Ask HTM - Avoiding Busted Budgets, Getting Declined with an 800+, & Financing Medical Expenses #604

some surgery that he's got coming up. He wants to make sure that he is optimizing his money moves. So looking forward to those three questions plus two others today, We've got a good lineup of listener questions here today, Matt. Look forward to get to them. But before we start diving in, I wanted to mention this is something I just found out. I'm looking for looking for a new bike shop up here by where where we live. I haven't been to a bike shop yet, Yeah, I haven't.

I found a guy. I think I mentioned this on the show. I found a mobile bike mobile guy. You don't, so you don't want to go with him. Well, so it was just I just need a flat repair, and I had the bike already in my car, and it was I was like, man, I just is there someplace I can take this and have it done quickly? Just want to get back on the road. And I realized, wait a second, there's an ari I like five minutes away. And do they do bike repairs? Oh? Wait, I looked

it up online. Yes they do. And so it turns out as I was looking on their website that ari I had does want they do a lot of bike maintenance and too. If you're an ari I co Op member, which I believe cost thirty bucks you used to cost twenty bucks back in the day, you get a lot of discounted bike services and and some bike services you get for free flat repair included. Oh no way. Okay, So what if you purchased your bike from ari I, Well, I don't know that that has any area. Okay, you know,

you just have to be a co op member. You can bring any bike purchased at our Okay, because I purchased my gravel bike from ari I, and that would be a killer perk if it's like a you know, like the costco tire thing where you can just constantly bring back your car for maintenance. If I could bring back my bike, I think the bit of maintenance would be all about that. Like the perk for people who bought their bike from ari I is that that you get free tune ups for the first year. I think

that's how it works. But after that, basically all co op members, no matter if you bought the bike at A or not, you get the same free or discounted Mike perks. So um, not an ad for ari I, just a mentioned we like them, though we do like ARII, just to mention that that's a that's a cool benefit. And so I popped in there and I bought the tube, the new tube from mari I, but they put it on for me and I was in and out the

door in no time. And I was like, man, aria I might be my new bike shop locally when I don't need a lot of work done. And if that's the case, I'll call my mobile bike repair guy. Sure. Or you could learn how to do some of this yourself. I could a buddy of mine who's really into bike and he's just like dude. The markup that they put

on bicycle tubes in particular. You can buy like three to five of them online for crazy cheap, and it's just it's like one of them like two bucks, right yeah, um, and so yeah, maybe we'll bike Lever's nice Joe blow bike pump. Those are I feel like, some items that everybody needs to have in their garage. But yeah, good to know though that that exists for folks out there who are just wanting to have that knocked out. Which

what bike did you have? My road bike? Flat on the road bike also ended up getting a new tire while I was in there, one that hopefully we'll prevent more flats from happening in the near future, but one of those gator skin tires or whatever it was. It really yeah, okay, I was like like a little stickler

puncture proof. It's nice, which because flats still ruins on road bikes in particular, because it's like you're always riding on a like a razor's hedge literally what it feels like true, there's there's a little tread on them and all this as compared to a beefier tie or that can maybe handle some of the some of the shocks that can handle crossing over from road tracks for real, perhaps exactly so, all right, let let's let's move on. Matt uh and le mention the beer that we're having

on this episode. This one is called two Turtle Doves. It's by the brewery. Of course. We're having a Christmas team beer right here in the middle of December. Holiday's Baby. That's right. We'll give our thoughts on this one at the end of the episode, but for now, let's get to the listener questions. And if you have a question you want us to tackle on an upcoming ask HTM episode, we would love to hear it. Just go to how

to money dot com slash ask. There are simple instructions there for you to record your yourself asking that question and how to get it over to us. It's pretty easy. We would love to hear from you, and we'd like to take your question on the next ask HTM episode. And but Matt, let's get to our the first listener question of today. This one comes from a listener in Michigan. This is and he's about to retire and he wants to make sure that he's got his eyes dotted and

his teeths crossed. Hi, Matt, Joel. This is from the Detroit area, and I just turned sixty this past August and need to figure out how to get a I guess, a fee based financial advisor fiduciary. I've got money all over the place, got a pension coming in that I didn't know about, and have some rath I ras in a couple of different places, a lot of savings accounts, Internet savings accounts, and just for I would really like to get this all in one place and have a

nice plan going forward. Thank you very much. I've been enjoying your podcast now for the last year and a half and look forward to it every week. Thank you all right, Mike, thank you so much for that question. We appreciate you listening for the past year and a half. And by the way, he mentioned finding that pension that he didn't know about. That is an awesome, uh, you know, a little early Christmas present for you here in the

middle of December. I mean, not many people are gonna find better things than that under their treat Yeah, for the rest of your life. You forgot about that. Absolutely, That's a nice shocked shock right there. Yeah, And so let's let's talk I guess generally about financial advisors here for a Second, because we've done an entire episodes about how financial advisors, how they're they're not quite as necessary

as most folks think. You know, we actually believe that a lot of folks would be better served by hiring a money coach. Uh. Not only would that individual be able to help you to think through some of the some of the more of the financial fundamentals, but then they would also be able to help hold you accountable when it comes to the execution of the plans that

you formulated. But you know, when we say that advisors are often overrated, which is sometimes what you'll hear us say, we're typically trying to help folks who are in their early investing years to avoid paying just basically unnecessary fees and money to a professional uh. And by saving that money, that would allow individuals to sock more money away into

the retire and accounts. UH. And that's because financial advisors can be crazy expensive, especially relative to the amount of money that early investors, folks who are earlier on in their journey that they have set aside the higher percentage of their income of their network exactly. Yeah, and when you are younger, oftentimes you should honestly be more intentionally focused on just simply living on less money than you make and then just investing the rest. But Mike Key

is in a different position. The wealth accumulation is actually easier in some respects, in many respects than the wealth draw down, And so I would say it's likely more important to have a financial advisor when you are getting to that point where, like Mike, you've got accounts all over the place and you're trying to figure out how and when access those things. Are a lot of tax consequences that could cost you big, big money, and that's

when an advisor can actually come in. Uh. It can be a lot more helpful, way more helpful than when you're like should I put more in my four own k? Like when you're thirty two or eight? Uh, an advisors just less helpful and it's pretty simple and straightforward, or when you're just investing those dollars as opposed to the nuances that go with a draw down. Yes, exactly, And and I love that that Mikey's on the right path. He's looking for a fee only fiduciary advisor, which is

which is what we recommend. Fee only means that you're paying a flat rate hopefully an hourly rate. That's our favorite method. It's it's just a straightforward will hate to pay someone for their time, and that's you're you're basically paying them three bucks an hour or something like that for their advice per hour you meet with them. And it may not initially seem like the most affordable advice because hundreds of dollars an hour, that that sounds prohibitive.

Most people are like, wait a second, what am I paying you for? And and why do you get paid so much? Have I just hired the most expensive attorney of all? Right? But it's just there are so many worst pays, worst ways actually to to pay a financial advisor that when you break it down, this is the

best method. This is the best way to pay someone for their advice because the alternative models you're going to see out there are commission only or at least commission based, right where the advisor received a kick back from a company when they're able to get their clients to sign

up for a particular financial product. So they might be selling you something that comes with higher fees that's not in your best interest, and so this model it might seem like a bargain up front they're like, no, I do it for free, right, you don't have to pay me anything up front. But you're often getting saddled with the expensive annual fees or subpart investments that are gonna slowly harm your future earning potential. So having a fee

only fiduciary planner is the best way to go. It's it's just the model that comes with the fewest conflicts of interest, that's right. And so how is it that might should find a fee only fiduciary advisor. There are actually networks that advisors can join for for younger folks out there, actually um x Y Planning Network. That's one of our favorites. The folks who participate in this network, they serve mostly, of course Gen X and millennial or

gen Y clientele. That's why it's the x Y Planning Network. But I like that they allow you to find an advisor by specialty as well, not just by location, because you know, you don't necessarily need to find someone near where it is that you live, unless that's you know, something that you want to prioritize that's really important to you for some reason. Yeah, I remember when we interviewed Philip and Julia Olsen from the two cents PBS videos

on YouTube that they make ago. Yeah, well they they're Philipsop. They run a financial advisory firm and they cater specifically to artists to create a creative Yeah. And so if you're in that field like those of you should be seeking them out right to help you with money management. And I think it's more helpful to work with somebody who serves your niche than to find somebody who has

an office close to you. But what's important to point out here, though, is that all of the advisors that are on the x Y Planning Network they signed a fiduciary oath. Makes it sound way more official when something is an oath, like a blood oath. Uh. And so you know this isn't just a title that gets used. This is a literal promise. The other planners are are committed to always working in the best interests of their clients.

But Mike, you are not gen X or why though you can certainly go to the x Y Planning Network so for you, you can also check out NAVA, which is the National Association of Personal Financial Advisors. That's another great place for for you to turn. NAVA dot Org is the website for that, and yeah, either one of those, um you can find. I don't think people at x Y are gonna turn you away because you're a few years outside of their demographic, but either one mean gen

xers are getting older as well. When we whether you can be like fifty seven years old and still technically be considered a gen xers just crazy thing. So you and I'm are millennials and you're but we're turning ford here a couple of weeks barely millennials. So like we're I mean, I'm barely a millennial. I'm I'm almost almost a gen xer. I'm much younger than you. Like that should be pointed years, right, I wish not quite? Uh well, And so I'll say this to Mike, like put this

on your to do list. You gotta get organized because either way, whether you're hiring a financial advisor or not, wrangling all those different account logins, making sure you've tracked down all all of the money that you have across those dispart accounts, and making sure you've taken into account all the pensions that you might have. Maybe there's another

one hanging out there. He's got like two others hanging out in the wings, lift up every rock that you can and find all those accounts and find out where that money is coming from. Yeah. Also, okay, on that note missing money that well, that's another resource too that will link to. Because Mike, if you are somebody who may not be completely organized, and I'm going to just point this out, this is something that you admitted to the fact that you didn't know that you had a

pension that existed. There's a chance that there are some states that have money that belongs to you, and so what will link to the missing money site where you can enter in your personal information and really every hind of money listener should go there once a year can and type in their their info. It will take you literally thirty seconds and you can see if if there is money hanging out. We've had tons of listeners when we mentioned that. Every time we mentioned that's like a

dozen people reach out to us. And I've ever heard of this. I found thousands of dollars or hundreds of dollars that was that was owed to me that I didn't know. Especially this time of year, this is like a great time to up turn a rock. Then you're like, oh my god, there's money there. That's right, that's right, love it. So, yeah, go over those old statements, I would say, might get and dig up those accounts that might have slipped your mind. And yeah, you might even

realize that you don't need to hire a professional. I don't know. It sounds like you have a complex enough situation that when it comes to the draw down and when it comes to the tax implications, it's gonna make sense to talk to a professional, pay for a couple to three or four hours of their time, and to get their input so that you are making the most tax efficient choices for you moving forward. This is um you know, these are important years to kind of come

up with that draw down plan. Uh So, yeah, get your financial ducks in a row and then start reaching out. Interview a few I don't know, three or four for the only advisors to see maybe who's gonna be the best trip for you personality wise and specialty wise. And yeah, we we hope that they're able to to help you make the best decisions for you and for your financial future.

But Matt, we've got more questions to get to, including you got a question from a listener who's like, man, there's always a budget buster every single month, i'n't feel like I'm encountering something, and I feel like that's not an uncommon thought we've heard from other How Money listeners. We'll get to that question and more right after this break.

All right, we are back for the break take and listener questions, and Joe, we will get to that budgeting question here in a second, but first let's take a question about a credit card. Hi, Joela Matt, this is Lindsay from Sonoma County, California. I have a question today about credit cards. I was using your credit card matching tool a couple of days ago to find a new credit card offer. I use currently a couple of cards.

One's a hotel one's a airline card. But I was really looking for a cash back card as I don't have that in my current wallet. So I found the City Premier card through your tool than you and it has a great bonus right now. I applied for the card and was really surprised to be declined for this credit card. Um with a credit score of over eight hundred and by the fact that I pay off my cards in full every month and have a long credit history. Um. Again,

I was just really surprised. I got a letter from City Bank stating that the reasons for this was that my credit report shows a high amount of unused credit compared with available lines, and that my credit report shows too many open revolving accounts. So those two things I've always viewed as positive, having the low credit utilization and having the accounts stay open to show that long history. Um, Am I doing something wrong? Should I close some of

these open accounts? Just looking for some advice? Thank you guys. All right, so real quick. So she mentioned Sonoma County. Is that where Lagunita? Is it depically? Yeah? I think so. Too bad. We didn't coordinate our beer with Lindsay's question, but I'm guessing yeah, maybe Lindsay knows a little bit more about wine than she does craft beer. But there's some good stuff out there. Yeah, no, there's I feel like there's good beer and and good wine out there,

like can enjoy both. California, it's like an embarrassment of riches when it comes to you know, alcoholic beverages and taxes. Well maybe the oppisode of that front. Well, but Lindsay has got a great question here, and Matt, when when I first heard Lindsay's question. When it first came in, I was like a little shocked to hear that she was declined for those reasons. It does not these facts do not compute, like based on what she's what she experienced,

that yeah, definitely doesn't make sense. Having too much credit is rarely a reason for a credit card issuer to deny your application, especially when somebody like Lindsay has shown that she handles it so well. Right, she's got that impeccable credit score. It seems like, based on everything we've ever talked about when it comes to the credit scoring models, that she, of all people, should be accepted for any

credit card that she applied applies for. Well, one possibility will mention Lyncy, and there's a there's a couple thoughts that we have here on why this could have happened.

But one possibility is if the bank that you apply for that card with thinks that you are what's known as a credit card churner, and that is kind of a derogatory label they might apply to you if you're the kind of person who opens up a lot of credit cards in order to score bonuses and so uh, it's a great idea to open credit cards on occasion and to get those bonuses, because they can be just

incredibly beneficial for the layperson credit card user. But if if this credit card company sees that you've opened maybe four or five cards within the past twenty four months, they might want to avoid extending credit to you, thinking that you're just in it for the bonus and you're

gonna ditch them at the first moment possible. And so Chase actually has the most well known version of this, which folks on the internet called the five rule, whereas if they they will not allow you to sign up for one of their credit cards if you've opened up

five cards in the past twenty four months. And I'm not or if that's your scenario, but it could be an explanation if you have opened up a few other credit cards in the past year or the past two years, they might say, you know what, we don't think you actually want this card for for the long term, which what they want that we should be a long term customer. We think you're in it just for that bonus, and so because of that, that's why we're not going to

accept your application. Yeah, and the different banks they've got different sort of like rules of thumb as well, Like I'm pretty sure the City has got like this six of six rules. So basically, if you had six hard inquiries to your credit within the past six months, you'll also get denied. So it's not even specific to credit

cards if that's not what you were doing, Lindsay. And by the way, those rules are not hard like that you don't find you won't find them on City or oh yeah, you won't find them on their website, like they don't spell that out, but it's something that people have. It's become become kind of like a common understanding, um, like like you'll find it on the Reddit forums when

you're reading about credit cards there. And the fact is too, I mean they're constantly changing, like these are different rules and guidelines that the different banks are are following, but that doesn't mean that they can't change their mind on dime. So yeah, Lindsay, we actually reached out to City. Joel, you kind of spearheaded this. This is kind of like a throwback to your your radio days where you're like reaching out to companies and be like, hey, I got

a question for you. I was like I want the truth, and they were like you can't handle the truth. And I was like, oh man, give me something. Uh. And so, of course, with with City being a gargangean bank that doesn't necessarily care a lot about responding to its customer needs. Uh, this is the response that we got, and this is from an actual individual. But they said, quote, we cannot

speak to any one customer situation. City strives to build long term relationships with our customers and provide value and benefits that encouraged sustained engagement. As such, we carefully review each application and consider a range of eligibility factors, including the number of open accounts. And so while our specific eligibility process is proprietary, we believe you like think you know, we believe this approach is similar to that of other

issuers within the industry. And so that's just all long winded way of saying that we're not going to tell you why it is that she got declined. I was something for more than that. I honestly I was hoping for something better than just pr spin that's literally what this is. And so I was hoping that they would give me some some sort of insight into why somebody like Lindsay, who is a great customer great credit score who has handled credit very well would be denied for

something like it. But but they don't want to. They kind of want to keep that tight lipped. Seems so what's so crazy here is is I mean, based on this response that she got, it sounds like city like they are saying the quiet part out loud. So based on the traditional rules, like I'm used to seeing, oh, yeah, you've applied for too many accounts or cards in the past,

you know, in recent in the recent months. But the fact that they are literally stating why it is that internally that they would be deciding why to turn her down right, Like that doesn't make sense. It's it's it's almost as if they're like they're changing the rules essentially, um And so that's in my mind, in my estimation, Like that's the weirdest part here is that, Okay, based on what you're saying, it's it's almost as if the old traditional rules of credit do not apply, Like they're

changing the rules. Does that make sense? It's it's almost as if they're like they're looking for more like less credit worthy card users as opposed to credit card users who truly would use their cards responsibly. Like that's the part that makes it's it's interestly because the people, makes sense, don't use their credit cards as responsibly are the ones who make the bank's money. So exactly, not like that's the thing. It's almost as if they're revealing their marketing plan.

It's just like we need to target the folks who are going to handle their credit poorly as opposed to the folks who are handling their accounts responsibly. Yeah, like how the money listeners would be considered exactly because exactly going to the banks because they do keep pristine credit scores, they don't ever owe any interest or late fees or penalties to the credit card companies, and so yeah, that's not necessarily the ideal credit card customer for some of

these for some of these credit card companies. But still, I am shocked this he was rejected for this. I'm also I just made me think, like, how glad am I that I don't work in pr By the way, having to write those emails and say something just incredibly opaque and silly sounding to us so that we can read it on the air and make that company sound ridiculous.

It's just I would hate having to respond to those emails in that way, I prefer a form of a little bit of authenticity, at least from I don't know everyone, but from a big bank. You don't expect that, but I would hope for more. But despite this annoyance and inconvenience, Lindsey, we would say, it's actually possible for you to still get this credit card. And that's assuming that you still want it. Because most credit card companies City included, have

what's known as a reconsideration line. I would call them up and I would ask them to reconsider your application and be sure to mention the reasons why you think you're a good candidate for the card, why you want

this card. You know they obviously they know your credit score, but point to that and then sprinkle in words like loyal and responsible, right, little words that make it sound like you're going to be a long term customer, not someone who's like a fly by night customer just snagging the sign up bonus and then mosing down the road. You want to make it sound like you're going to

use this card for years to come. And make sure to be nice too, because most folks they call uphen they're annoyed and they're like, hey, why don't you give me this card? And you put the representative on the back foot. What we'd say, you're not gonna get nearly as far with a bad attitude with with anger, So be kind to the person you're talking to. And yeah, but try to sell yourself to on on why they should reconsider and let you be their customer. That's right.

It feels like you shouldn't have to do that, but I mean it's probably the best thing for Lindsay to do. Movie. It's all a part of the game, you know, And it's a dance. Yeah, it's a dance. And she mentioned our credit card tool by the way, which is I mean, we're we're glad that you are liking it, when we certainly hope that other how the money listeners will you know that that they're finding it to be the easiest way to find the right card that's going to offer

them the best perks for how they approach spending. Will make sure to to link to that tool in our show notes. But it's how the Money dot Com forward slash credit cards. And she mentioned the City Premier cards specifically, which is pretty sweet. You know, eight tho points that is quite attractive, but you also need to make sure that you are handling the credit that you have available to you well, that you are not participating in spending

that you would not otherwise incur. But lindsay, we wish you the best of luck and we hope that gets you pointed in the right direction, and if that reconsideration line works out for you, let us know, because yes, actually I would love to know that as well. I've never I know it exists. I don't know anybody personally who has said, like I got rejected, but then I called and they were like, hey, it's all good, Yeah, we'll send it your way. So I'm I want to

know how this pans out. Yeah, and anybody else out there who's also called one of the reconsideration lens as well. It's not something that we have personally done, but we would love this. How about your boy? So Joel, let's get to our next question. This is from listener Phil who is asking about budgeting. Hi, Joelan Matt, this is Phil from Annapolis. I'm a long time listener and this is my first time sending a question. I'm working on

improving my monthly budgeting. However, I find it frustrating that no month is a normal month. In other words, something always comes up the bus busts my monthly budget. Any tips or tricks to avoid this issue. Thanks for your guidance. Keep up the good work, all right, Phil. First off, I gotta say I love that you're trying to improve

improve your budgeting. This is is one of those things where I don't know, we can all stand to get a little bit better, tighten things up, except for Matt, who's I don't know, probably the budget king, the self annointed. You're kind of like the Tiger King in a lot of ways, but you're the budget king, dude. This isn't Hopefully they can make it. Nobody's watching the Tiger Racing Netflix show about your budgeting endeavors. Well, but Phil, we

totally get what you're where you're coming from. Inflation, obviously, is is pinching the budgets of tens of millions of It feels like budgeting is harder in two than it was a year or two ago, especially with the absence of Stimmy payments sit in that bank account. It's uh, you're basically you're not alone when it comes to having

a busted budget. But we will give our best advice to you here so you can hopefully stay the course and budget effectively moving forward, even with kind of all the moving parts, all the things conspiring against you to make budgeting a little more difficult. That's right, Yeah, And so our first bit of advice fill would be for you to change how it is that you are mentally approaching budgeting. Can I call you Matt exotic? By the way, No,

you may not. I mean just between you and me, like yes, but not publicly all right, but phil Like, basically I want you to change how it is you're thinking about it. So from a mental standpoint, I want you to be less optimistic, because like, when it comes to budgeting, it's I think it's important to be a little bit like more realistic, like slightly maybe even pessimistic.

It makes me think about taking on home projects and how much time I allow for their completion because like, at this point, I've learned that whatever I actually tell Kate, like whatever I think it's gonna take, just multiply that by three. Have you told her that? Now? Do you? Do you starry? She knows it absolutely, She's like Matt is lying through his teeth right now, I'm just way too optimistic when it comes to the amount of time, because in my mind, I think, well, that's how long

it should take. But it's times two for the unforeseens, and in times three when it comes to actual clean up, just like the whole deal for for me, times four when it when becomes to lack of skills for like, yeah, the medical doctor's visit, just smashing your thumb and just for being born Norwegian, that's what happens. Like you're bad

at fix it stuff. You don't give yourself enough credit. Um. But when it comes to your budget, if you're if you're too optimistic, phil I think real life is going to give you a cold dose of reality and then you're gonna be dipping into your savings to make up for the spots where you spent too much, or even worse, putting it on a credit card that you can't pay

off in full at the end of the month. And so while optimism it's kind of like a good life philosophy, but when it comes to budgeting, I feel like optimism doesn't lend itself to an accurate, helpful budget. Yeah, for sure. My favorite quote and personal finances probably when Morgan Housell says, to save like a pessimist, but to an best like an optimist. There you go. I don't know that you could boil down the essence of how to think about money better than that. It's it's just sage advice, and

so what that looks like in reality. We would say to to kind of be that pessimist when it comes to saving and budgeting is to is to base your current budget on your actual recent spending. So we would say, take an average of the last three or six months of spending that you've engaged in phil to gauge what spending is going to look like for you moving forward. We don't want you pulling numbers out of thin air,

or budgeting for groceries based on hopes and dreams. Like we we want you to use recent data to inform what you're spending can and should look like moving forward. We definitely want you to take into account one off items or expenses to that you incurred over the past six months or so. It's it's important to have money set aside in sinking funds for stuff like car and home repairs that are hard to predict but that they're

certain to occur. Like you don't know, uh, necessarily when you need like a new serpent teinae belt or something like that. But gosh darn it, it's gonna happen one of these days, and so you gotta be prepared. You don't want that thing squealing on you. You know you don't. And so like, yeah, you know when an oil change is gonna happen, You're gonna have probably two of those a year, three of those years. I don't know. I drive less than the average person, so I have your

oil changes in the average person. But yeah, you know that those are gonna happen. You can budget for those tires. You know that's going to happen every two and a half to three years, and so you can kind of

start budgeting ahead for those things. But it's crucial to to base your budget, your your budget moving forward based on what your recent expenses have hand sure, and and the thing is too Phil didn't say how long he has been budgeting and keeping up with his with his expenses, but over I mean, I would say to like, the longer you are budgeting, the tighter it's gonna get, the more accurate it's going to be, and the more you're gonna be able to build in some of those sinking

funds because you're gonna have a just a better grasp all on when some of those different expenses are are gonna sort of crop up. But then, phil after you have that information, you're not just gonna sit on it, right, You're gonna take that information and you're gonna use that

information to then update your budget. And that's something you're gonna wanna do continually, basically, Like you don't want to create a budget at the beginning of the year and say, Okay, this is what my monthly budget is going to be. Fore it's something that you're gonna want to revisit, especially considering how the amount of money that we're spending on things has dramatically shifted over the past couple of years.

In the past years that was less dramatically awful. It's still probably probably could set it and almost forget it because prices were fairly stable. But that is not what we have seen recently, especially when it comes to the things like groceries and even just something as basic as

the cost of eggs. Yeah, if you kept your grocery line out and the same, you were just you're eating more poorly by the end of the end and you're at the beginning of the Yeah, and you can't assume that your grocery bill or even what you're gonna pay for car or home insurance like that, that is going to stay the same, which has become abundantly clear over the past eighteen months. Um, those line items will not remain static. Uh. These dynamic price says that we're experiencing

should lead to you having a more dynamic budget. And so phil as costs go up, you're gonna want to make some of these small tweaks in order to keep your budget relevant. Uh. And keep in mind too, I mean, most folks aren't going to have an unlimited amount of funds that where they can continue to kind of crank out the numbers when you know on some of the

different line items that they have. And everyone can be mad exotic, but once she was the TLC was Tiger King was was I don't know Netflix, I think of his Don't go Chasing Waterfalls? Well, no, I'm talking did you know the Learning Channel or whatever I think of the band whichever television network that you strike a deal with. Even those folks aren't going to have an unlimited amount of money that they're going to be able to work with.

And so you're gonna have to find different areas in within your budget where you're gonna cut back in order to make everything balance out as well. And so it's just important to find that balance between holding yourself to a specific number that you've identified that you you know where you do want to keep your spending in check, but at the same time, don't be afraid to make some small weeks along the way as you are seeing reality not necessarily match up to what it is that

you have written down the paper. Yeah, for sure, and it's true. It's just a reminder to the budgets are not a device for making your life miserable, even if that's how they often get discussed. I feel like that is something we want to reclaim the word budget, Matt. Don't we to a certain extent, we wanted to be about people like ensuring that their money actually gets spent on the things that matter. It's not about cutting back in every single area to ensure that you live the

blandest life possible. But I think that's often how budgets get conveyed. But when you have a budget, it actually gives you the ability the freedom to spend on the things that you say matter to you. That it allows you to cut back on the things that matter less and spend more on the fun stuff that you have. And everybody's idea or conception of fun stuff is going to be different. Mind is going to be more craft beer,

and it's going to be a two two turtle dove. Yeah, it's gonna be like this beer that we'd drinking right here. But on top of that, I would say, for Phil and for other people out there, you might want to use a better system that Matt. You like the old school Excel spreadsheet, which is totally fine, But we like Whineap a lot. We think that that's a great software that works well for a lot of people. It's worth the money for a lot of folks to pay because

they do more than just track your spending. Their goal is basically help you build a better relationship with your money. And so while it might seem counterintuitive to spend money on budgeting software, it's it's also a software that's proven to help a lot of folks. And luckily you can try it out free for thirty four days, so I

don't We'll link to that and show up. But it's one of those things where if your current methodology, the way in which you're interacting with your budget isn't working so well for you and phil and maybe that's causing some of the overspending because you feel like you're not able to check in on it, or you feel like it's not as intuitive as you'd like it to be. Interacting with a better user interface can be and with some software that's actually trying to propel you in the

right direction, that can be the solution for some folks. Yeah, in a small plug for or free Microsoft Excel or Google sheets. Maybe in Film's case, he isn't paying as much attention to his budget as he needs to write. And so I think maybe for some folks out there,

when they said it, they truly do forget it. And so that's one of the reasons why I like to go in there and manually entering my expenses because it helps me to keep a pulse on our family spending, which then allows us in real time to make small tweaks and adjustments to our spending. And you actually have a budget template that you use that you have made

available to our listeners relak to that in the show notes. Uh, because yeah, for a lot of folks who would say, yeah, I don't want to spend the money every single month to pay for wine app and I am down with manually tracking and that's the best way for me. Sometimes you just need a template to go off of. It's going to help you get started, that's right. Yeah, So we'll make sure to link to that's and Phil, we

wish you the best of luck. Joel. We've got a couple additional questions we're gonna get to, including a question about what might be the worst investment option out there for a lot of folks. Will get to that one plus another right after this. All right, Matt, we're back from the break. We're we're going to keep taking a couple more listener questions, and we are. In just a second.

I'm gonna take a question about potentially the worst investment option that is available to most people, and the listener and wonders whether his wife should participate or not. I'm guessing you might have an inkling of what our answer might be, but there's a lot of nuances involved too. But before we get to that, Matt, let's take this next one about medical bills. How to pay for them.

Hello boys, this is cyber dude. I'm having surgery and after insurance, I estimate I'll have around four thousand dollars that I may have to pay over time. My doctor's office at care Credit would give me eighteen months to pay with no interest, which I could handle, but some of the reviews are pretty negative and talk about hidden fees. My credit score is around seven fifty. Should I go with care Credit, put it on my on credit card or dip into my savings? Thank you man. I love

hearing from cyber dude. He's our. He's like a v I P. When it comes to listener questions like have we taken one other question before? Of course he's got the voices, unforgettable, the tone and canber cyber cyber dudes work on his larynx? So I'll do. Don't make comut of him. What if we know? Yeah, he's protecting his identity and so punches it into the computer helps them to maintain that anonymity. But let's go ahead and get to the heart of cyber dudes question, which is paying

for medical expenses. I mean we actually we so we talked about budgeting right before the break and healthcare expenses. Those should totally be a meaningful part of your budget. You should have enough set aside to handle the max out of pocket that you might be responsible for paying

based on the medical coverage that you've chosen. But that doesn't mean, cyber dude, that you can't op for a nifty payment plan if it allows you to perhaps spread out payments over time, although, like you said, those often come with some massive potential pitfalls. And so this isn't We're not giving you free permission. This isn't a slam dunk. Say we know what we're saying. Oh yeah, absolutely, take take advantage of the surgery now, pay later by now.

But you know, like like we're seeing that in multiple realms of life, not only when it comes to consumer spending, but also within the medical industry as well, And so you do want to make sure that you're being careful

with that, for sure. Yeah, it's it's something like it makes me think of if someone could get a zero percent car loan on a vehicle they want to buy, but they already have the cash on hand to pay full freight, right, They've got the twenty to buy the car they want, But then at the dealership, they said, with no additional if hands or butts now, but we cat we got a zero percent right for you. So keep that money and invested instead while you're paying monthly

payments for this car loan. That's okay to do, right, That's like kind of like optimizing its arbitration. There's nothing wrong with taking that approach. And that's kind of what cyber He's talking about here, is, well, what if I do the same thing with a payment plan that a

hospital offers. They're gonna give me zero percent on this junk for eighteen months, and so it might make the most sense for me to take advantage of this payment plan and keep my money, keep my cash on hand for you know, who knows what else could come along if if only these plans didn't completely suck, if only they didn't have a lot of other pitfalls and minds potentually that you could step on. That's the problem in

the process. And NPR just ran a piece about some of the payment plans that hospitals offer their patients, and they sound pretty good on the web page, right. It sounds nice that you can get help and get the care, to be able to get the care that you need and financially speaking, you can pay for it over time,

no problems, right, how nice? It sounds nice at least, but millions of folks around the country have signed up for one of these plans and they have found that they're paying not single digit but double digit interest rates for the medical or dental care that they need, often thanks to the fine print in those financing contracts, and

and the numbers are are shockingly awful. Something like fifty Americans currently have outstanding medical debt, which is insane, and then a quarter of them are paying interest on that debt, which makes it even worse. And these payment plans are a huge culprit. They're a huge part of that reason because a lot of people think they're signing up for something where the fine print actually turns on them, and something that looked good, looked appealing at first clients now

is eating away their personal finances. Right, Yeah, So what should he do though? Uh? And first of all, I'm glad to hear that you've got money in savings in order to pay for this procedure if you wanted to. We're not talking about needing a line of credit because of an inability to pay here like we're talking about

making the just the most financially optimized decision and care credit. Again, it sounds decent, but at zero percent interest rate, isn't all that great if it comes with annoying or hard hard to find, pesky you know, monthly fees. These are little bits of information that you're gonna want to verify in advance, and then you're gonna want to make sure to pay that loan off way before they start charge arging you interest if you opt to go that route. Uh.

And so I think he's did you mentioned eighteen months? Uh, like an eighteen month period that you have to pay that pay that off. Don't even skirt with eighteen months. Maybe pay that off like an extra three months early. It's like canceling a free trial the day that it expires. I'm like, no, no no, no, it's like when exactly does the clock strike? You know? I do it like a week and half in advance, always on the Google calendar.

I said, okay, yeah, so if if it's like a one week trial, I'll do like one day in advance, but I never skirt with the actual day. If they're they're like, oh, it'll be the sixteenth, I'm like you better believe it's gonna be during business hours on the fifteen. Yeah, well, even after you canceled, typically they let you have the rest of that window that you paid for. So I'm like, all right, cool, I just want to make sure I'm ahead of it and I don't forget. It doesn't escape

my mind. And you're right, like you for like, Man, you've got the best of intentions to pay off this care Credit loan within eighteen months, but man, it just slipped your mind and dang it, you got into month month nineteen. Well you could be in a world of hurt with interest rate. That's interest, it's rack up over

time that now is on you. And one felt exactly And that's what the review show as well, because i mean, based on all the reviews that care Credit gets from folks who have used them, there's actually I mean, in the end, there's no way that we would go this route.

There's no way that we would even play with fire in this case, because it sounds like the hidden fees that like that they are basically the rule, they're not the exception, based on just a preponderance of user complaints, based on the actual experiences of folks who have given care Credit a shot. Yeah, so I feel like, yeah,

if you play with fire, you're gonna get burned. And signing up for one of these payment plans that sounds so nice on the front end, for so many people get taken on the back end, And it's not something I would even I would even give a shot unless I was literally behind the eight ball had no other choice, which is not the case for cyber dude. He has other choices, and and he even mentioned potentially paying with a credit card, which is probably the best option here, right,

This could be a great route. You mentioned having a singular credit card, though, so we wouldn't necessarily recommend you use that card for once that's your only revolving line of credit. There's a decent chance that you you end up maxing that puppy out, which isn't great for your credit score. But in addition to that, especially since we're talking about a four thousand dollar expense here, you could literally snag a significant sign up bonus in one fell

swoop right with this one purchase. So, assuming you don't have ongoing spending problems, we'd say suggest like, maybe you find a new card that has a great welcome offer add that card to your arsenal first, and then use that new card to help you keep your utilization low moving forward, and get the sweet bonus on top of it. So it's win win scenario. Yeah. Yeah, it's because you are going to spend down your savings and we want you to build that up rather quickly after the fact.

But this gives you at least a little bit of extra time and a little bit of a monetary bonus for just based on the method of payment you choose to use to pay for this medical procedure. That's right. And again, cyber dudees got the cash to pay that balance off in full once the bill arise, And so he's just in the best possible scenario, he's just funneling that spending catbird cy to Some might say that's right. Yeah, he's just you know, shuttling that money through that credit

card and then just reaping the rewards. Uh. And so yeah, if the the hospital or the medical office, if they're not going to charge you any for you used to pay with plastic, I would say that that's totally the way to go. And cyber do we wish you the best of luck with this. We hope it's that's right. We hope it goes well and that you were able to recover quickly and that you, yeah, don't get financially

screwed over in the process of getting this done. That's right. Okay, let's go ahead and get to our last listener question of the day. Joel, this is the one about perhaps the worst investment that's ever existed, and I'm not even talking about beanie babies. Let's hear it, Hey, how the money? This is calling from San Antonio, Texas with a question on variable annuities. My wife works in the nonprofit field and her new company had a presentation on their four

oh three B retirement plan. The only option for the plan is a variable annuity through an insurance company. Though the money can be in invested in an index fund within the annuity, they have high fee structures and it's hard to roll the money out of the plan. My wife is twenty six and it's likely she'll have other jobs before retirement. But our current company will match up

to four percent of contributions to this plan. I have a ROTH four O n K, which I contribute ten percent of my salary to and get a five point five percent match. We max out a roth IRA for my wife. Um I also have an IRA, but we won't make contributions to that until there's a little bit more income in the picture. In a normal month, we have about one thousand dollars extra income above our budget and needs for bills and savings. So I think variable

annuities are bad products and most circumstances. And I think good financial products don't need sales people to pitch them. But my question is, even if a variable annuity may be a relatively poor financial product, does it make financial sense to consider it at the four percent contribution match level in this case? Let me know your thoughts and thanks. Love the show, all right, Matt, let's get to it. By the way, I cannot believe you just harangued the

investing prowess of beanie baby investors. I think they. I think I could have called out crypto or tulips. It's way better than crypto. Let's be honest. My little sister, I think still has a been of old school Beanie Babies and she needs to wait until they come back and sell them. It's gonna happen at some point, and there's gonna be a renewed focus I think on Beanie Baby's days. But they're not gonna make you rich. But let's talk about something else that won't make you rich,

and that's variable annuities. Yeah, so we don't talk about them much on the show. And and they're inside of Colin's wife's four or three B plan. And four or three B plans can be all right, but there are also a lot of crappy fees as well in many of these four or three B plans, which is the problem that we have with many four or three B plans in existence. But so much comes down to the

investment options that are available to you. And the reality of that is that, especially for public school teachers K through twelve public school teachers, the options are subpar, and they often like they stink so badly because the fees and the fine print are so ridiculous, Like our K through twelve teachers are largely being taken advantage of by having much fewer options and much worse options in these accounts.

And you've had a tough nut to crack here, Colin, because specifically the fact that your wife's employer is offering a match that's what makes to some more difficult questions to answer, because let's say there was no match, Matt, we would say skip it all together. Sock more money in the IRA that you're not able to contribute to right now because you don't have enough enough dollars hanging around.

Just yeah, money is fungible, and just allocate some of those dollars instead of in her retirement account there over in your roth IRA or whichever accounts that you're not fully funding yet exactly because the options are so bad in this account. If if in fact the variable nudity is really the only place that she can invest inside

of this account, that's a problem. But the availability of the match of compounds the problem makes it a little more nuanced and and ultimately this is gonna be come down to math, right, It's gonna be a math problem. But let's make sure that you know what it is that you need to pay attention to as you're trying to decide if this four oh three B is going to be worth it, if it makes sense for your

wife to contribute at least up into the match. I will say, before we even get to that map, there is no need and there is there is no sense in contributing beyond that match. Level four. So that's that's definitely the most that you should be contributing exactly. I mean, the only reason we're having this conversation is because there is the match, just like you said, like, if that match didn't exist, we would not be having this conversation.

And the reason for that is because there are so many downsides to investing in this variable annuity, uh, and the biggest downside is likely the insanely high fees that come with these investments. This high fees will eat into the investment returns that your wife would hope to garner by talking money away into that four or three B according to four H three B wise, which is a fantastic resource like a nonprofit helping teachers in particular nonprofit

for the nonprofits on there. But according to them, according to the research, the typical annual fee on a variable annuity is three That is insane. You compare that to a Vanguard SMPF that's got an expense expense ratio of

point zero. There is such a disparity between those two figures that I just mentioned, or even just think about Fidelity and they've got some e t F so obviously that have that are completely free that don't don't have any expense ratio would be like me are wrestling Sylvester salone in the movie Over the Top, how quickly would

I lose? Like that? It's it's not even a match, right, Like it's or like our or him like anold Schwartzenegger or somebody like Sylvester slone like almost like a baby, like, yeah, you're right, probably what's that? Like I'm almost this week? Is it? Maybe not? Like yeah, yeah, you've got you've got some muscle mass. But it is also important to watch out for surrender charges as well. That's something that you also see associated with these variable annuities. Those can

be pretty significant. Uh. And some of the some of these different annuity contracts, they can have surrender periods as long as ten years. And so what that means is that if your wife we're we're looking to move on to a different company, she could be forfeiting a large percentage of her total assets. Oftentimes you're looking at something between five to seven percent of that little nest egg that's going to get eaten up right away. Uh. This probably should be illegal, but sadly it is not. It

is costing. Again, like you said, Joll not just nonprofits, but especially a lot of teachers out there. It's costing them a lot of money. And a lot of school teachers do have options outside of just annuities, let's say, inside of their retirement plan, and they could stick money in something like an SMP five fund. But even those funds inside of these teacher retirement plans are often ten times the expenses as a Vanguard fidelity fund. Uh. Still, it may not be, may not be one hundred times

is bad? Right? Right? Maybe it's just ten times this week exactly. Yeah, this would be a much better solutions. Still crazy, but it sounds like Colin's wife doesn't even have that choice, which is just a travesty. It's a crying shame. And I would be upset to the point of like writing people trying to get this fixed. I would. I would, because this is it's not right, it's not okay.

And so yeah, with without knowing how long your wife plans to stay at the company, it's going to be difficult to know whether or not it makes sense because you mentioned that she would likely move on from this

position at some point. One option would be to try and get the best of both worlds, to get the match, but then look to see if there are You mentioned there aren't, but what if there are other places she can investor even save some of that money instead of sticking it into a variable annuity within that four or three B is there a money market account for instance, that could be better snagging the match, getting the money in there, but not investing it yet because the investing

options are so terrible. And then you can always roll that four or three B over into a traditional I ra A once she leaves that job, and then you can start investing those funds. Right, It's it's a good idea for your wife to push for better options to like I was just saying, like, it's not just her who's getting the short end of the stick here by

not having access to low cost investing options. You know, if or her I'd reach out to HR and started asking some questions, I'd start pushing the envelope to see if if there is a way in which they can have better investing options at their disposal, because right now it sounds like everybody at this organization is getting ripped off, and the if the organization, maybe the organization, maybe the folks in charge don't realize just how poorly they're serving

their employees. Uh, and somebody has to bring that to their attentions. And I would say, since you know what's going on, you have the ability and the duty even to reach out and to make some suggestions and to reach out and talk about mentioned four or three B wise. Those folks will will help walk this organization through picking a better plan that's going to be more suitable and

lower costs for all the folks involved. Yeah, and you mentioned the four three B wise website, but not just the actual website, but they've got a great Facebook group as well. That would be a great resource, a great place calling for your wife to soak in some of that four or three B wisdom, start asking questions like a people in there have been dealt with crappy four or three B products who may have been in very similar situations that she finds herself, or maybe the exact same.

They might say, oh, oh, I know this provider, well, and it's really bad and here he actually they have this one option or actually here's how you go about trying to get things changed where you work. Yeah, and you know it's worth pointing out to one one final

note here, Perhaps not all annuities are bad. Like some of them are going to make more sense for individuals in particular as you get closer to retirement age, but annuities are almost never a smart deal for the folks out there who are in the wealth building phase of

their lives. In that case, you want to make sure that you are you know that you have some investing options available to you, especially where they're not charging you in arm and a leg just for the privilege of being able to invest with what is most likely an insurance company that is not who you want to be

with for sure. Yeah, and it just sucks that that's the option that she has, and the tax advantaged option with a match that she has, because typically, you know, you want to take advantage of a company match, and there aren't many reasons why you would avoid that unless potentially you're not going to be at that in layer very long and the surrender charges and the fees that come along with that variable annuity make it just prohibitively

costly for you to do business there. And so yeah, it's not the easiest answer unless we're looking at your paperwork with you, But hopefully that points you in the right direction, all right, let's get back to the beer that we had on this episode, two Turtle Doves by the Brewery. Yeah, what were your thoughts on this Belgian style ale brewed with orange peel and spices. So what's crazy is I scoured the label looking for any descriptive of this flavor that I not only smelled but tasted,

but I am picking up major banana notes. I don't know about you, but like when I cracked this thing open and gave it a sniff, I couldn't get past thinking, this smells just like a strawberry banana smoothie, like like like an odd wala or some of like the naked juices or whatever, like a lot of those have banana in them, and I one hundred percent and tasting and picking up on some of those banana ethers. I don't know.

I don't know what it is, but for for whatever reason, just the combination of flavors, uh, definitely make me think that. But yeah, I mean it's good, it's it's definitely delicious, makes you kind of gets you nice and warm inside, makes you think of the upcoming holidays. But I what

do you think My thought was? It's beginning to taste a lot like Christmas when I drank this, because it's got that gingerbread, a little bit orange peel action going on, maybe nutmeg, like, it's got some of those Christmas spices thrown in, so it feels like, uh, you know, mid December, this is kind of the perfect beer to be drinking. Um. I thought it was tasty. It's the brewery makes so many good beers. I mean, I can't say it's one of my favorites that I've had from them, but that's

also because I've had so many because the others. But if you're into and you're wanting some Christmas vibes from a beer right now, those are a great way to pick up for sure, to split with a friend or two, and super easy to drink too, especially if you are not like he is talking about different I p a s and you're thinking, yeah, thanks, boys, I p A s aren't for me. This is basically the opposite of that.

A lot of darker like brown pastry notes. Uh, plus a little bit of banana actually makes me think of banana bread. Oh man, that's that's totally like a brand, like a rum soaked raisin banana bread mash up. Throwing a touch a fruitcake. Perhaps there's a lot of that going on. Yeah, definitely. So if that is what you're looking for in a beer, check out two Turtle Doves by the brewery. All Right, that's gonna do it for

this episode. For folks who want the show notes, including the links to some of the stuff we mentioned, Matt's budget template included, we'll have that up on our site at how to money dot com. That's right, but Joel, that's gonna be buddy for this episode until next time. Best Friends Out, Best Friends Out,