Ask HTM - Maximizing Tuition Reimbursement, Bank Account Bonus Requirements, Using a HELOC to Pay Off a Mortgage, & More... #424

when paying off your mortgage early does not make sense. Yeah, we've got those three plus a couple others here on this episode. Yeah, so looking forward to it. I think we've got some good ones and just one that are ones that are highly applicable to most of us. So a lot of good questions that we're gonna get to on this episode, plus a couple others that may not be as applicable but are still very good. Yeah, still

interesting for sure. I think sometimes I'm fascinated by the variety of questions that come in because even if the spice of life, even if it's not something that I have dealt with personally, like I know that someone someone who has, and I can, like I don't know, just kind of think of it as building a robust amount of financial knowledge. And I'm just curious, and I think a lot of our listeners are too. They're just curious

about money in general. And hopefully the stuff we covered here just leads to you being like smarter when it comes to money in general. But Matt, before we get to that, you you don't like to go to the doctor. You don't like to go to the dentist. That is true, although I'm trying to fix all of these things. I know, yeah, you actually have gone recently, and you actually went to the eye doctor recently, which I was surprised to hear that you decided to make that move. Yeah, I'm gonna

share this story with folks. And so I've been sent to not go to the eye doctor and you know this, but I know I've needed to go because my girls will point out that I can't read the clock that's on the stove. And here's the thing. It's in blue lettering. It's not very bright. It is hard to see. But they still make fun of me and they're like, you can't read that when we're sitting at the table here. It has made me realize, though that I think my

eyes have gotten worse over the years. It has been twelve solid years since I had gone and got my eyes checked. But I was tempted to instead of actually go to the eye doctor, to just hop on zinny and slightly tweak my prescription and making it a little bit uh stronger, because basically they're like a frugal or cheap kin undrum. You're like, yeah, yeah, do I pay the money to go to an eye doctor or do I just assume that my vision has deteriorated a little bit,

just like pad the numbers right exactly. And so I was like, Okay, I'm just gonna make a little bit stronger. I'm gonna order those I can avoid the you know, going to the eye doctor altogether. But in the end I decided, okay, I think that would be cheap, Like that would be an instance of me, uh maybe doing what I should be doing, which is actually going in and seeing the eye doctor, because they, you know, they check for other things in your eye while you're in

there as well, making sure. I don't know what they look for, but they you gotta fly in there, man, like you gotta pick that out. Does make sure that there's not other weird stuff going on. So that was

the decision that I make. And here's the thing. I am so glad that I did because I went in and I don't have like eye cancer or anything like that, like not nothing terrible, which I was actually a little bit worried as I was sitting down, I was like, oh man, it's been over a decade, like I might have some screw top eyes, but it's are another healthy but they have gotten worse. But specifically, we discovered that I have an a stigmatism and both of my eyes.

And what that means is that there is something different that you have to do to your eyeglass prescription. You can't just make it stronger. You have to do something you know there, it's like another set of numbers that you have to make an adjustment for. Uh. And I'm so glad that I actually went in because had I not gone in and had I just made my prescription stronger, I would have a not improved my vision because it

wouldn't have been the right correction. B There's a good chance my eyes would hurt because I would be constantly straining because I hadn't corrected my eyes. You know, I hadn't corrected my prescription in the correct way. And I would have been out the money, like the thirty bucks or whatever that I would have spent on Zinny, because that's where I'm gonna Actually I ordered some earlier this

morning before we started working. All there. You got me a new set of eyeglasses on the way from Zenny optical right ones that are gonna yeah, and they help your eyes, and so I'm so looking forward to not only being able to see properly. But I'm just glad I made the right decision in this case, because, like you said, I can be a cheap buddy and avoid doing the thing I think I need to do in order to save a couple of bucks, and in this case,

I'm glad I mean the right decision. So the lesson here, don't self diagnose any ailments you might have, instead actually going and spend the In my case, I spent like eighty bucks getting my eyes checked and she gave me the prescription and Nana, I'm set for another twelve years. Yeah. That's the thing. It's not terribly expensive. Hopeully not twelve. But that's the thing is is it's not terribly expensive to go to see an eye doctor. Usually you can

get that appointment for seventy eight bucks. Not not not much. It's really not too bad. And then yeah, save on the back end when it comes to the glasses that you're getting, because that is where most people fork over the most money. They'll drop three fo on you know, prescription lenses as opposed to going to a place like Zenny where you went, which is dirt cheap, but you still just as good a quality. And they've got some cool sis. So I love their glasses. I'm actually really excited.

I've got these kind of gray, clear ish colored ones. So the frames are kind of a little more transparent. Uh, And yeah, I'm looking forward to train out some new frames. I thought about getting someone like the hip wire frame. I don't think I can pull this off. My dad he went and got his at Warby Parker. That's another good choices are a little more expensive, but they're still cheaper than going to a lot of the traditional eyeglass shops.

And so once you get that prescription once and once you've had that eye exam, once you've not cheaped out on that, and then you can like kind of sort of cheap out on the glasses. Like that's get the right prescriptions, right, But don't just necessarily like overdo it and spend buckoos a bucks for the frames. Yeah, so, especially with younger kids too, were wrestling around. I don't know how many times I've gotten smacked in the side of the face or had had them kind of wrenched off.

That's me though, when we're wrestling that that is true. I mean, you know, before we podcast every time, I gotta get that heart it up to that target heart rate, make sure that we are podcasting at the optimal levels. Uh, Joe, Let's go ahead to introduce our beer this episode. This is one by Burial, uh and it is called Beneath the Tides of Relative and Permanence. I don't really have anything else to say. We'll talk about this beer and our thoughts on it at the end of the episode.

Maybe we should let the folks at Burial name our podcast episode like that'll be kind of fun to see what they come up with. We don't want folks to get depressed though, just by reading the name of our episodes right to actually click it and listen to. They have the most interesting beer names and sometimes depressing, but they go deep. Let's move on. Let's get to some

listener questions. And if you have a question you want to submit for Matt and I to take on an upcoming ask TM episode, we would love to hear it. Just go to how to money dot com slash ask simple instructions. There is basically recording a voice membo on your phone and then emailing it over to us and hopefully we'll get it on the next one. So Matt, let's get to our first question of this episode. This one is about banking bonuses, how to score money by

moving your dollars around. Hi, man Joel. I'm a longtime listener and I really enjoyed your podcast on my runs during the pandemic. I'm retiring next week at fifty two, and I plan to spend a certain amount of time shuffling our cash reserve around to various high yield savings accounts just to try to squeeze out a bit of extra interest without taking on additional risk. I found though,

that many online banks have a direct deposit requirement. Since I'll be retired and it don't have an employer giving me a wage anymore, I don't have any way to meet this. What do you suggest? Is there some way for me to get around this direct deposit requirement, maybe by setting up some kind of deposit from my brokerage account or something like that. I would love to hear any solutions you might have for this issue. Thanks again.

All right man, I like Jeff's question. I personally am not much of a runner, but yeah, when I am going on a bike ride, I sometimes listen to podcasts, sometimes listen to music, depending on kind of what I'm going for. I'm a little more leisurely, it's usually a podcast. But what about you? Do you run to podcast you run to music? Do we actually pump people up enough

for their workout? I hope we do actually, so yeah, big thanks to all of our runners and workouters us the right tory probably not out there here, I'll say this. I actually I've had some issues listening to audiobooks and listening to podcasts while I run, because for my entire life I've always used that as a time to kind of decompress, unplug, But lately I'm if I'm wanting to catch up on something, I'll you know, popping in the

earbud one year take off running. But here's the problem with that is I get so engrossed into the story or the podcast that the narrative essentially that I won't always pay attention. I pay attention to traffic, there's no danger there. But I have an issue with not listening to my body as much, and so I'll start running and I realized, like halfway through the rung, I'm like, crap, my my knee has been really hurting, and I don't really pay attention to it because I'm not because I'm

completely too into what I'm listening to. I'm not really listening to my body as much. But the Jeff and all the other folks out there who can do two things at once, good as to you, and we appreciate you all listening. But Jeff, let's ahead and answer your question. You're talking about basically trying to get around some of these direct deposit requirements, and we we feel that this

is a great approach. Uh. You know, if you can snag those bonuses in order to get a higher rate of return, we feel that that's probably the best method we know of to increase returns on your money that you aren't willing to risk in the market for money that you want to keep on hand, that you want to keep liquid. Uh. And the thing is is Not all banks require you to have a number of direct deposits in order to snag the bonus, but some of them definitely do. Uh. It's kind of annoying, but we

understand why they do it. You know, they know it's sort of like this, it's a bit of a hassle. Uh. And so once you do get that direct deposit up and running, you've got that money going into that account, you're far more likely to stick around as a customer, sticky.

It's like a web they've fun for you. Yeah, and of course, you know, if if you bank with them, you know for the long term, there's a higher likelihood that you're gonna maybe use their other products like a helock, or maybe you'll go to them for a car loan, that sort of thing. So we understand why they do it, but it makes it annoying for us as consumers when

we're trying to maximize our return. Yeah. But let's let's talk about yes specific situation, and he wants to get around these direct deposit requirements when he doesn't have a paycheck, and that's it's tricky, right. So it's even tricky for freelancers Matt right, who don't have a steady paycheck coming in and they just get paid willy nilly here and

there by different clients at different times. But for everyone who out there who it does have W two employment, all you gotta do is set up your direct deposit to go to this new bank and boom you've done. It was super easy. But yeah, Jeff, you said you're retiring next week at the age of fifty two, which, by the way, congrats, cheers very early retirement. We're very happy for you. But this this doesn't apply to you

since you're too young. But for our more mature listeners who are receiving show social Security benefits, that check actually from Social Security, it usually counts for or requirements or promotions like this, that counts as a direct deposit. So yeah, if you're in that boat, then you simply switch the account that your monthly check goes into, if that's the case.

But again, Jeff's kind of in no man's land. He's stuck in this direct deposit purgatory essentially, So Matt, you have kind of one way though that he can get around these direct deposit requirements. Sign up for a new account and still get the bonus, right Yeah, So yeah, Jeff,

kind of in limbo. But for Jeff and other listeners out there who you know, don't want to change what account their paycheck is getting deposited in, the next best method is to try using a c H transfers and so a c H transfers that stands for Automated clearinghouse UH. And these are just the standard push or pull transfers that you should be able to initiate with any bank account. And here's the thing too, This is going to be completely dependent on what bank you're attempting to open an

account with and what their specific requirements are. But a lot of banks say that a c H transfers from a bank UH, and just from regular banks like ally Capital One discover that they're completely legit and that they'll count as those direct deposits. UH. There are some banks out there that will even count transfers from PayPal and Venmo, so it doesn't necessarily have to be this super official

direct deposit from an employer like you're used to. That being said, it is worth reaching out to someone at the bank to see if that counts as a direct deposit ahead of time. You want to make sure that you're not wasting your time but quite a few banks will count these A c H transfers similarly to a direct deposit, allowing you to still get that sign up bonus or that higher interest rate from that account. Yeah, and it's so easy to initiate an A c H

transfer from one bank to another. You just have to make sure you link those accounts and once you do, like I'm always transferring money back and forth from one account to another, and so it's as simple as that. Really, for most banks, they accept that as a direct deposit, and then you know, Jeff will be qualified, he'll be able to get that bonus, which in effect equates to a massive return on his money, especially in the environment we're in with just incredibly low rates of savings. It's

like those bank account bonuses are gold. It's a it's a big deal. And and speaking of that, Doctor of Credit is our favorite site for bank sign up bonuses. Uh, they aren't usually as rich as sign up bonuses for credit cards, but they can still be meaningful, you know, to three potentially for opening a new bank account and keeping it around for sixty to ninety days. The great thing is that opening a bank account it's not as

painful as it used to be. I specifically remember Matt actually doing one of these with one of the big banks back in the day, and uh, that was a mistake for so many reasons. One, just going into the branch was a big pain. Trying to close that account at the end was frustrating, and to make it super hard. And of course it's they don't want you to leave one of the big banks exactly. They're trying to make your life miserable as usual. But yeah, but yeah, that's

not the case. You're opening up an account online these days, and so uh, for for Jeff, it should be pretty simple to kind of bounce around to some of these different accounts, open up, open one up, get the bonus, and kind of see whether he likes the product or not, whether he wants to stick around. But I think this is, yeah, is a great strategy, very reasonable to increase your earnings

on savings without taking on any additional risk. It just takes really a little bit of record keeping, right, make sure you're keeping track of where your money is going. But other than that, it's, uh, it's usually just ten fifteen minutes to open that new account, making a couple of those transfers and Jeff's gonna be golden. That's rights.

We've got several other questions that we're gonna get to during this episode, like the ones we mentioned about tuition reimbursements when paying off for mortgage when that doesn't make sense, plus a couple others. We'll get to all of that right after this break. Alright, we're back from break. We're still taking listener questions. This next one comes from a listener who's trying to find the right credit card for his daughter. Hey, Matt and Joel, my name is Jason.

I am forty five. My life is forty four. We have good income paying jobs, and we have three kiddos. Our otis kiddo just started college, and we're thinking about getting her a credit card just so she can start building some credit score as well, just so that she is has something to put her gas money on and expenses other than her debit card right now, and so that she's a little bit more protected. Of course, mom and dad would be watching it, but she is very

responsible for an eighteen year old. But we also don't want to allow the leash out too much on just opening the window for spending everything on a credit card. So I'm curious, do you have a credit card you would recommend for a young new credit card holder. Thanks, and have a great day. Look forward to hearing from you, all right, and thanks so much for that question. And we are so glad to hear that this is something that is on your mind. We feel that now is

absolutely the time to be doing this. We want you to get your daughter used to credit cards while she's you know, relatively young, because here's the thing, She's likely going to make some mistakes. But since it sounds like that you're still maybe financially responsible for her, maybe she's

still under your roof. You'll be able to help her learn those lessons on a on a much smaller scale, instead of her learning them the hard way later in life when maybe she's less likely to have someone looking out for her. Basically, you want are learning those lessons with like tens and hundreds rather than with like thousands and ten thousands of dollars. Essentially, this is why Joel, not like you and I, we both use go Henry,

which is an app for kids. Uh, we use them right now with our oldest daughters because like our kids, they're gonna use plastic to make purchases eventually in their life. And so our philosophy is, you know, why not get them used to to using it while they're young and while we have the ability to to guide them. But of course, go Henry, it's a debit card system, but we feel that the same principles apply when it comes to them swiping that card and understanding that money is

leaving their possession, right, Yeah, for sure. And I do think Matt, like what you said that there's no better time than the present, because, yeah, as your kids get older, you have less and less influence. And Jason still has a lot of influence over his daughter right now, Like he can help help her figure out which credit card is best, and he can then you know, they can look at her spending together and they can figure out where she's making mistakes, kind of help her own how

she uses it. So yeah, I love the idea of not waiting and hoping that eventually, when she's got her own place and her own job, that she's going to figure it out and use it. Well, Like, let's make sure we impart those values and the knowledge. Now, I think you know, one reason to to move forward with this is because credit cards are great tools, Like we talked about that all the time, but like all tools out there, you run the risk of using them poorly

and hurting yourself. Like you can misuse a tool, right, You can use a hammer to us through a painting glass and it's like, dang it, I didn't did the wrong thing with that, and you cause a lot of trouble. But it's effective in the wrong way, and in this case, right, your credit score and your personal finances could be hurt

in a big way if you don't use credit cards. Well, like you mentioned your daughter, she sounds like a responsible young woman, but you want to make sure that she understands that the credit card it's not offering free money. I think oftentimes for college students that's how they've gotten in trouble is they were like, wait, how much is my limit? Cool, guess that's how much I can spend two thousand free dollars just sitting there, right, And it's like,

that's not how that works. But really, it is so important for her to understand that she's spending her own money, uh, not free money that someone's given her. And it's a shift in mindset that's important to foster, especially for young folks who are getting to that age where they're gonna fly the coupe, those are like really important developmental years and we still need the input of our parents in those years to kind of help us with some of

those bigger life changes. And really, of course that the most iportant rule for anyone using a credit card that you need to impart to your daughter is that she must pay the balance in full at the end of every month and to never buy anything put anything on that credit card that she where she won't be able to actually make that happen exactly, But you know, once you get that straight, like, there are so many different reasons that we are fans of credit cards, Jason, you

mentioned two of the biggest ones. You know, the ability to start growing your credit score like that is huge, and the additional consumer protections they offer are great as well. There's a lot of peace of mind because that you know, liability for fraudulent transactions is capped when you use credit cards. If you get scammed out of your cash, you know, regardless of it's physical cash or even you know from

a debit card, you're out of luck. But if you get ripped off the credit card transaction you've got immediate protections built in that card acts as a buffer. And of course, you know, there are so many other credit card benefits like sign up bonuses that we won't get into. We've talked about those enough here on the show, but if you want to listen back to episode three six, we actually do a deep dive on the different credit

card benefits that you aren't using. And so, you know, Jason, in your case, you know that this is something you want to get your daughter doing. But for everyone else out there who's thinking, maybe I don't know, you've come from some other personal finance guys who advocate against using credit cards, we are all for it, assuming just like Joel said, that you pay your balance off at the end of every single month in full and on time.

That's right, and let's talk about something else, Matt. Another option to boost Jason's daughter's credit score is to make her an authorized user on your credit cards. Jason, and that's assuming you've got great credit. But we're assuming that you do, because it sounds like you've got your money game together and you're listening to this podcast and you're asking a question, So I'm sure things are good with

your credit score. But go ahead and check, and then you can sign your daughter up as an authorized user. You can list her as an authorized user on one or two of your credit cards, and that will really quickly benefit her credit score. It'll make it look like she's been responsible as responsible as you have to the credit bureaus, which is pretty cool. How you can kind of do that and grandfather your daughter into your good

credit standing in that way. So yeah, consider that and then work towards getting a card of her own too, and then kind of well, what's the best credit card to get that That question is the next one that pops up, Well, that really depends. And actually before two thousand nine and the introduction of the Card Act, the world was kind of the college kids oyster. Uh. You know,

banks were offering credit cards like candy on campuses. We've heard stories, Matt remember back in the day, we had J. D. Roth On and he talked about what was a free pizza? Is that what he got? Or did you get a free pizza? I got a free pizza. What did he get? He had a frisbee at Frisbee. Yeah, And so that was kind of like the way things went down is banks were on college campuses offering credit cards to kids when they had to be able to prove zero about

their financial responsibility, their income, any of that stuff. Well even before that, I mean my first credit card I got when I was a teenager living at home in high school, and at the point when I applied for the card and received it, I had to have a job. Yeah. So, uh, the laws have changed a lot since then. You know what, we're podcasters. We still barely have jobs. But uh, I think that that was one of those things that it led to severe long term debt problems for so many people.

And so now because of that, you know, legislation twelve years ago, if you're under twenty one with no credit score, you have to have proof of income or a willing co signer, And we suggest that you go in the student credit card direction for the time being until her her credit score gets boosted to where she can get some of the better cards that Matt and I talked about that we prefer. Discover is probably the best in

this area with their IT cards. Capital One Quicksilver Student is another great one with no annual fee and it gets you one and a half percent cash back. Uh. And then yeah, once you've established, you can upgrade that credit card with one of those credit card companies, or you can just sign up for another credit card that is going to be better, better fit for her and for how she spends. But well, we'll link to both those cards in the Charlottes. We think they're two of

the best for anybody in her position. One of the benefits of those student cards is the fact that oftentimes their limits are lower, and sort of, like we said at the beginning of the episode, if she can make mistakes with just maybe hundreds instead of thousands and tens of thousands, I think what that's one of the things to keep in mind is that, regardless of the card, it probably would be better for her to have a card with a lower limit. That way keeps her out

of trouble. I think another interer from going in the Maserati leadership, you know, yeah, but uh, and then the co signing option, maybe think of the fact too, it might be worth you proactively co signing that card with her.

That way you can I don't know, maybe it's meeting once a month or just talking on the phone once a month to kind of go over some of her transactions, seeing where her balances are, and I think that could allow you to have a more active role in sort of the day to day operations of that specific credit card.

And I don't know, like this doesn't have to continue, and definitely, but after like six to eight months, if she's doing a great job and just like you said, she's being incredibly responsible, it's something where maybe you check in like once a quarter, like once every few months, or like only at holidays. You're like, hey, how you

doing with credit card? By the way, we will make sure you're being you know, you're paying out your balance every month, and hopefully you'll hear the great news that like yep, you know, paying it off every single month, where she's almost treating it like a debit card, but getting all of those sweet credit card benefits, no doubt. Jason, best of luck to you and your daughter. And I mean, yeah, it's a big time leaving the nest like that, So

congrats to to you and her. I get you thinking like ten years from now, I'm just gonna like purposefully make sure my kids fail at school so they have to continue to stay home with me because I like hanging out with him. Let him fly, all right, let's I'm sure I'll feel that way at some point, but let's let's get to the next question. This one is about rebuilding your finances after filing for bankruptcy. Hi, Matt,

and Jeel. I'm generally a financially smart person and I have a strong financial history, but I made the horrible mistake of allowing my former husband to have complete control over our finances, and as a result, we went through a bankruptcy. We are now divorced, and our bankruptcy is finally discharging. My credit score has taken a major hit, of course, what steps would you recommend begin to rebuild my credit as efficiently as possible? Thanks for everything, all right, Matt.

By the way, that question was from Becky, And uh, really tough question, Becky. I'm so sorry to hear about the financial, the relational, and the emotional turmoil that you've gone through recently. That sounds like a lot, and I think it's important. I'll just want to speak from personal history for a minute, Like I want you to know that bankruptcy it's not the end all be all. It doesn't define who you are, and it doesn't say anything about you as a person. And when I was a kid,

my parents went through bankruptcy. I was about twelve years old. It was really really tough on them. It was tough on my whole family, my siblings, but they made it out on the other side, and they're in a better financial situation than ever. Like they're both just about on the precipice of retiring and they're gonna be able to do that in their late sixties, which I think in their forties they were like, we're gonna work until we die, Like that's what they assumed at that at that point

in time. And so yeah, I just want you to know that these things happen and to not beat yourself up over it, because it's easy to do that and get into like that self flagellation mindset. But really, let's talk about like what you can do moving forward, and let's not dwell on like the negative past mistakes, you know, Becky.

For you, I think one silver lining is that it sounds like you know your stuff when it comes to personal finance, and so it's it's not like you're you're starting from, you know, complete scratch on the knowledge side, and I feel like that's incredibly helpful. So yeah, let's let's kind of talk about rebuilding here. That bankruptcy is gonna stay on your credit report for seven years most likely,

and that is going to impact your credit score. Although the further away that you get, the more that your score is going to start to improve even before it is completely removed from your credit report altogether. So that's some additional good news. But in the meantime, there are some of the things that you can do now to improve that credit score. Yeah, it's important to do what you can to handle credit responsibly now, but getting that credit is tough when you have a bankruptcy on your

credit report. So how do you get a credit card and actually start to do the hard work, uh, towards improving that score. Well, you might have to initially settle for a secured card. And the way that these secured credit cards work is that you essentially you put down a deposit at the bank. In that deposit essentially acts as your credit limit. There's no risk to the financial institution because if someone doesn't pay, they have the deposit to cover it. So let's say you open up a

thousand dollar secured credit card. You have to come to the table with a thousand dollars, but then at the end of the day, you have this reporting to the credit bureaus that you have a thousand dollar credit limit on this card, and then you want to at the same time make sure you're not using too much of that available credit at most using charging three on that credit card each month, because you want to keep that what's known as the credit utilization rate low on that

secured card. So it puts you in a tight spot. Like you you don't want to be using those credit cards necessarily at this point in time to fund all your purchases. While it's a secured card, you want to keep the amount that you're using on it low. Yeah, it's somebody keep them into when it comes to these specific cards, UH is that of course, you know, like the typical credit card benefits that we talk about that you will often see with normal credit cards, they're gonna

be pretty pretty meager with the secured cards. But there are some great options out there with no annual fees, like the Capital One Platinum secured card, and we can link to that one in our show notes. Amazon they actually offer a similar credit Builder credit card that will link to UH And and here's the other thing too. You know, Joel mentioned coming to the table with a thousand dollars in order to provide that backstop in order

to essentially put down a deposit for your card. But for folks out there who can't spare the money, you know, to put down that money towards a secured card, we would recommend Self, who actually used to be called self Lender, and so we'll link to to their site in the show notes as well. But they offer something that is known as a credit builder account, where you essentially take out a small loan from self and then you pay

yourself back. That's why they call it self uh. And so it's just about the easiest and it's like, I mean, the safest way to build your credit score back up from scratch without having money up front. And then at the end of that period of time which you've paid that money back, you've kind of got this nice amount of money sitting there in a c D waiting for you. Yeah. Self, the product that came up with this genius is pretty great. Yeah, and it's it helps a ton of people out who

have little to no credit score. And so I think it's a perfect Becky gan. If you can do both, do both. Have the installment loan with self, have the credit card, the secured credit card, and you know, having both of those things and making sure you handle both of those products well is going to help increase your credit score in a big way over time. Uh. And I just want to say a note to all the

other had the money listeners as well. It's so crucial, you know, Becky, it paid me to hear you say that you knew, you know a lot about personal finances, but you kind of gave the reins completely over to your partner. And I'm sure looking back you regret that. That's like, that's you feel like that was a mistake. And I totally understand that in hindsight, your X was

an idiot. So we empathize with you because that's incredibly difficult to have happened, to trust somebody and then to see them ruin that trust by and and you know, dissolving the marriage and then hurting your finances at the same time. But you know, we want to just say that it's crucial to have both partners involved, at least to some degree in financial decisions, in budgeting, and even if you trust your partner completely, which you know most

of us feel like we do. Um, and even if they're brilliant with money, Like if even though my wife like knows I've got a money podcast and we really three episodes a week, like, she still has some si jol he's brilliant with money, she still has a healthy amount of skepticism towards my you know, some of my

nuttier financial ventures. And so yeah, she trust me a lot, and I do handle most of the investment decisions, but I always run them by her first, And she asked good questions that actually kind of helped prode me in the right direction, maybe from away from doing something that's a little spur of the moment, because I'm kind of a go with the gut kind of guy. And so yeah,

her involvement is really really crucial. She might not know all the questions to ask, she might not have as robust of when it comes to a personal financial knowledge as I do, but that interplay, the way we help each other and the way we run things by each other, is really important. So I just suggest that, like, it doesn't have to be an exact fifty fifty split in couples, and it rarely will it be that. Rarely will you both be as passionate or interested or gifted when it

comes to handling your personal finances. But I suggest a minimum split of ten to so uh, and it's better if it's at least in that twenty eight range. So hopefully other listeners can hear that and apply that to their own marriages or partnerships. But Becky, you're gonna rebuild. You've got the knowledge, and now you're gonna take some of these steps hopefully when it comes to rebuilding your credit, rebuilding your financial situation, and we wish you the best

of luck. Yeah, and Becky's you know. One last thing too, is we want to make sure that you don't have your credit score set on this pedical as like this be all end all of your worth. Um. It's important certainly to build that back up, especially if you want to purchase a home in the future. But other than that, I mean, there aren't a a ton of different reasons why you want to immediately rush as quickly as possible back into having a you know, sky high, beautiful, perfect

credit score. Uh. And so we don't want you just to completely go out of your way pay lots of extra money uh in an attempt to rebound your credit score as quickly as possible. It's definitely something that we want you working towards. But at the same time, it is not that important and not oftentimes we can focus on these small technical things when instead maybe there are larger things like our career are overall financial health that we should be focusing on. So it's important, but it

is not the most important thing. Yeah, and the great thing is time heals always really time heals credit score wounds, time heals the emotional pain that's been inflicted. The damage has been done. And you know, I don't think some of these things, like especially emotional stuff and never completely goes away. But it's amazing how you as humans were resilient we can move forward, and so we we wish

that for you. Becky. All right, well, let's get to a couple more questions, Matt, including one about paying off a mortgage. Does it make sense? We'll get to that and more right up of this break. Alright, we are back. We've got a couple more listener questions, and first we've got one about this sweet little perk that an employer is offering. Hi, Joel and Matt, this is Jen from Wichita. I have a question about how best to use my

tuition reimbursement. I just started a two years master's degree program. I paid cash for the first semester this past summer, and I plan to pay cash for the final summer semester, but I'm borrowing for the spring and fall semesters. All told, it will be about fourteen thousand dollars that I borrow. My employer offers tuition reimbursement, that is about per fiscal year. When I get the reimbursement from this past summer semester,

how's the best way to use this? Should I go ahead and pay against the first loan that I've already taken out, or should I sit on it until next year and borrow a lesser amount or doesn't matter, visit six and one half a dozen of the other And then during my second year, when I get tuition reimbursement, should I pay that towards the first loan or the second loan, or split it in half and pay it towards both. Thanks all right, Jenn, great question. What a

great employer perk. By the way, Matt, that yeah, and I love that we're seeing more and more of this, like employers are realizing, Hey, student loans are a big problem for our workforce, and we're gonna find ways to meet that problem with my paying people money if they have student loan storts are getting a higher education, even covering the cost of books. That's solid. Those books. We know they're not cheap, and I know they're not cheap because I just bought some for Emily. But there were

some ways, there are some ways around that. We've talked about that before. But yeah, I do love seeing employers investing in their workforce. And Jen, good luck with your schooling. Obviously, we love that you're able to pay cash for a lot of it, and that you're keeping your borrowing to a minimum. This is gonna serve you well in the future when you're able to, hopefully after post graduation, have a high rate of pay and have very little money

that you owe in student loans. That's the place to be, that's right. So let's talk about what to do with this tuition reimbursement money. And we think that the best choice is to use that money to pay off any loans that you currently have right now. Uh, And that's because your your grad school loans, they are accruing interest

like literally as we speak of the interest clock. It starts sticking right when that loan gets made, uh, compared to UH subsidized undergrad loans, right, because that's not the case oftentimes that interest is paid by the governments until you're out of school for a certain amount of time.

And so for you, though you are currently racking up interest, and so it's a whole lot more financially savvy to pay that lumps some directly against the loan that you currently have, So you can slash some of those interest costs immediately instead of keeping it and savings were you'll be earning next to nothing. Uh. We can't think of any benefit that would come from sitting on that money as opposed to putting it towards your loan. Now, yeah, man,

I completely agree. And then the next tuition reimbursement, the gen asked about, well, we would say that should go towards paying off whichever loan has the highest interest rate. It's likely that it will be the most recent one too, because rates on federal student loans they actually recently went up. Right, there's something by about a point, So I think graduate student loans are like five and a quarter. That used

to be four in a quarter. So when it comes to paying off of that debt, this would be considered the debt avalanche. Since you're ranking them by interest rate, you're looking at the numbers exactly, specifically the interest rate, and they're probably you know, similarly sized loans. But if there's a big enough difference in the two loan amounts, you could also take the size of the balance into account and you could pay down the smaller loan, which

is the debt snowball approach. But yeah, the the balances are probably close, and the you know, interest rates aren't too dissimilar, but focus on the one with the higher interest you know, get after that one and make sure that one is all the way gone before you move on to the next one. That's the way we prefer you to go after it, by mathematically paying the least amount of interest possible. And one other thing to consider too, if if your balance is manageable, maybe you should refinance

that federal loan into a private loan. Since you are it sounds like you're really intentional with your money, and it sounds like your balance is relatively small jen for you, it can make a ton of sense to refi with a private lender. You can score lower rate, and then

you can pay that loan off more quickly. So much harder to do if you have a hundred thousand dollar balance, But if you've got twelve tho dollars and student loans then and you feel like that's manageable within your budget, refining getting a lower interest rate can make a whole lot of sense, a bit more feasible. You know that you're going to be paying that entire balance off, and so it's a matter of how quickly can you pay

the balance off. Yeah, we've actually gotten an article up on the site on refinancing student loans, and we'll make sure to link to that in our show notes. Former guests to the show, Megan Landers. She isn't a CSLP certified Student Loan Professional, and that means she's an expert.

So she wrote a great article up there and will link to that in the show notes, just about when it makes sense to refinance and where it makes sense to go when you're considering refinancing, shopping the rates, just a little teaser out there is the best way to go. There's it's so easy to do now on the interwebs. But let's let's get to the next question for this episode, Matt. This one is from listener John, and he's kind of ready to be done with mortgage parents. Hey guys, this

is John and Ashville. I love the show and the beer recommendations. If you guys are Moo town, I would love to buy a beer three at my favorite crafty spot, jack Alo Brewery. I wanted to get your thoughts about using my emergency fund and a helock to pay off my mortgage and then keeping the helock around. It's my emergency fund until I'm able to replenish that fund. About fifty thousand remaining on my mortgage with four percent rate with ASCAR, we pay about month about thirty forty payments left.

I have thirty thousand in my emergency Slash savings account and again barely earning any interest. The only other dead is a Costco viason I pay off monthly. I got to get those rewards and I maxed out my four in one K and both my wife and my I ra each year. Um. The heatlock is prime plus point to five and today's primes three point to five, but it does have a floor four percent, so it's as equal as my as my mortgage. I just want to get your thoughts at the risk there. If no emergencies come,

it will be great. It will work out just fine unless the Fed moves that prime above three point seven five. So it's love to get your thoughts. Thanks Matt. John's rolling with one of my favorite credit cards. So I've got to get that Costco Visa because I mean, you can't really beat the four percent on gasoline purchases, and like what is the cash back also in Costco stores? And now that I've officially um brought you into the cult that is Costco, I think you have to go

all the way and now get the credit card. Well, I probably will. I feel like I've gotten more targeted with my my different credit cards, and so we might have to make an update to the different credit cards that we use. Hopefully it's not overlap between you and me. But John, first of all, I gotta say I appreciate your your dislike for debts, the desire to get rid of your mortgage and to do so more quickly. It's

a really good desire. In a recent episode, we actually talked about using a helock as a backup to an emergency fund, and we do think that that is a reasonable and not too risky of a move that can help people to accelerate their ability to invest a little bit more, especially with the you know, the meager returns that folks are seeing on their savings accounts right now,

and so we're cool with that. But one thing that we didn't hear much about in your specific question actually was how your investments are doing, because it's probably better, at least from a financial return standpoint, to invest more than it's going to be to accelerate that mortgage payoff. You know, we don't know how his investments are performing, but my guests, it sounds like John is doing a good job when it comes to putting money aside in

his investments, at least maxing out his retirement account. And to me, that says a lot. But let's talk about why investing more makes sense. It's for a few reasons. First, your mortgage rate it's relatively low four percent. It doesn't look as good as it used to with rates continuing to slide, but it's still really solid. Secondly, your balance is incredibly low, John, and since you're so far along in that loan, you're not paying all that much an interest because you got most of that all out of

the way already. Like when you look at what how much money is going to the interest versus the principle, it's a lot of money towards the interest at the beginning of your loan, and it's way way less. It's so much going towards principle at the end, and you're on the tail end, which means that most of your money is not going towards those interest payments, right, and that makes it less helpful to actually rush to pay

it off. So going through these steps in an attempt to technically be mortgage free, while it might make sense from an emotional standpoint, it's not necessarily the best move when you're looking at the numbers. We'd rather see you pay that mortgage off over the next thirty nine months as agreed and increase the money that you're investing instead, because of how favorable the terms are at this point

for you. Yeah, the way the amateurization schedule works, John, basically you're paying like pennies on the dollar right now? Right do you say amorgization three times fast? Pat amateurization, amateurization, amateurization.

It did some different when I said it through testation, But John, I mean seriously, so little money right now is going towards interest that even though technically you do have a four percent mortgage, you are effectively paying way less than four percent currently for these last thirty nine payments.

Like you know, for a thirty year mortgage. Actually there's like this tipping point and it's not until about year seven where the money that you're putting down that's going towards your balance is actually more than the amount that's going towards interest. And obviously you are well past that seven year mark well, assuming that you have a thirty year mortgage. But John, this is definitely something important to

keep in mind for you. And the other thing too is that, I mean basically John is in money here seven right like he and his wife like that. They are maxing out the retirement of ounce. They've got a great emergency funding place. Their mortgage is not going to be around for much longer. Really, they could probably go in any direction that they want from here. All the

options are great. The world is the oyster, And said John, if you have a desire to invest more of that money, we'd say to open up a brokerage account and start investing more. If you want to pay off your mortgage instead you want to go hard in that direction, that's fine too, if you want to kind of feel some of those emotional wins, But going the heelock route to do so, it just doesn't make sense mathematically based on

where you are within the life of your loan. For your case specifically, we would say that you just air on the slide of simplicity rather than going down the path of opening that helock. Yeah, no doubt. But John, seriously, there are so many options available to you. Thirty nine months left on your mortgage is incredible, and the fact that you're gonna be able to pay it off in a whole lot less than that if you want to,

is really cool, and that's a big financial win. But jump at the roofs and potentially paying more to the banks by opening a helock just doesn't make sense for you, we don't think. But the cool thing about being in money gear seven, Matt. We've talked about this is that you can start to spend more, you can start to give more money away. There's so many options when you get to this point, and so I want John to think a little bit bigger than just like paying off

the mortgage in as rapid of fashion as possible. Like, start thinking, John about what you want your life to look like and how you want to funnel the vast amount of money you've been able to save over time, especially without having a mortgage, You're gonna have more room in your budget. Where do you want that money to go? Those are good questions to start asking. Now. Yeah, over the next three years, that's gonna be hopefully plenty of time for you to kind of start thinking about what

your life is gonna look like, right for sure? All right, Matt, let's get back to the beer that we had on this episode. This one, of course, had a weird name because it was brewed by Burial Brewing, and this one is called Beneath the Tides of Relative Impermanence. It's a double I p A. What are your thoughts on this one? Well, I've got to say that I feel like this is just as delicious now here in a can as it

was in person on draft. Kate and I we picked up this beer back when we took a little anniversary trip up to Asheville, North Carolina, one of our favorite

little kind of getaway cities to head off to. But dude, this was such a good New England style double dry hopped I p A. It had so much of that sharp, hoppy funkiness going on that we so often look for when it comes to these different New England style I p A s. And so, yeah, I'm not gonna talk about the tasting notes as much, but it's just definitely there's a good reason why this is a go to style for both you and I. And instead I kind of want to focus on the can art because their

art is always pretty awesome, right, This one was like Salvador Dolly, Yes, Yes, And I was gonna say, actually, speaking of art, Matt, this beer was almost like a work of art. It was that good. And you know how when you see something that's like amazing hanging up on the wall and you're kind of speechless. I think that's why you didn't have a lot of tasting notes. Why in same here, I'm like, it was just that good, like when you experience something that's close to Nirvanic. Yeah,

this beer was that. So I don't have much else to share either on the way it tasted, like, the art looks amazing. I love what the Salvador Dolly piece, the persistence of memory or whatever and this this one definitely had that vibe and get the melting clock actually going on there on the label and the beer just kind of melted this phenomenal. Basically, we should just quit while we're ahead, right right, Yeah, all right, so we

will quit for today. Uh And if you have a question that you want to, yeah for a Matt and I to take on an upcoming ask kind of money episode, we would love to hear it, just go to how to Money dot com slash ask submit it there and yeah, hopefully we'll take it. Two weeks from today, we'll go ahead and wrap this one up so you can get to the next podcast episode that you're gonna listen to. You but look us up on Instagram if you haven't recently.

We're gonna try to share some more personal stuff like we've been doing over the last couple of weeks. You can find us there under the user name of how to Money Pod Joel. That's gonna be a buddy until next time. Best Friends Out, Best Friends Out.