction to me. And so I get
the destabilizing effects of tariffs, the higher potential for a recession,
and really you know, the stomach churning nature of bigger
market drops that we've seen, but either three to six
(02:36):
months of emergency money. Either it's enough or it isn't.
And I don't think that changes. Like, we know, the
whole reason of an emergency fund is to save four
potential tough times. Just because things have gotten a little
more squarely doesn't mean we need to change the prescription.
Speaker 4 (02:51):
I think for potential times.
Speaker 3 (02:53):
Pas all right, I might disagree with you just a
little bit here. I might kind of side with remeat
because when things change, when like the facts on the
round change, I think it's worth considering how much money
you've got in cash, set asiding set aside as savings
and so like. For someone who's got three months, you know,
I think this might be a call to say, all right, hey,
maybe I should have like closer to forty five or six.
(03:13):
Or if you're somebody that has like nine, you're saying
forty five for twenty five months is a bit extreme,
the full stop, I'll put that out there. But I
certainly hate what seems like fear mongering though, Like, and
that's the part that kind of drives me crazy, is
that if it is like a knee jerk reaction to
the headlines and it's just like, oh man, you need
(03:34):
to be doing this, then certainly, I don't.
Speaker 4 (03:35):
I don't like that.
Speaker 3 (03:36):
But if you are someone who believes that, and maybe
you're somebody your financial situation isn't super stable, maybe you're
if you're a one income household, if you're somebody who
works for a company that's looking to downsize significantly, I
would have.
Speaker 1 (03:50):
Said you should have already been towards that six month
range and not the three.
Speaker 4 (03:53):
Yeah.
Speaker 3 (03:53):
Yeah, absolutely, But then beyond that, given the sortain uncertainty
that we've seen in the destabilization of our economy and
certain specific industries as well, I think it's if you
think that there are big changes coming, well, I think
it would not just be worth considering that advice, but
I think it would be wise and even prudent to
sort of follow your gut to what you, as an
(04:14):
individual feel comfortable with, because I just don't want there
to be like a blanket prescription of like, no, you shouldn't,
you shouldn't be doing that, because when you know, folks
batten down the hatches when they see a storm coming,
and I think that this could.
Speaker 4 (04:25):
Be a way for folks to do that.
Speaker 3 (04:27):
I don't like that personal finance in this way feels
like it's getting slightly political because a lot of times
you see the different headlines and it seems like it's
just a reaction to different publications that are trying to,
you know, stir up a whole lot.
Speaker 4 (04:39):
Of clicks and eyeballs. Basically. Yeah.
Speaker 1 (04:42):
So, I guess you, as an individual can determine how
big your emergency fund should be and whether you should
be more worried right now increasing your savings. And I
think you make a good point, Matt. I think it
can make sense to reassess how much you have in
savings and how vulnerable you are to changes right now.
But I guess just a blanket prescription to change how
(05:03):
much you have in savings feels like a little too
much to me. And I think a lot of people
that the emergency fund they built up is likely sufficient
for most cases. And the truth is, too we can't
prepare for everything. We cannot be fully prepared for everything,
and so it might mean missing out on some of
the investments that you would have made and some of
(05:23):
the tax advantaged accounts you would have stuck money into.
If you were to say, oh, wait, twelve months is
now the standard. Guess I got to get their asap,
and that could create other problems in your financial life too.
Speaker 4 (05:36):
That's true. All right, We've got more to get to
On today's show.
Speaker 5 (05:40):
You're listening to how To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (05:47):
Don't forget to sign up for the how to Money
newsletter over at how tomoney dot com slash newsletter. Let's
keep moving though, Jessica asks, if I'm worried about a
layoff my husband works for the VA, is there a
way to look into what unemployment benefits we would qualify for.
I'm a planner, and yes, I like to plan for
the what ifs before they happen. Is unemployment stay by state?
We have emergency savings? Does that factor into how much
(06:09):
unemployment you qualify for? Also, I'd love an example copy
of a bare bones budget for a family of four,
for instance, how can you realistically go I'm sorry, how
low can you realistically go?
Speaker 4 (06:22):
On food? Oh? Yeah, that's good.
Speaker 1 (06:23):
I want you specifically to address the food question in
a second map because I feel like that's something you
Entertainment have been attentive to. That's the TLDR, but even
the challenge that you guys instituted for yourself a few
years back, which you've talked about on the show.
Speaker 4 (06:36):
We'll give that in just a second, but you might
have to remind me. But move on, okay or KEI.
Speaker 1 (06:40):
Move So let's specifically talk about the layoff fears first.
That was Jessica's first question. I get that insecurity. You know,
government workers, they used to have some of the most
secure positions around. That's no longer the case. If I
were in your shoes, Jessica, I'd be hoping for the best,
but I'd at least be planning for the worst, planning
for a potential job loss. Yeah, that means some things
(07:01):
for your finances, but it also means networking right and
looking for other work just in case, because you want
to be prepared and you want to have kind of
irons in the fire going because you're not sure kind
of where things are headed.
Speaker 4 (07:15):
Yeah.
Speaker 1 (07:15):
And then when it comes to unemployment benefits, yes, it
is a state by state thing. And no, your emergency
fund has no impact on how much money you receive
from those unemployment benefits.
Speaker 3 (07:26):
Yes, not like family assets and FASCA and them playing
for com Not like wait a second, she's you've got
plenty of.
Speaker 4 (07:32):
Moneys is loaded.
Speaker 1 (07:33):
We're not going to give you any of those unemployment benefits.
That's not how it works exactly.
Speaker 3 (07:36):
That's something that you are paying into. You will receive
those benefits, and each date has its own the employer
pays into it.
Speaker 4 (07:42):
Yeah, yeah, exactly.
Speaker 3 (07:43):
The formula is based usually on a percentage of your
recent wages, with a fairly low cap. In our state,
I believe the weekly max is something like three hundred
and sixty.
Speaker 4 (07:51):
Five dollars, and it goes a lot lower than that
if you make less too.
Speaker 3 (07:54):
Yeah, my guess is that your husband actually makes more
than that at the VA. So, but also know how
long those benefits might last, and so we're typically talking
anywhere between three and six months. So your liquid savings,
your emergency fund is going to be crucial, even though
unemployment benefits are certainly going to be helpful. And then
(08:14):
when we're talking about the bare bones budget, Jill, you're saying,
what challenge are you talking about as.
Speaker 1 (08:18):
Far as you We're trying to do two dollars per
person per meal for many years.
Speaker 3 (08:24):
Oh and you were able to achieve that well back
in the day. We're doing one dollar per meal per person. Yeah,
that's one.
Speaker 1 (08:29):
Dollar dude, you're making me think of the commercials to
support families in.
Speaker 4 (08:34):
Countries that are economically challenged.
Speaker 2 (08:36):
Man.
Speaker 3 (08:36):
Granted, this is when the kids were really little, so
it's not like they're eating a ton. Things are different
now as they've gotten bigger. I mean literally, man, it's
crazy how I don't want to get all sentimental, but
because they grow fast, yeah, they eat a lot of food.
And when it comes to your grocery budget specifically, it
comes down to how dialed in your current grocery spending is.
(08:57):
Because let's say you're a baller like Joel, and you
get your groceries delivered from Whole Foods, and then everything
else lies.
Speaker 4 (09:05):
Well, you don't do Whole Foods, but you've done that.
Speaker 1 (09:07):
I've been getting the little costs I've talked about, the
discount and Insta car gift cards.
Speaker 3 (09:12):
But and then let's say all the rest of your
groceries you buy at the local farmers market on Saturday mornings,
and it's super fresh and organic, and you can't get
any groceries that are any more extensive than that, because
that's kind of like as expensive as they get there, Well,
you're gonna be able to I mean, oh, my gosh,
you just by going to limit, Yes, I mean, you
could cut back in such a significant way if that's
(09:34):
what you're used to. However, if you already got your
groceries dialed in, let's say you are, you've been an
Aldi shopper, you are very intentional about your spending there, man,
it's really difficult to cut back on your spending, specifically
on groceries. So that's what I mean. I think that's
one that can vary pretty wildly. But I will say
(09:54):
the way our family is implemented a bear bones budget
is all other discretionary spending I've essentially slashed by two thirds,
and so it's literally hit with a multiplier jol of
zero point three to three. Because what I know is
that even if things aren't doing, like aren't so great
for our family, we're still going to want to celebrate Christmas, Like,
We're still going to go on vacation. Kate and I
(10:15):
are still going to want to go on date nights.
They're just not going to be as nice. Yeah, the
presents are going to be quite as big, the vacation
is not going to be quite as long or exotic, perhaps,
but there are still certain aspects the kids' activities. They
may not be doing quite as many of them, but
there are still certain things that like the reason they're
on our budget currently is because we've prioritized them.
Speaker 4 (10:35):
But we're just going to have to find a.
Speaker 3 (10:36):
Way to prioritize them to a lesser extent, not necessarily
eliminate them completely, though I know if a push comes
to shove that that's something that we can do. So
that's how we approach the barre bones budget. It's tougher
when it comes to groceries because there's sort of a
floor as to what it is that you can get
by on. But sure all other dis same thing with
your housing like housing, transportation and food. Man, those are
(10:59):
really tough to to make adjustments on, hard to turn
on a time like you can plan to change those,
but it's really hard to be like I'm going to
sell a car tomorrow because of a lot of life
life upeople.
Speaker 1 (11:09):
Yeah, you might be able to do you might not. Also,
I would say one of the biggest food line items
in people's budget is and sometimes they don't think about
it like this, but it's eating out craft Okay, you
keep the craft beer budget and then you cut eating
you can't elimit.
Speaker 4 (11:25):
Take that.
Speaker 1 (11:25):
That's your craft beer equivalent, of course, but it's eating out,
and people under assume how much they spend eating out
at restaurants, and when you when you look at the
data over the past five plus years, the amount of
money we spend eating out versust grocery stores, it's increased
significantly as a culture. And so that's the biggest thing
I think to combat is some of the eating out. Yeah,
(11:46):
you might be able to save a little bit more
by switching if you don't shop at all to yet
going there, you could probably you know, cut some of
the more expensive items from your grocery list. The same
things are going to be smaller there than they're going
to be, don't.
Speaker 3 (11:58):
You underestimate all I've been going from Kroger, which is
like an affordable grocery store, even going from Cross I
mean this, I've got the records, I got the receipts.
Man literally going back, you know, decade, not decades, but
years and years and years. Switch it from Kroger to
all these straight up getting item for item, we cut
our grocery budget by thirty percent. I totally three percent overnight.
Speaker 1 (12:17):
I totally believe I couldn't believe it, So I do
think that's an important tip. But I also just want
to highlight that there are other ways that people are
not really thinking that they're spending money or they're spending thoughtlessly,
especially eating out. It's just something that and the average
meal eating out costs four times with the meal at
home costs.
Speaker 4 (12:31):
So remember that.
Speaker 1 (12:32):
And if you want to get I think inspired to
make cheaper meals that are still tasty at home, check
out our friend Frankie Celenza.
Speaker 4 (12:41):
He used to struggle meals.
Speaker 1 (12:43):
He came on episode eight forty six to talk about
that and he's like, all about making good food that's
good for you for not much money at all, which
I love. So yeah, definitely check out that episode and
hopefully that'll be inspirational.
Speaker 4 (12:58):
If you really do want to cut that grocery budget totally.
Speaker 3 (13:01):
And he was into mountain biking, which is something of
that I remember staying there that. Yeah, I feel like
I like it even more. All right, let's get move in.
Pascal asks, is this a ridiculous time to put my
house up for sale and move?
Speaker 4 (13:12):
Oh? What do you think, y'all?
Speaker 3 (13:13):
I'm reading into the question and what I'm going to say,
is that if if you're looking to move to a
different country again going to like, hmm, I'm kind of
going back to the whole emotional response, the guitar answer
that we gave earlier. If you feel like that the worst,
like that the future of the US isn't bright, I
don't know that Like that feels more like a like
a knee jerk sort of reactionary response as opposed to
(13:35):
maybe you're moving for another job, opportunity to get be
closer to family. Maybe you're moving because you need you're downsizing,
or you're upsizing. Maybe your family's growing and you need
a bigger house.
Speaker 4 (13:45):
See that was my these are all good reasons yes
to move.
Speaker 1 (13:47):
That was my assumption in the question was that Pascal
was asking based on, Hey, is it just a terrible
time to list my house because of what's going on
with the market, And my answer to that is.
Speaker 4 (13:56):
Actually no, not really.
Speaker 1 (13:58):
I think if you're right, though, Matt, if you're like
I'm thinking about moving to a completely different country because
I'm worried about the future of the United States, I
would say that's probably overblown. Like yet, there's a lot
of folks out there who who feel that I don't
harbor the same fears, but I will say it's not
that the housing market is immune from trade policy changes.
It's just that other factors influence your decision whether or
(14:20):
not to move a whole lot. More like, I'd love
to know how long you've owned the home while you're moving.
Are you moving to a lower cost of living location.
Are you hoping to rent for a while after you
sell this house. That would be helpful information to have. Ultimately, No,
it's not a ridiculous time to sell your home. Home
prices are high, even though mortgage rates remain steep, and
so you got to make sure you price the home
(14:41):
right and you market it well because homes are staying
on the market longer these days. But you can still
do quite well as a seller in this market, especially
when you think about where home prices were a few
years ago. Matt, think about Pascal, if even if he's
only on the home for four or five years, just
the appreciation on the home in that amount of time
could be significant.
Speaker 3 (15:01):
If you have flexibility though as to when you might
list this house.
Speaker 4 (15:05):
If it was me.
Speaker 3 (15:06):
Personally, Because of the uncertainty in the market, I think
a lot. I mean countries. There are entire countries that
are hitting the pause button on certain things. There are
certain industries that are like, Yep, we're just kinda we're
gonna ride this thing out and see where things land.
Because of that, we're seeing employers and it's all trickling
down to consumers. The level of uncertainty is leading folks
to not want to take risks, which means that you,
(15:29):
I think that you may not be able to get
the most for your house where you to sell it
like right now, as opposed to letting things shake out
and see where things land in thirty to ninety days.
Perhaps if it was me, that's that's what I would do.
Speaker 1 (15:43):
Yeah, but you just still have to remember, like where
what was the home valued at a few years ago?
And are you going to do pretty good? And if
it's time to go, is it time to go? If
you have flexibility though, Matt, yeah, Pascal might be able
to do better by waiting to sell, but also it's
bring selling time and as well, you could do a
whole lot worse than selling right now.
Speaker 3 (16:03):
Yeah, what if tears lead to sky high prices, inflation
starts going up and the Fed's like, oh guess what
we're not going to do at all this year.
Speaker 4 (16:09):
Yeah. You know, we talked about those two rate cuts. Yeah,
not happening.
Speaker 3 (16:13):
That's not going to be great for the market and
mortgage and financing costs.
Speaker 4 (16:17):
Yeah.
Speaker 1 (16:17):
But then again, if the cost of building those homes
goes up. Yeah, there's like so many not on effects
that are hard to.
Speaker 3 (16:23):
Put any different effects that it's truly hard to take
them all into account. So you got to do it
for personal reasons. Then people buying sell the homes all
the time because they were at the stage of life
where they needed to do that, No doubt. We got
more money saving information to get to.
Speaker 5 (16:38):
You're listening to how to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (16:44):
If you have a money question, we'll send it our way.
All you have to do is record your question on
the voice memo app there on your phone and send
it over via email. You can find the simple instructions
at how toomoney dot com. Forward slash ask the word recession.
We've heard that being tossed around a whole lot more
right now. Understandably, we actually covered recessions in our latest newsletter,
(17:04):
Plug for.
Speaker 4 (17:05):
The HOA Money newsletter.
Speaker 3 (17:06):
Go sign up if you're not hodamoney dot com forward
slash newsletter. Well, Joel, In times of greater uncertainty, frugality
starts to become cool again, ways to save more. They're
starting to trend in ways that they didn't when the
economy was firing on all cylinders. And that's where recession
hair comes in. This appears to be one of those
uh wor ladies. They're waiting longer between salam visits. They're
(17:29):
letting their roots show more power to you, ladies. I'm
all about that, letting their hair grow long and going
back to the natural color. I think the male equivalent
is certainly what I did during the pandemic, letting the hair.
Speaker 4 (17:41):
Go really long or cutting it yourself.
Speaker 3 (17:43):
We should post a picture of that for people you
had to grow really long, I look significantly older. That
was like double hair, man. It was pretty crazy. Yeah,
you know, And I did the math. Because this kind
of behavior compounded over time, Joel, it makes a big
difference cutting. So the averag the average dude's haircut is
thirty bucks and typically depends on who you are, but
(18:05):
most guys go to the barber anywhere between three and
six weeks, So I figured, all right, thirty bucks. Let's
say every month you do that for thirty years, which
is how long I've been cutting own hair. Now you're
looking at over forty thousand dollars man, compounded in the market.
Speaker 4 (18:19):
Isn't that not insane?
Speaker 3 (18:21):
Just by this one little thing that I do myself
well and a set of hair clippers once a month,
hus what thirty bucks?
Speaker 1 (18:27):
And with the additional because you have some additional links
that you have for the top of your hair so
you don't have to use scissors on it, because that's
where things get a little.
Speaker 4 (18:36):
Score at the US and scissors where it gets a
little dice. Yeah.
Speaker 1 (18:38):
And I know for women it's different, I know, and
everyone has their different kind of fashion standard, but they want.
Speaker 4 (18:44):
To present their craft beer equivalent.
Speaker 1 (18:46):
But I kind of like when people lean into the
stuff and they make it cool to be frugal, because
I think it just gives people the hall pass to say, okay, cool, Yeah,
I'm gonna jump in on that I'm not doing this,
And it's similar to it's like wearing that frugal that
frugal change as a as a badge of honor instead
of being feeling like ashamed about it or feeling like
that cost cutting endeavor is somehow badly reflected on you
(19:09):
for the whole world. That's right, yeah, exactly, well, and
then say some other ways, we could say Matt is
not buying cutting edge technology.
Speaker 4 (19:16):
Right. Well, I didn't realize this was a thing. I
just saw that this week. Eight K TVs. Did you
know that was? These are? Like, yeah, they are like
the super fancy ones.
Speaker 1 (19:24):
Somehow, I didn't know that the resolution on TV screens
had gotten twice as good.
Speaker 3 (19:29):
I guess like the newest iPhones, or maybe it's just
as good, but that makes sense, like if you're looking
at an iPhone because it's a foot from your face
or whatever, but a TV is supposed to be far away,
Like can you even tell the difference?
Speaker 1 (19:40):
That's a good question, and it seems like you can't.
So the tech nerds that's seen that they wrote about
this in particular, and they said actually that you shouldn't
buy one of these because they're too expensive. And if
anybody is going to tell you to buy a new
fancy TV, it's the people have seen it because they're
super into electronics, it's true, and they want to tell
you how awesome it is and why it's worth the
more sense of price tag. But take was that the
(20:01):
older O lead technology does almost as much at a
fraction of the price. And on top of that, what
I would say is, if history is any indication, ak
TVs are going to get better and cheaper in a
matter of years, if not months, So you know, waiting
until price drops happen and technology improves is wise. You
don't want to be the early adopter of the new
(20:22):
technology that's overly priced. It's similar to basically every other
thing in the technology realm. The advances just aren't as
groundbreaking as they've been in the past. When you go
from from you know, seven twenty to four K, man,
that's a big jump. When you go from four K
to eight K or probably sixteen K in a couple
of years or something like that, Like, you're just not
going to notice as much of a difference.
Speaker 4 (20:42):
Now, that's true, Let's keep the frugal live and train
go angel.
Speaker 3 (20:45):
Another way that some companies out there are trying to
cater to price conscious consumers is to offer guaranteed pricing
for longer periods of time in order to combat this
uncertainty that everyone is experiencing.
Speaker 4 (20:57):
Which sounds nice, But here's the thing.
Speaker 3 (20:59):
Yeah, actually don't need it, and you'd be overpaying in
most cases if you opted for it. So Verizon in particular,
they're offering this guaranteed three year price lock in basically
for streaming customers. T Mobile is doing something very similar with.
Speaker 4 (21:15):
Their wireless service.
Speaker 3 (21:17):
But first of all, their prices are higher than our
favorite mv and os on the note of T Mobile here,
so our favorite mobile virtual network operator carriers like Mint
and US.
Speaker 4 (21:28):
Mobile are right out of the gate more affordable. Yeah.
Speaker 3 (21:31):
But then secondly, phone bills have been going down in
recent years, and so a price lock is actually the opposite.
Speaker 4 (21:37):
Of what you want.
Speaker 3 (21:38):
You want to be able to shop around as the
competition has increased, and as a competition has increased, prices
they have dropped, and we want you to take advantage
of those dropping prices.
Speaker 1 (21:50):
Someone would benefit, a company would benefit from you price
locking when they charge more and when that thing is
actually experiencing deflation, which is what's happening in the cell
phone space.
Speaker 3 (21:59):
What they're doing is they're looking to provide stability for
themselves as a company as opposed to you.
Speaker 1 (22:04):
It's what sounds what sounds beneficial yeah to you, is
ultimately beneficial for them, So yeah, don't. When you see
those price locks, you might think what a great company.
This is so sweet, I can't wait to take advantage
of that. But actually the opposite might be true. So
dig one level deeper. And it's no secret to Matt
that that concert prices have soared in recent years. That's
partly because of Ticketmaster's monopoly boo, but demand. It's also
(22:27):
up as people prioritize those in real life experiences like
live shows. Yep, so going to a concert, it's amazing.
I think people assumed in the age of the internet
and like, I can literally stream shows for my favorite
artists online, but that only gets to be more excited
to go see the show in person, and I think
that's kind of what most people are feeling well now.
(22:47):
And of course, of course you can pay for those
concert tickets in installments instead of paying for all up front.
There have been a few articles written about Coachella payment plans.
Coachella is like two weekends, happened this past weekend and
this coming weekend. Well, the La Times called the Coachella
payment plan financially smart to pay for your six hundred
dollars Coachella ticket over the course of many months.
Speaker 4 (23:10):
A lot of booing during the segment.
Speaker 1 (23:11):
Of course, we think that is trash advice. La Times,
get your game up. You pay an extra forty one
dollars for the privilege of paying for those tickets over time.
And I get that six hundred bucks is a lot
to pay. It's a lot of money for a weekend
festival to go see your favorite bands. Still, we think,
and this might sound incredibly old school Matte, maybe we're
(23:33):
like trad dads for suggesting that you have the cash
to pay for the thing you want to do upfront. Man,
like okay, Boomer, But that's truly the advice that we
have for you, and it's just tried and true. It
makes sense. Yeah, you should skip Coachella. You should skip
the concert you want to go to and save up
for next year's version if you don't have the money
to pay for it.
Speaker 3 (23:53):
Yeah, it's to the La Times defense or to the
specific writer he did say, if it's in your.
Speaker 4 (23:58):
Budget, is on your budget to pay for one?
Speaker 3 (24:01):
It kind of depends on what your definition of what's
in your budget, right, Because in a similar way, we'll say, well,
if you have the cash on hand, if it's in
your budget, then sure, put that expensive charge on your
credit card. But even beyond that, it's the buy now,
pay later, the installment buying method, even if they're not
charging you right because a lot of them they don't
charge interest, A lot of them actually do, or they
(24:22):
have options where you are paying interest. But what I
think I've realized about the buy now, pay later, where
you're paying it in installments, is that it in fact
makes you an installment buyer. And it's a slippery slope
before you're carrying a balance on your credit card because oh, well,
that's also an installment. And then boom, what has magically
happened right in front of our eyes here that you
haven't even realized?
Speaker 4 (24:42):
You're living paycheck to paycheck?
Speaker 3 (24:43):
Like that's what that does when you get on this,
when all of your expenses are essentially being automated without
you even thinking about it. Like that's like the very addition,
very definition of living paycheck to paycheck. And I think
that's what I'm realizing that I dislike about the buy now,
pay later, is the habit for a that is taking place.
Speaker 4 (25:01):
Yeah, I couldn't agree more.
Speaker 5 (25:02):
You're listening to how to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (25:08):
By the way, you can always find more money saving
information over at howtomoney dot com. Let's keep moving, We've
got listener questions to answer. This one is from Alex
who wrote how to Determine whether it's worthwhile to take
any early retirement offer. I know folks who are working
for the federal government and are like five to nine
years away from retirement, but some of them have been
(25:30):
receiving offers to retire early and still get their pension benefits.
Joel kind of sounds like a scenario where folks are
getting to have their cake and eat it too.
Speaker 1 (25:39):
Potentially right, Potentially depends on the individual for sure. I
mean I like this, especially for people who are financially
independence minded, like they've been working towards that. It's kind
of like arranging your own layoff. It's one of those
things that doesn't it doesn't come around for everybody, some
sort of early retirement offer. And we talked about something
akin to that with Sam Dogan back in the day,
(26:01):
the dude who runs the website Financial Samurai, And it
can be a brilliant move if calculated correctly. And he
was just talking about when layoffs are happening at the workplace,
if you kind of volunteer and you get a sweet
severance package to walk away. I think he got like
two years worth of pay or something like that, something
in most people don't get that much. Nope, it's like
six months at the max. But that can be if
(26:22):
you are in a good financial position, like something that
only increases and benefits your financial standing while allowing you
more flexibility. But so much depends right on your likely
job stability, your overall financial situation. Because if you've got
a big chunk of savings you've been investing for years, well,
you can totally use an early retirement offer to allow
you to vacate your position earlier than you thought you
(26:43):
might be able to. But if not, like, if you're
in more tenuous financial circumstances, you have to be really
careful before taking an early retirement offer because you might
find that you don't have gainful employment lined up sure,
and you're in a much worse financial position. Yeah, but
taking alex he or she wrote this early retirement So like,
(27:03):
if if we're taking a retirement in the traditional sense
of the word, and you are going to be totally set.
This totally changes this conversation from a financial conversation to
a life fulfillment conversation. Right Like this is on Maslow's
hierarchy of needs.
Speaker 3 (27:18):
Where you've just graduated to the next level and we're
talking about you know, these are more like self actualization
needs as opposed to do I have enough money to
pay the bills? Do I have enough money to be
able to afford some of the more you know, some
of the luxuries in life, some of the things that
I want to do, And so much of that comes
down to how it is you want to spend your time.
And so I think that's if you are closer closer
(27:39):
to retirement, I think you might be more in that camp,
which leads to less number crunching and more uh self searching, Yeah,
soul searching and writing and you know, like journaling and
trying to figure out like what do I want my
days to look like? And if that's the case, Alex,
I would highly recommend for you to literally do something
like that, like go on a silent retreat, spend some
time just completely away from what it is that you
(28:02):
are doing. In the day to day to shake things up,
to help you to maybe almost stumble upon whatever it
is that you might want to spend the next decade
or two do it.
Speaker 1 (28:10):
Yeah, I mean, I love the idea for lots of people.
If this means, hey, I wasn't. I was still planning
on working to get that pension because that was a
huge part of kind of my retirement income plan. But
because that comes along with the early this early retirement offer,
why don't I just ride off into the sunset now
I'm fully financially prepared. If that's the case and you
(28:31):
have other things you'd rather be doing with your life,
kind of like you're talking about, Matt, I think it's great.
I think this can be the perfect accelerator to get
going in retirement earlier than you had planned, maybe enjoy
some more of those early retirement years that you were
going to be working instead. So yeah, I think that's
I think that's great advice. All right, let's get to
a question from Pam. She says, I'm a middle aged
(28:52):
investor in forty six. I'm looking for advice on how
to help protect what I've already saved while still remaining
agile and aggressive. I recently trace my income after years
of struggling to save money, so I will be actively
trying to catch up on my retirement over the next
ten plus years. I'd love to hear how this market
will help or hinder my ability to catch up on saving.
Speaker 4 (29:11):
Yeah. Wait to go, Pam on increasing your income. It totally.
I'm sure it feels good.
Speaker 3 (29:16):
She said that she was struggling when it came to
being able to save and invest, which means that she's
actually able to do it now because she's got more
money flowing in. It's going to allow her to ramp
up these contributions, and in her words, she's looking to
protect what she's saved while being aggressive as well. And
I think there's only one way to do that, and
that is to invest like an optimist and then save
(29:36):
like a pessimist. So keeping your savings such Morgan Houseold quotes, Yeah, yeah, yeah,
I did not coin that phrase. Those savings, those dollars,
the money that you've got there in the emergency fund
needs to be secure and liquid in a high heeled
savings where you have enough on hand to give you
that peace of mind, you know, given to meaningful financial
(29:56):
downturn and then just keep investing in low cost index
as well, like clockwork, and the goal is to have
enough cash so that you don't have to ever touch
those investments at an inopportune time, like right now. That's
something you want to avoid at all costs. And right now, specifically,
given the fact that you're talking about having not made
(30:16):
a whole lot of progress perhaps up until now, just
realize that some of this volatility that you're seeing it
doesn't really impact you nearly as much. This is something
that when you've been saving and investing for decades and
decades and you've built up a fat, you know, nice
sized nest egg, that's when this volatility can really take
a bite out of your overall network. The number can
(30:38):
change quite a bit. Yeah, And obviously, let's say you've
been investing for a few years, it still sucks to
see your investments go down by a three grand. It's
different though, when it's thirty grand or one hundred grand
or one point fifty. And that's the kind of swing
that some folks out there who have been investing for
twenty thirty years, that's what they're experiencing right now.
Speaker 1 (30:57):
I will say, I do think no matter to the
size of the drop. The people who have more cash
on hand, who feel comfortable that they can cover bills
if something unexpected does happen to their job or to
whatever like, if they feel more financially prepared from a
liquid cash standpoint, My guess is they don't feel the
loop de loop in their stomach when they look at
(31:18):
their retirement account balance nearly as much. Whether the storm exactly,
it's much easier to weather the storm. That's why that Hey,
if I've got the cash on hand and savings to
back me up, and I'm still doing the investing thing
like clockwork, well then you don't have to. That should
reduce worries significantly. And as we said before, right dollar
costs averaging into those tax advantage accounts, that's where it's at.
Do that through thick and through thin, and then you know,
(31:41):
once you resee age at fifty PAM you're a few
years away, you'll have the ability to contribute even more
to those accounts. And as those contributions limits rise, you
so you're making trying to catch up on retirement account contributions, Well,
guess what, at fifty you get to contribute more, which
is pretty cool.
Speaker 4 (31:56):
One thousand bucks.
Speaker 1 (31:57):
Yeah, so into the iras and then even more into
like four to one case four or three b's. And
so if you're getting to the point where you're maxing
any of these accounts, just note that in a few
short years you're gonna be able to funnel even more
into those accounts, which is which is awesome, super sweet
and yeah, and that kind of goes to the volatility
sort of point I was making her. Save your savings rate, Pam,
the amount that you're able to set aside right now
(32:19):
into those accounts actively as opposed to seeing the returns
on that money. That is going to have the biggest
impact on your retirements. That's so underrated, is there super
savings rate? People don't talk about it enough. The more
the higher your savings rate, the more the less you
have to worry essentially about the machinations of the market.
Speaker 3 (32:35):
Totally agree, buddy, And that is going to do it
for today. Thank you for listening. We appreciate your time
and attention. We'll see you back here next week.
Speaker 1 (32:43):
You've been listening to How to Money with Joel Larsgard.
You can always hear us live on KFI AM six
forty twelve pm to two pm on Sunday and anytime
on demand on the iHeartRadio app.
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