Welcome to How the Money. I'm Joel and I and Matt's and today we are answering your listener questions. That's right, Joel, We've got a listener question Monday episode lined up for folks, and we've got five questions that we're gonna answer on this episode, including some ways that you can maximize your savings. We've got some grad school considerations that we're gonna talk through, as well as ways to avoid capital gains tax when it comes to selling uh some real estate. So we've
got those questions plus two more. But first, man, we wanted to talk about software on your computer. Doesn't sounds so exciting. So recently we talked about how I had avoided updating the iOS on my computer for like multiple years in order from my old school Microsoft Excel to continue to work, right, because with an updates, I knew
like that legacy version wasn't gonna work anymore. And we basically talked about how that was cheap, right, it was a cheap move to avoid the software patches, bug fixes, everything else that accompany a new software update. However, listener, Scott, he reached out to us and mentioned how we need to check out Libra Office. Had had you heard of Libra Office before he sent that email. I had not, But when he sent the email, he said that it was the newer version of Open Office, which was now
defunct I think, right, or yeah, it changed or something. Yeah, and I remember open Office back in the day, but I totally forgot that Libra Office was the thing. Yeah. So this is an open platform software and they basically have all the different apps, all the different programs that you would typically use when you get like Microsoft Office or three whatever they're calling it now. Like they've got their document program that's called Writer Document and their equivalent
to Excel is called CALC Spreadsheet. So I love how they've got it's totally white label generic names. But basically they are like old school versions of Microsoft that I mean, it's open source and so they've written it to be able to you know, it's compatible with newer Excel documents, like you can open the file formats that are that you currently use with you know, Word or Excel. However, it's not a Microsoft program and so it's open source. Uh,
it means other folks keep up with it. And best of all, of course, it is completely free, so you can avoid paying you know, like what we talked about was paying that annual fee, uh that one time once a year cost to get a little bit of a discount, or you can go full on free avoid paying that altogether. And when we got that email from Scott Matt, you were like, all right, give this the shots. He immediately jumped on. I was like, what is this? What is
this magic? And anywhere near is good? And you felt like it was definitely better than like the Google version that you were using, right yeah, I mean yeah, So what's great about like one of the great things about at least about CALC Spreadsheet is that you can, or in the whole platform too, you can create shortcuts, uh. And that's one of the cool things that you know, where you're bits, like say you are using like Google
Sheets or Google Docs things like that. There's only so much that you can do within a web browser, right, but I love how you can go and create these shortcuts. You can create customized key strokes within these programs, and so you can get it to perform, you know, exactly like Microsoft Excel or even better, you know, you can kind of tailor fit it to to what, you know, whatever your specific needs are. Uh. So yeah, I just actually checked it out and I'm gonna definitely give it
a go. Man nice all right, well yeah, if you can cut it down from eighty bucks a year to free, that's uh, that's what I'm saving. So host fig thanks to Scott for sending us an email. Now, we always learned from our listeners. I love that I learned from listeners. In the Facebook group, we get emails I feel like multiple times a day from listeners who have different suggestions and like, hey, dummies, what about this? And it's helpful because you know what you and I we don't know everything,
not even close to it. And so it really does take the how of money community to help each other out. And those listener emails help a lot. They really mean a lot. So thank you Scott and other people for reaching out whenever we're wrong or we just like don't know something. All right, Matt, let's mention the beer that we're having on the show today. This one is called
Seven Deadly Stounts. It's by Monday Night Brewing. They are around the corner from us, one of our favorite local brewers, and this is a particularly special staut that they brewed, and we're excited to have this one on the show today. Yeah, this is normally the kind of beer that we would have like on a really special occasion. So I don't know why we haven't cracked this thing open yet. Uh that I am really excited about sharing our thoughts on this beer at the end of this episode. Let's do
it right. But for now, let's get onto the listener questions. And for folks that want to ask a question on any future on an upcoming Ask How the Money episode, just go to our website how to Money dot com slash ask. There are simple instructions there so you can submit your voicemail question and we hope to be able to take it soon. And Matt, let's get to the first one for this episode. This is from a listener who is trying to decide whether she should go to
grad school abroad or stay stateside. Hi, guys, my name is Natalie. I'm twenty one and I'm from Central California. I'm graduating from UC Santa Barbara at this spring with no loans. I'm now deciding on to grad school to get my master's in public administration. Right now, my choices are between a two year program in California that costs about forty dollars before housing, or a one year program in Ireland that costs about twenty dollars after housing. This
is my first time taking out loans. I'm concerned if I go abroad I won't have as good of an opportunity to network in order to get a high paying job back in California. But I'm also worried about taking out of forty loan. I studied abroad, so I am familiar and comfortable with the process of moving to Europe. But I don't want to miss out on networking if that's going to be the best decision career wise. I'm excited to hear what you guys think, so let me
know in cheers. Natalie thinks so much for that question, and by cheers you actually mean Slancha, right. Yeah. Ireland is actually the only trip that Joel and I have taken abroad together. This is back before we had kids. Man, it was so much thinking, fun, beautiful country. Like I totally see myself going back there one of these days. The pub culture is wonderful in Ireland, so so much fun,
live music. I mean, these are all things that I guess probably have been on hold, you know, for the past year, but I'm guessing that they are probably ready to fire things back up. But so you know, we'll try and not let our personal bias influence how we answer your question. And also to congrats on graduating with no loans and on continuing your education as well. Yeah, let's talk about loans, Matt for for just a second longer.
On that note, this is a question I think for Natalie where she's going to want to be frugal and not cheap. This is something we've talked about with higher education before. I think, you know, obviously there is a student loan epidemic almost in this country right with with how they've got out of hand, and a lot of people owe so much money when they graduate from college, and we want people to avoid that, right, We want people to be smart about taking on college debt and
not take on too much. But broadly speaking, when it comes to the cost of higher education, spending money now that will lead to advanced opportunities in the future isn't wasted money. And uh, I think it's healthy for Natalie had to have that uneasiness that she has about student loan debt, but also it's important to think of it instead, is money going towards increasing your human capital, which will
pay dividends for decades to come. Although opting Natalie for that California program it doesn't necessarily mean that the increased costs are going to lead to more opportunity or greater pay in the future. It's kind of hard for Matt Night to really know without having, you know, a few
more specifics. Yes, that is right. And something else to consider too, Natalie, is that, uh a two year program in California that costs forty thou before housing, Like that could end up costing you closer to sixty right, which is our seventy maybe? I mean yeah, seriously, And if you look at it that way, like that's closer to a forty thou dollar difference. Ireland is is one of the greatest spots on planet Earth, so going there while also getting the smaller price tag sounds pretty good in me.
And you know, one of the key bonuses for opting for Ireland instead is that it's a one year program, not a two year program, And so this means that you are going to be on your way to launching your career and making money a whole year sooner, less money spent out of pocket and earning money sooner Like that sounds like a great combination to me. And another thought too is you know she's talking about networking, right how that's kind of like the biggest downside to going
to Ireland. But if there's something that the pandemic has has taught us, I think is that there is so much that we can do from home in our sweatpants. Is I think if she wants to kind of you know, start that networking while she is abroad, so much of that can be done from the computer. You know. I think she could like start writing a blogs, you know, maybe start writing for other publications within the field that she's interested in, you know, launching herself into, and then
just start sending out cold emails basically introducing herself. Uh, it's just gonna be a way that she's gonna allow herself to stand out. I think then just subscribing to a program, to your program in California, you know, like the grad who's in Europe in Ireland studying abroad. Like, to me, that's way more interesting and I think that's a great way to to stand out as well. Yeah,
my friend Kim who was looking for work. She started just to kind of introduce herself to people on LinkedIn, and dude, I can't tell you how many calls that she set up, not even just like messaging back and forth or emails. It was like phone calls that people were like, Hey, let's go on the phone and chat. And yeah, So I feel like networking online is one of those things where people are craving human connection, even
if it is just virtually. And so, yeah, I think you're right that the pandemic has taught us that we can network virtually, and and so I don't think, um, if you're intentional about it, that you're gonna be losing much in that regard. And not only I think you're you're gonna want to make that call. You know, your decision based on a number of different things, many of
which Matt and I aren't privy to. Here, is it the connections that you're worried about missing out on, or maybe just that degree that you'll receive from a university in California look better to potential employers because that's something the factor into Can you use that maybe additional year to gain some valuable connections and work experience at the same time, and uh, again, don't be cheap when it
comes to this decision. But also don't assume that more expensive equals more connections that's going to result in more pay Just because you're on site in California doesn't automatically mean that there's gonna be mixers going on that you're gonna be invited to where you get to show up and start, you know, shaking hands. I think that there's you know, we're probably gonna see more of that this fall, but I don't I can't imagine it's going to be in full force like it was pre pandemic as well,
So I think that's definitely a consideration as well. Yeah, but Natalie, either way you go, you're in a strong position right now by not having any student loan debt. So best of luck as you move forward. And hopefully Matt and E's thoughts helped at least a little bit. But we got more questions to get to, including a listener who's worried that credit card debt might creep back up in his life. We'll get to that one right
after this break. Al Right, we are back from the break, and we're gonna get to a question here soon about where to put some retirement money. But before that, let's get to that one, Joel that you mentioned about credit card debt kind of creeping back into this guy's life. Hey, guys, thanks so much for the podcast. We look forward to it every week. You've definitely helped me clarify law I thinks personal financial, giving me a strong action. Currently, I'm
twenty nine years old. My partner and I are saving up for a house we'd like to purchase within the year. I just finished paying off twenty six dollars in debt. In the process of paying off the debt, I had closed a credit card. I noticed when I closed a credit card, my cardit score dropped about eighty points. Then I listened to one of your episodes where you discussed how useful and tac talent credit card can be one
purchasing a host. I panicked, applied for another credit card, and got another credit card, where my credit card dropped again by about twenty points. I'm now worried that my old habits might creep in and I'll start spending on the credit card and carry a balance on it. I'm not sure if I should close it or if I should just hide it and put it away and keep on track with my saving Let me know what you think.
Thank you so much. Anything can contribute will help. By the way, that question came from a listener named Matt, so he must be cool like my best buddy. Thanks. Do you think we get more questions from Mats or Mats for sure? Really? Well, it's just like a more common name. Yeah, it's kind of like John or nearly as many of us Joels out there, sadly, But Matt, congrats on the strides you've made it. I think it's too. It's definitely important to celebrate the debt payoff accomplishment that
you've made. Being able to pay off twenty six dollars of debt is a huge sum of money. That's big. Yeah, it's worth celebrating with a nice beer or something like that. Seven Deadly stouts if you get if you can get your hands on one, yeah, already, I'm gonna tell you. I suggest it. So it's so good. But let's talk
about why your credit score is so important too. If you want to buy a house within the year, Matt, closing cards is gonna crush your score and could cost you potentially thousands in interest over the life of the homeland that you're gonna get, and it could make that loan harder to get in the first place. And that's because credit scores are a bit convoluted, as we talked about Matt on the show. They're still massively important, though,
even though they're kind of weird. Lenders are less concerned with the fact that you just paid off twenty six dollars in debt. They're not going to look at that and be like that guy, he's good with his money. We're gonna trust to make give them this home loan. That's just they have their their proprietary systems, that's how it works, and they're not factoring in how much debt you've gotten rid of in recent years. It's pretty dumb. Yeah,
it is. They're more nervous about your credit score dropping, and they're less enthused by the fact that you just got rid of a bunch of debt, and that, in their mind, actually makes you riskier. The fact that you have a lower score even though you have less debt, which you know, Yeah, like Matt said, it doesn't really
make all that much sense. Not how I would have devised the credit scoring model if it were up to me, Yeah, and you can't find some lenders who will actually take that into account, Like they'll do a manual underwriting where they look at all of your information, they'll see what you've been doing, and they'll kind of recognize the good behavior that you have exhibited. Right, But Matt, we we understand your desire to not go back in your credit
card debt. Like, we're totally there with you. You You know, credit cards are, like we think, the best method for spending, but only if you use them properly, if you avoid maintaining balances. Uh and uh, you know, if you don't let your spending get out of control. But your instinct you know, to hide the card maybe and provide some behavioral barriers to using it, Like we we feel that as spot on. And so you know, we've talked about
this before in the show. But literally putting your credit card on ice, you know, by putting it in a zip block bag full of water, can help prevent some
destructive usage of that credit card. Also, too, there's more practical, maybe digital steps that you can also take by you know, doing something as simple as deleting your credit card information from from sites that you regularly use, you know, or deleting it from auto fill within your browser, basically any steps that make it more difficult for you just to hop on somewhere and make it purchase digitally. Yeah, and I think it's too man. It's worth including your partner
in this. Right, you mentioned Matt that you're saving up for a down payment with your partner. We'll see if you can enlist the help of your significant other to help keep you on track. Also, if you're lucky, your partner is more of the money nerd, and if so, you have some built in accountability there. And even if it turns out that you're the money nerd who likes to spend, you can use your credit card for maybe like one or two recurring purchases like a power bill,
and set them to out o pay. That way, the credit card remains active and helps your credit score. Even if you literally have like stowed it away inside the freezer, making it inaccessible to use on a day to day basis, it's still gonna be helping you out, and that's what you really want. It's not necessarily that you have to use your credit card for everything that you purchase, but it is having that credit card active using it regularly. Uh,
even if it means you're not actually physically using it yourself. Yeah, just like the picture of the credit card in the bag of ice sitting there next to the audi ice cream, still doing its work even though you don't have to touch it. It's so good. Uh, it's a matt You know, it's crucial for your credit score to recover before you purchase a home. You know, like this could mean quite a big difference in the rate that you qualify for
as well as your your monthly payment. And so keep an eye on your credit score and make changes based on what you see. And you can do this at a site like credit carma dot com. Oftentimes different you know, the different credit card companies online, when you log into the dashboards will have a little link there where you can see your credit score. There in credit CARDA specifically has this helpful score cards section that gives you a
peek into what is specifically hurting your score. This is really important, but at the same time, we don't want you to stress out. You mentioned how this is a move that you want to make. Probably within the year, you can rebuild your credit score, you know, forty points by you know, you took to twenty point Ding's that's that's not great. But at the same time, you should totally be able to build that up when the time comes for you to sign up for a mortgage. Yeah,
Matt's gonna get there. He's on his way. Just a couple of these tweaks to how you're handling those credit cards, Matt, and you got this. You got it licked, and you're gonna be able to get that mortgage. You're gonna get a great rate. I've got all the faith in you, man. All right, man, let's get to the next question. This one comes from listener Corey, and he wants to know where should he put money that he's investing for retirement. Should it keep going in four one k or is
there a better move he can make? Joelan Matt love your podcast, Love all the information you guys are providing to make us all a little bit better financially. My question is regarding retirement accounts and where best to put your money. Currently, I work for employer that provides a four percent match when you can I contribute even to my company, and I'm trying to pick up every dollar
I can for retirement. I started thinking about this when listening to you guys about where best to put my money.
My question is is it better to pick up the match at your employer's plan and then put additional money into a roth Ira and espousal ira until they're maxed out and then go back to your employer's plan, or is it better to just contribute to in your employer's plan four oh one K plan, that is, until you max that out at the limit, and then if you can put additional money into a roth Ira or spousal ira. I should note that my company does provide an hs
A plan which I do contribute to. I'm just determining where best to put my money whether it be in the roth ira accounts or in the rath pour oh one k accounts with the company after a meet the five percent match. Really appreciate your input, look forward to your response, and I definitely look forward to future podcasts and wish you guys continued success and all you guys
are doing. Thank you so much, Corey, thanks so much for those well wishes, and we are glad that the information on here on the show has been helpful for you and your money. Let's go ahead and dive in. Let's start with the the kind of the most basic thing here. Let's talk about your match, right, it should continue to be your goal to to get that employer match. Since you're putting in eleven with the four percent match, you're investing of your pay. That is awesome, that's so good.
But you know, if you can't do all of that, I think for some it might be be tough to say that much of their income dial back that four win K to full match status only for the time being, bringing your contributions down to five percent of your pay to get that full match first. That'll be worth it because at that point then you can invest in some even more tax advantage ways that we're going to now get to. Yeah, like the h s A. Right, Corey mentioned that he's got an h s A and it
just slid it in there. Maybe I should just like let you guys know that I have this and Corey, that is you know a place we would encourage you to invest more of your money. So with those extra funds, as you pull back your four O one K contributions, put that money straight into your h s A instead and seek to max it out if you can. If you file taxes married filing jointly. The max you can put in in a year is sevucks. That's a that's a chunk of change, right, Matt, that you can start
investing for the future. So hs as really are best if you use them as long term investment vehicles. A lot of people use these as a way to put money aside and then pay for medical expenses in that year, the very year that you put the money in. And you know, that's which makes sense because it's called a health saving his account. It's like, oh, this is for my health, right, but let's let's let's talk about your
health down the road. We if you're listening to this show, you should think about it more of like a health investment account, right, you know, and because that's what it's really best at doing because of the way it's treated when it comes to taxes. So we would suggest that you check out your investment options that are available to you inside of that employer hs A plan, because if you can invest that money, letting it compound tax for
you for decades, it's gonna be huge for you. And if you want to know more about the h s A, Matt and I we did a deep dive back in episode one oh five. There are just so many advantages to putting more of your investment dollars there as opposed
to keeping them directly funneled into your four owe k instead. Yeah, and Corey he kind of mentioned there towards the end how his four O one k is actually a wrath for oh one k. And so sometimes, you know, we advise for folks to kind of diversify their tax liability, like it kind of makes sense from a diversification standpoints to say, all right, I'm gonna make some some pre tax investments. Now I'm almso gonna make some post tax investments.
And so basically you have some funds in the future that you'll need to pay taxes on because you took the tax break earlier. But then you've also got the flip side because we don't exactly know where tax rates
are going to be in the future. However, all that being said, tax rates are at historical lows, and so because of that, even though you have a roth floor one k going on, I think we're still gonna point you in the direction of not a traditional ira, but a roth ira, right, and so we feel that this is uh the next best bet after the h s A. Obviously, you know the max annual contribution there's six thousand dollars each for for both of you, for you and your spouse,
and if you fully fund that, then you can go back and increase your four one K contributions up to the annual limit of nine. Getting to the point where you can do all of the above. It's a steep climb, but going in this order, we we feel that this makes the most sense from our perspective. And yeah, Corey, we wish you the best. You've got kind of like an audacious investing plan laid out before you, but it
sounds like you're on the right track. Yeah, it's really hard to do and all of the above investing strategy like backing out all those accounts and that and then this and then after that do this. That's really a high bar, you know, to be setting for yourself. Not too high for how the money listeners. Yeah, I think a lot of how the money listeners, so they are looking to, you know, go that extra mile when it
comes to their investments. And if you can doing all of the above, you can get the match contribute in max out in h s A and then max out ross. I mean that's that's huge. You're like, well on your way to financial independence if you are taking that you know all the above strategy. Seriously, Corey, keep up the good work man, keep making it happen. Are We got a couple more questions we want to get to, including can you avoid capital gains taxes when selling at home?
We'll get to that and more right after this break. All right, now, it's time for that question about capital gains and specifically, uh, this involves some real estate. Hey, Matt Angel, this is Marie from Utah. I found you guys back into That's the nine Team when I was looking to best within my TSP and I've been hooked
ever since. So this is a little bit involved. About four years ago, we sold are almost fully paid off investment property a little bit of a loss so that we could buy my brother in laws proper that is next door to our current home while he was going through a divorce. He's been renting it from us, but would now like to buy it back. We bought it for around two hundred and fifty it's now worth around
four hundred thousand. We owe a hundred and fifty five thousand on it, and we've been depreciating it every year for around eight thousand, three hundred. We aren't looking to invest in another rental property at this time because of how the market values have increased, and honestly, nothing would be as great as having a property next door, so we still want to minimize capital gains as much as possible.
Our current ideas are to max are two traditional TSPs as much as we can, to max the traditional IRA, and to donate some We are kind of stumped on what else to do. We also aren't really sure what else to do with the rest of the proceeds. Since we do have a fully funded emergency fund, we'd be maxing our retirement funds, and the only other debt we have is our own mortgage, which we will be refinancing at a two point three seven five Any ideas would
be awesome. Thanks Marie, Thanks for your question. Man, I just have to say before we get into answering Marie's question, I feel like our listeners are crushing it. I feel like every question today is coming from a position of strength financially. People are in a good position, They've invested well, They're trying to maximize their opportunities make smart decisions, but It's just it's cool to hear how our listeners are just like taking the bull by the horns and they're
doing a great job with their money. And Marie included like this is a question that's coming from a position of strength, like how do I potentially avoid some of the tax on the massive amount of money I made? Right? Mostuff? Yeah, I mean taking it back to like Natalie's question earlier, this is kind of like a five thousand level ask how the money episode? These are all very advanced questions where folks are doing an amazing job with their money.
So that, yeah, definitely makes me really happy. And Marie, you know, first of all too, I'm glad that you're not asking us like what the fair price should be to sell that house back to your brother in law, because I feel that mixing family and money to other can kind of be you know, some tricky waters to wait into, and especially in your case, if you haven't you know, addressed the possibility of him buying the home back from 'all you know, back when he was going
through the through that divorce, this could lead to some difficult conversations. But yeah, again you're not asking about that. Part of it sounds like you've identified the price and you're just moving on. There we go. I don't want to get into that. But let's talk about taxes. Everyone's other favorite topic. You know, people love to talk about. Taxes is just like an enjoyable, enlightening conversation for all of us, really light light table talking exactly. It's everybody excited.
Let's let's talk about religion, politics and taxes like those are really fun topics of dinner conversation. But I will say, Marie, taxes are in most cases a sign of success, right that the better that you do, the more you'll owe. And you've done really well with this property, so you're gonna owe tax on it. But fortunately you'll owe taxes on the gain of this property at the capital gains rate,
which is really favorable. It's fiftent in most cases. The only way to avoid capital game gains, ever, is to sell an asset in a year in which you made less than eighty thousand dollars including that gain. Uh So that means that Marie, you're not going to be eligible to skip out on any sort of capital gains tax um. That's the threshold for a zero percent capital gains tax rate.
But of course, since your capital gains are so high on this property, that's impossible that sale price in accompanying gain alone will push your A G I pass the point of being able to avoid paying it. So sorry, but it is kind of a success tax in a way. You've been successful and you are going to owe uh taxes at the rate of fifteen percent in all likelihood
on the games of this property. That's right. And you know the only way for most real estate investors to avoid capital gains taxes is either to to gain very little, which isn't a great game plan, let me hamstring myself, or order to roll that money into another property. And Marie, you touched on this, and so this is called the ten thirty one exchange for everyone else out there, it's it's listed under section ten thirty one and the I R S Code. That's why it's called the one exchange.
IRS has all these catchy names, so sexy, and it's an excellent strategy that would allow you to minimize your capital gains taxes that you were to pay. Again, so we know that you said you're not interested in real estate, as you had it pretty nice with that house next door. But if you're looking to minimize taxes, we would highly recommend you consider a ten thirty one exchange, you know, like maybe sit down and consider what is it about having rental real estate that maybe you dislike the most.
You don't like, say, for instance, if it's repairs and maintenance, like maybe for you, hiring a property manager makes the most sense. You talked about how having it next door was, you know, really nice, and so I'm guessing what that meant is that it was really nice to be able to go over there and make a repair or to check on something like that. And so if you're just not wanting it to be a part of your life as much, I could see that being a good instance
for when you might want to hire a manager. Yes, you're paying them a percentage, but it would it be of the gains that you would realize from selling that property next door. That would be one really expensive property, right, Um,
And yeah, I agree, Marie. I think it's worth considering doing a tent already want to change hiring a property manager so that you're not overseeing the rental property if that's what makes it daunting and uninteresting to you, It's really the only way to avoid the massive tax bill
that you're gonna face when you sell this property. By the way, for everyone else out there, mat, I think it's important to clarify, Uh, this is the way it works when you're profiting from an investment property, not a primary residence. Taxes are way more favorable when you're selling your primary residence, and most normal folks aren't gonna owe
anything in taxes when selling their home. And another option, by the way, worth considering for Marie is that if you created a company like an LLC, maybe you call it Marie's Holdings LLC. Like that, Yeah, fancy rate to it. It's better than the I R S name of one exchange,
just as straightforward though, right, yes it is. Uh. Well then, and then if that LLC owned the property and sold the property, you might be eligible to open up a set bi ra so the company contributes to a retirement fund on your behalf up to fifty seven thousand dollars for last year fifty eight thousand dollars one. It's definitely worth considering, but we would suggest that you talk to a tax professional before you know, pulling off a complex
maneuver like that. That's right, Yeah, So Marie, thank you so much for that question. We hope we have gotten you pointed in the right direction, and at least I've given you maybe a couple other ideas to consider, all right, Jill, Our next question comes from a listener who is looking to basically maximize her savings. Let's hear it. Hey, Jela Matte, my name is Brittany. I live in southern Illinois, about thirty minutes east of St. Louis. I absolutely love you
guys podcast, and I listened to it religiously. I have a question about maximizing savings, and I like your input on mainly about mutual funds versus like a high interest savings. My husband and I currently have four one case and pensions through a work that we save about our income on. We also have about six months worth of savings saved up in UH savings account in our bank, and we also have like a fun money account for vacationing and
that kind of thing. But I was wanting to try to see if there was anything we could due to get more bang for your buck, so to speak, help maximize the savings. As I said, any input that you can give would be greatly appreciate it. Thank you so much. Brittany, thanks for that beer recommendation. Of course, Matt and I always up for a good, solid beer recommendation. I think we've actually had a four hands beer on the show back in the day. It's been a minute, it has,
But yeah. St. Louis has some has some good beers, has some great breweries. We've had side project before. A couple of weeks ago, we had something from Perennial Artisan Nails on the on the show. What it's called. It was delicious. Yeah, actually kind of similar to this beer. Yes, yeah, that's true. We'll talk about here on this episode. Yeah, but but we hear you, Brittany. Nobody is getting much bang for their buck these days when it comes to savings.
So let's get to your question. The fact that you have a fully funded emergency fund is awesome. And on top of that, you have additional savings buckets for other goals that you're calling fun money. Let that put you in just an awesome spot. Financially, You're you're essentially the opposite of someone living paycheck to paycheck, right, um, And so yeah, congratulations are in order, Brittany. You're doing a great job. We feel your pain, though of wishing that
your money was earning a higher rate of return. But it's important to remind yourself what this money is for. It's not to grow your wealth. It's there to preserve it. That's what savings are for. So that money is sitting there, safe, insecure in case something comes up, and those savings are going to keep you from racking up credit card tent
if something were to happen that was unforeseen. Yeah, and Brittany, y'all are serious investors, which is great as well, but you know, having that emergency fund sitting there as cash will also keep you from potentially tapping those retirement accounts which come with a hefty fee as well. That's something that we were able to avoid last year with the care Is Act, right, the ability to tap into some four own case some retirement plans without that additional ten percent.
But that's something that you want to keep in mind as well. So that being said, don't invest your emergency fund or your fund money, keep it liquid as cash. But you know, we definitely recommend you to look around to the different online high interest savings accounts that are out there. As of this recordings, c I T and ALLY are both offering point five percent on their savings accounts. Uh. And be sure to check out Allies No Penalty c D as well, even though they're you know, also just
paying point five percent there as well. You're able to lock in the rate just in case rates drop even more. Uh. And of course, since it's penalty free, that means you can pull that money out of there really quickly without any of those penalties or fees, without getting penalized for pulling that money out early. Yeah, Matt, you jumped on that early on in the pandemic as rates were falling, and you're sitting pretty now in your no penalty c D.
I mean literally, that was my our emergency fund. I was just like, you know what, Like, I don't think there is a high chance of us needing this emergency fund, but you still want it. They're just in case, but you also want access to it, which is why I feel like the Yeah, the no penalt d CD makes so much sense for that application. Yeah, especially in a falling interest rate environment and you're sitting it like three quarters of a percent higher than than most people are
these days. I wish it was like closer to three or four percent higher, but it'd be nice. Yeah, not the case, right. That was a long time ago. We went interest rate. Wen says, an, we're earning that rate of interest. Uh, let's talk about two, Matt. Another option for Brittany here, Brittany, if you're under the income limits a RATH, opening a roth Ira for you and your husband is a great and flexible investing vehicle. Combined. That's an extra twelve thou dollars that you could be stocking away.
And the best part of all is that your contributions can be withdrawn for any reason without paying any fees or taxes because RATH contributions are made with post tax money. And so Matt in an episode we did all about the roth Ira. That's something we talked about, is that the roth Ira has this potential to at least house a portion of your emergency fund if you've been diligent enough to handle money well throughout the years. And I
think Brittany can start working towards that. If you do look at your cash stockpile and it starts to make your heart hurt and you wish that some of it was invested, I think you know it's it's it doesn't make sense to take all that money and invested, because then you're putting yourself at undue risk if something were
to happen. But opening up a wrath and starting to stash money in there and working up to the point where the rath can be a small portion of your emergency fund is a worthwhile goal, and it can mean not having to have quite as much money sitting in a savings account the turning just very little, that's right. So yeah, Brittany, just keep in mind too. You know, this past year, a lot of people went through some some difficult situations, right, Like, I've got a feeling that
you probably did pretty good. It sounds like you'll have some really solid and secure jobs. But imagine if you didn't, right, Imagine if you would have been in a situation where you had to go on unemployment, or in a situation where your hours were cut something like that. Hard times aren't always foreseeable, and so that is why we want to make sure that your emergency fund uh funds that
you want accessible isn't invested, you know. And the other thing too, like you don't want to have money invested in the market that you're planning to take out within a year or you know, maybe even a couple of years. That's the kind of money you want to leave in the market for the long term. You want to make sure that you're avoiding that volatility, and you avoid that
by keeping it placed more conservatively, no doubt. So, Brittany, best of luck moving forward, and don't feel so bad that your money is sitting there in savings not earning a lot. That's the boat we're all in. Yeah, it's a good thing. Uh and too, Brittany said, she listens religiously. I was gonna say, you do kind of have some like cult leader like tendencies. Thank you. I appreciate that. That's what I was going for it. I pulled it off.
You do it? Well, okay, thank you? All right. Well let's get back to the beer that we had on this episode. This one was called Seven Deadly Stouts by Monday Night Brewing and Matt. This was a beer that literally they took seven different style say brewed, and they blended them together to create something unique and epic. What were your thoughts on this one? I would say that I think this is one of the best beers to have come out of Atlanta. Like it. It is that good.
I mean, the flavor that they've packed into the stout. It makes you think that it's going to be crazy thick, you know, but like that's like, what's so amazing about this is that it doesn't it's not overly heavy. It's you know, the mouth feel the body. You drink it and you kind of switch it around a little bit, and and for the most part, it's pretty light compared to a lot of different stouts that would try to
incorporate this amount of flavor, you know. And so the first thing I noted though, was like the vanilla flavor going on, like the vanilla, but then it's got like the dark chocolate roastiness going on. There's like some nice coconut vibes, uh, and there's also like some serious notes of hazel nuts. Like as I'm drinking it, like it totally made me think of New Tella, but New Teller that was also aged in like bourbon and brandy and whiskey barrels. Yeah, all the different barrels. But that's kind
of New Teller really, It's true. But this was an amazing beer. I'm I'm kind of shocked that we just kind of pulled this one out randomly, but we're just like I mean, why not, you know, that's kind of the how the moneyway. It's not we're not living for the weekends, which is actually kind of like Monday Night's
motto that weekends are overrated. But like we talked about on the show, craft beer is our craft beer equivalent, and so being able to enjoy something delicious like this during the week man while you and I record an episode that we can share a bottle like this is is a ton of fun. But yeah, what were your
specific thoughts on this beer? Well, that was pretty meta to say that craft beer is our craft But I thought it was interesting, you know, reading up on this beer, like it took two and a half years to make this beer, and then then one of the things too, because it was these different staffs were aged for barious amount of times and different barrels, and then it took really an expert blender to mix those stouts together to
create something like that's delicious. Sometimes combining a bunch of different beers like that, it might taste like you remember when you used to be like a suicide, like on the soft drink fountain machine and you get like, you know, some sprite, some cokes, some dr pepper, all that stuff and it would just it would taste horrible, Right, you weren't a good blender. Yeah, I guess not. That's what I'm saying is like, you know, drinking each of these
stouts separately, I'm sure it was good. Typically combining them into something it's a really hard task and so it really shows that they that they were expert blenders when they made this beer. I agree. There were hints of all sorts of the ingredients that um we're in those base original stouts, like vanilla, like cinnamon, um and and coconut and some of the other ones as we definitely some cinnamon which brought us back to the Abraxis that
we had recently. Yes, both both of these beers fantastic. I guess if was it Brittany, So she's up there and has access maybe to the perennial artist and nails. If you can get your hands on some of the bractsis Brittany, that is similar to what we're drinking right now, if you want to get seriously meato with it. Yeah. Yeah, So this beer was excellent, definitely, I agree, one of
the best beers that's ever come out of Atlanta. Major winner from the folks over Monday night brewing and also kind of a random splurge on our parts, so it was cheers, all right. So that's gonna do it for this episode. We look forward to taking more listener questions in a couple of weeks, and you can always go and submit your listener question to be featured on an upcoming ask htm episode. There are simple instructions for how you do that on our website at how to money
dot com slash ask. That's right, and if you've listened to our show and you found it helpful, we would love for you to share your appreciation for the show by heading over to Apple Podcast, leaving us a solid review over there that helps us to get the word out helps others to make sure that they are doing smart things with their money as well. So thanks in Advanced for that and Joel. Until next time, Best Friends Out, Best Friends Out.