Welcome to How the Money. I'm Joel, I'm Matt. Today we're answering your listener questions.
You know what, buddy, let's get after it. We're gonna hear directly from listeners. We've got a listener who's asking what he should be doing about his student loans that are in for bearans. Another listener is actually looking forward to collections. Could this be a strategy, Joel, We'll talk
about what he's thinking about. And another listener actually encountered some financial infidelity, and so I'm gonna uncomfortably wait into playing financial counselor maybe, and we'll see what kind of terrible advice that we give in that section of the How the Money podcast. You didn't even sleep at a holiday and I didn't even do it. Man, I'm still gonna try. Well, hey, you've got this thing about Shutterfly here, we got like a new sponsorship or something. No no, no, no,
new affiliate code. So I was not even that.
I was curious because I have a lot of photos that I don't really have backed up, and I guess I could just like buy a cheap hard drive and download everything from my phone and send it over to a hard drive, but it would be nice to have them stored in the cloud somewhere. Oh yeah, and I could. I'm you know, you know this about me, I'm kind of cheap. Sometimes at times I can be cheap, and so I'm wondering, I don't pay for the Apple Cloud.
What's it called? Apple Cloud? iCloud, I Cloud? Okay cloud? I should have done that. Are you pasted? You? We talked, We talked about this last week. It's that's what the ice stands were. I looked it up while I was editing that podcast that episode. It was Internet because I think, I really because before then the computers weren't always directly
like tied or tethered to the Internet or something. So evidently it was like, oh yeah, this stands for this that is now interfacing with the Internet's with the World Wide webs.
Well it works well because nobody thinks of it like that anymore, and they just think, isn't it No, it's the Mac for me.
Yeah. Actually, I was thinking when you said that, oh yeah, it probably is more of like because it's it was sort of like that era where you had all that cool ads with the silhouettes dancing with you know that. Yeah, I was with you. I wasn't gonna question it, but I did look it.
Up so I could pay for the cloud via Apple and a dollar a dollar a month.
I think, right, you get no five, you get five gigabytes for free, right, So did you really? I think?
So?
Okay, Well, it keeps giving me this warning over and over, like your stuff's not backed up.
Or probably because you've filled it. Yeah, that's probably it. Yeah, you filled it up.
And I'm like, well, I don't want to pay you money every month. It feels like blackmail, and so leave me alone. And maybe I should just get over that. But I was curious because actually this was the biggest reason to have a Google Pixel phone back in the day.
The automatic Google photo storage.
Google basically said hey, you get unlimited photo storage. And I was like, this is one of those things to keep me with Pixel when they got rid of it, so I was like, well, you've lost your edge.
So the question is do you still have those photos or did you lose them to the cloud?
All the photos that yet, that's a really good question. I don't know if I know, like I feel that's they're probably lingering somewhere, but they might be like okay, it's a hardware.
Yeah, all right, give me the give me the Shutterfly tie in. Okay, where this is going?
So Shutterfly, I was like, looking this up, I was like, who offers free photo storage? And nobody really does anymore. It used to be flicker. Flicker used to was oh yeah, back or is it? What is it twenty ten? I mean, come on, buddy, But Shutterfly apparently says you can get free unlimited photo storage if you buy a product once every eighteen months. Okay, And I was like, that seems like a reasonable trade off, because no, I'm not paying somebody money every single month.
How much did you say? Like how much storage? It's unlimited? Really? I think it's unlimited. Oh fascinating. Wait is it unlimited for the photos that you upload in order to create the product that they're selling you?
No?
I think like literally, you can just be like I think all your photos. I think so, yeah, maybe I need to go look at the fine print. Sorry for the sound effect, the pretty sure that maybe I yeah, unconsciously did the sound effect because that's what I think about it. I think it's fine. First of all, I love that you searched. Is there a I'm sure you chatted it or whatever, like, is there a free option
out there? Because I appreciate that that you're out there looking for You're looking for the deal, trying to find the work around. But the reason I asked about your Google Photos is because it can be so hard to keep up with all these different accounts for sure, and which photos you have stored all over the place. And this is coming from someone who has had a lot of experience when it comes to storing photos. I used to be a photographer, had tons, like tons and tons
of terabytes of images and files. And before that, I was a designer, and so my illustrator files, on my photoshop files like these were all files that I wanted to own and possess and to keep on my person And I personally resisted the cloud, but I ultimately I don't keep up with all the different spots where I've got on files, all my pictures stashed. We as a family, pay for the upgraded, upgraded ic cloud.
Okay, so you can get a family account as well, so we can kind of store it together.
Pay one thing, yeah yeah, yeah, okay, So that's that's the benefit. Is I pay one price for the two terabytes. It's ten bucks a month. And guess what all my photos are on there? Kate's iPhones backed up, My iPhone's backed up, my computer's backed up, the laptops backed up to that. That shared family plan. It makes it a little bit easier to get in there and control screen time settings. Her old ast oughters. Her iPhone is backed up onto there as well. It's I love how integrated
it is. Maybe do the ability to be able to look back at pictures from like twenty five years ago, like the featured photos. I love that. Yeah, I love that We've talked about memory dividends and having those images
as pictures like at your fingertips. I think it's worth it personally, and this is this is something I've done in the I guess maybe last year, a couple of years ago is when I finally said, all right, I'm gonna move all my entire photo library, you know, onto the cloud and under the web, as opposed to it living on a single single device that was backed up. But personally, I think it's I think it's massively worth okay, because I feel.
Like I'm living in like the early two thousands and I'm like the files are in the computer, like two thousand and five, I think I need to I need to have some sort of cloud backup, and maybe I just need to stop being a loser and just pony up to ten bucks. Well, if listeners have a suggestion something outside of the box, I would love to hear it, because for us, we have found that it's worth it and it works. And oh man, here's just I hate
all the notifications all the time. It's like you're still stone backed up your stuff.
I know, man, they're trying to get you.
I know, I feel like I'm being like pushed into this relationship.
Against my will. It feels like you're getting bullied. Yes, have you optimized for photo storage? It's where they it's like, have you have you looked into your photos your setting? I think I've done that recently at least. Basically, it stores on your device the like a low res version, and the high reds is living on the web on the clouds, so that way, if you recall the photo, it'll instantly download it basically and allow you to see the full reds. If you're like zooming in.
Okay, for something that still requires paying for the surface stuff, well that just requires or it requires less space on your actual phone.
Okay, so yeah, I don't know. I wanted to say one other benefit. Man, I don't want this to sound like an ad for iCloud, but Kate and I do a shared photo library as well, which means that any photo she takes in any photo I take, were able to see each other's photos, which is awesome. And I recently discovered this when you're putting together speaking of buying products from different photo companies, I was creating a photo
album for last year again, memory dividends. Like you know, I remember looking at photo albums as a kid, and the ability to look back at trips and stuff that we had going on, and seeing both of our photos together in one single stream to kind of pick the oh, oh, actually I want to go with that one instead, it's taken from a better angle, that kind of thing. I don't know. To me, that was yet another reason why I was so thankful to be able to have overlapping photo storage like that.
I'm just like so averse to bringing in another subscription into my life.
I resisted it for a long time too, dude, But I'm telling you, the water's fine. It's okay. If yeah, if you're willing to pay it up, it's really nice.
And if you're a listener out there and you're like, no, no, there's a better way forward, please tell me now. Yeah, all right, let's mention the beer we're having on this episode. It's called Cloak and Dagger. It's a Vienna lagger by
Incendiary Brewing. We'll give our thoughts on this one later on the episode, y boy, And if you have a money question we want to hear from you, you can go to how to money dot com, slash ask, or just literally record a voice member with your money question on your phone and send it over to us how to moneypot at gmail dot com. All right, Matt, let's take questions. This question is specifically about it's it's a frugal or cheap conundrum in regards to healthcare costs.
Hey, Jela, Matt, this is Daniel from Salt Lake City. I love the podcast, so thanks for all you guys. Do I have a question about whether something I'm considering is frugal or is just cheap. So We've had a lot of medical expenses recently, and I've been trying to get to discounts wherever possible. I applied for financial assistance, even though I didn't expect to qualify, and ultimately they deny me. So when I called the billing department, they told me the best discount they could do was just
ten percent. Now, I've done this before with other hospitals, and I've gotten a thirty percent discount before, but they wouldn't go any lower. So I asked if there was anything else they could do, and the billing specialists they mentioned something unconventional. They said, wait until the bill goes to their internal collections. You see. He explained that they don't report to the credit bureau and that once the account is in the collections, they often will discount at thirty, fifty,
maybe even seventy percent. So my question is would waiting for it to go to internal collections to get a steeper discount be considered frugal or is that crossing into cheap? Thanks guys for all your help.
Ooh a billing frugal or cheap? Joel and I wondered before we kick things off here, I want to say that ten percent discount, you know, that's just like the standard boiler plate. If anybody asks, you're allowed to give them ten percent without having to check with the manager that kind of thing. So that means it's like literally the lowest possible discount.
Yeah, offer, and you know if you play if you play ball a little bit harder, you can do better.
Totally. Yeah, And I think Daniel knows that. But I love that you are asking the question, Daniel, because medical debt is such a pain in the butt, as the vast majority of Americans have found out at one point or the other. But I'm glad you've gone down the financial assistance pathway and you know you ask for that discount. Those are the two most likely ways to have medical debt, either forgiven or to have that bill reduced in the
first place. But because it sounds like you make a pretty good income, the hospital is being a little stingy with you, which I get. But it is true that you can let this process just linger for a little bit longer in hopes of getting a fatter discount without financially harming yourself. And that's actually the key point. Yeah, that's worth driving home here.
And when you say let it linger longer, that's because there's essentially a twelve a twelve month timeframe that you have to work in here.
Three hundred and sixty five dagy race pier.
That's right where that this bill will not be reported to collections if it remains unpaid. Right at that point after that three hundred and sixty five days, that's when the unpaid debt can impact your credit, hurt your credit score, live on your credit report. So we want you to be aware of that deadline. But that means you've got like a lot of time, a lot of room to
wiggle in an attempt to negotiate this debt down. And you know, we don't want your desire to get a deal and to pay less have a long term impact on your credit score, because that can cascade, it can impact other areas of your life significantly in a negative way.
And so just know this.
You're probably going to get some letters in the mail with big red letters on them saying like final notice or something like that. But don't freak out. Bi'll overdo right. You get all sorts of stuff. And that's what I think causes a lot of people to pay before they're ready, because it strikes fear into your heart, understandably. So when you see those letters written on a mailer, that's that
you get in you know in snail mail. But this, this twelve month window essentially gives you a lot of time and a lot of leverage to wait for a better deal. Yeah, most people don't realize that that's their right. They don't know that that's how things work, and so because of that, they pay prematurely and they don't get maybe the discount or the breaking price that they deserve.
Yeah, it's it's like a game of chicken, right, because they're they're wanting you to flinch first, but the closer you get to the end of that, they're thinking, oh my gosh, this guy may may not actually be able to pay, so we're willing to take Lessah. And you know this is going to sound a bit sketchy where
you're waiting to get a better deal. But you know, I'm going to say that the entire healthcare system is a bit sketchy, and consumers have to figure out how it is they're going to navigate the system that isn't well constructed. It seems a bit unfair to a lot of folks. And in this case, we're gonna side with the patients. We're gonna side with you, Daniel, not for the hospitals out there and in large part this is
another reason why it's not sketchy. Is this grace period exists because oftentimes because most people have insurance, and so if you get a claim that's denied, well, it gives you time to fight that claim because the hospital wants you do have time, like they're doing this for you so that you can get your insurance company to pay them. They're like, help me, help you. So that's one of
the reasons. But also there can be medical billing errors, and so that gives you time to spend some time looking over the bill, making sure that things are coded correctly.
That's the word, right, Yeah, and to make sure wait a second, you charge me how much for that aspirin? Or wait you charged me for this thing that that seems that I didn't actually get that service at ridict yeh, yeah, you.
Can put fact on that. So it's not just the insurance company making errors, but it oftentimes can be the actual hospital making errors from time to time. And I want to go back to what you said too. I think how the money listeners in particular are at a distinct disadvantage here because I think if you are listening to the show, you are somebody who's a bit more organized.
You certainly have got financial goals, like in your sights, right, and so you see this thing show up and all of a sudden it looks like a financial threat, and you just want to pounce on it. You want to kept like immediately eliminate it. But what that means is you're actually paying more than you need to. Yeah.
Yeah, if you eradicate it too quickly, it means you've like you didn't use your leverage and you didn't use the possibility, like the tactics that are available to you to try and reduce that bill instead of just like paying the full price and getting it over with. I get that impulse, yeah, but ultimately that is going to cost you more than you need to pay.
Totally. I just think it's ironic that somebody who's maybe more disorganized out there yellow and yeah, is gonna be the one who's paying, like actually will be able to pay less because oh I hadn't seen that bill or I didn't even open that envelope. There's like three of them on the desk. I hadn't you know. Oh that was six months ago, and all of a sudden they've cut the bill by like thirty percent and talking about internally, oh maybe forty percent.
Right data, it's like best of both worlds for right because he is organized and he's ready, he's prepared, and he's looking for a discount. So it's not he's not just yellowing it. He's he's going to this eyes wide open and an attempt to save money. I also thought it was really interesting the person on the phone, and you will occasionally find this right where they toss out a piece of advice and it's kind of like you're played blackjack matter at casino and never oh, it's really fun.
I know how to play.
It's been a long time. Yeah, but we'll find some people are some of the dealers are a little more tight lipped than others. And when you're playing with people who don't know how to play blackjack, you are thankful when the dealer is a little more open about strategy because they're often they teach you a little bit, they help the person make a better move and that helps
everyone at the table. And and so this is one of those things where the person in customer service is not being tight lipped, there being a little hey in actually in our system, this is how it works and if you wait a little bit longer, they're basically telegraphing this to you.
They're like advocating on your behalf right.
Saying, well, I can't help you right now, but if you take this strategy, you can probably save in the long run. And so I think I would do what Daniel is suggesting. I would wait for it to go into collections in an attempt to work out a one time cash payment for a lower percentage.
Of the balance.
And Matt, you talked about ten percent being a crummy discount. What do you think maybe a good discount to shoot for would be.
Oh, I mean, I think it varies. So here's the thing, full disclosure. I've not done this personally, but I kind of am excited for the next medical again, just to be like, don't think I'm going to pay it for a little bit and see what happens. Like I think thirty percent seems like a slam dunk. Like I'm sorry that that is most definitely going to be offered to you.
Whether or not you get a forty percent or fifty percent or even higher, I think I don't know, but I do think the closer you get to the end of that runway they you know, collections, they start feeling a little bit nervous because beyond that, they're selling it for pennies on the dollar to an external collections agency, right, and at that point they're going to receive even less from a potential.
Yeah, I think I'll kind of treat this as a game a little bit, And Daniel's already kind of taking that gamification approach, But I think you're right. I think shooting for that fifty plus percent discount and then settling for a thirty percent discount, right, if if that's all that's offered to you after a significant time period of trying to work this out, it's going to be a little bit of a part time job. It's going to be a little bit like playing a whack a mole.
But ultimately, I think if you are intent on saving money on this bill and you kind of let things run their course while being active in the process, you can probably save a lot of money off this medical bill. And I don't know, maybe at some point we should probably publish like a how to guide like how to and you know what, Actually it's on my radar map to do a full episode on this soon.
So let's make that happen. Also sounds good. Actually, we're going to talk more about healthcare stuff hsas, but not from a medical standpoint, from an investing standpoint. We'll get to that and more right after this. All right, we'll back.
We got more of your money questions to get to. Let's get to a question now about student loans and how to proceed in a time where things are a little murky.
Hey, Matt and Joel, this is Adam in Chicago. So my question is about student loans. Currently, I qualify for public service loan forgiveness, but my loans are still in forbearance. Therefore payments are not considered qualifying. And that's fine for now, because I'm using that extra money on money Gear three to pay off high interest credit card debt through a zero percent interest balance transfer I did on a new card.
I have the save.
Plan right now. So what do you recommend I do when I finish paying off this credit card debt? Should I switch out of the plan to another like IDR payment or I don't know. I have no idea since the current administration and Congress, you know, are still debating things, so I'm kind of skipping. I know, money gears four and five thinking about you know, low interest debt, but I wanted to make sure I don't screw up any loan forgiveness stuff in the future. Thanks for your advice.
Cheers cheers indeed, Adam, And first off, I hope that Joel's recent conversation. So Joel talked with Stanley Tait, the student loan lawyer. He's awesome, Stanley Tait esquire. He's also like.
Laid back, which I so appreciate because we're talking about such an intent subject. There's so much like emotion around student loans, and there's so much frustration, and Stanley's just like chill.
Man, a literal, nice calming voice. Just also how and how he approaches student loans and what all is going on right now as well. But in addition to that, Adam, I love that you are using this forbearance period to make progress all on your other money goals, right like you are not increasing your spending, you're not counting your chickens before they hatch. To a certain extent. Here this multi year pause, man, it was such a good time for folks to do what it is that you are doing.
But sadly, most folks didn't heed that advice, and that's the advice that we were spouting. Oh, we were telling people just to hey, make hay well the sunshine and take advantage of.
Like don Quixote or something tilting at windmills. Because I don't know how many people are listening, but I definitely I know some how to money. Folks were listening, and we've heard from those people. Maybe Adam maybe he was listening, probably yes, heard. We've heard from those people who were able to do massive things, make huge strides by not having a student loan payment in their life for a while and by doing really intelligent stuff with that money
in that meantime. But yeah, as payments have re started, we have documented this too on the show Matt. It has put so many people in an even worse financial predicament because they got used to incorporating that student loan payment back into their budget. Prices are rising. I get it, You're like, great, now I've got a little more money on hand to make ends meet. But then when payments restart, people are like, holy crap, I don't know what to do. And it has put a lot of folks in a bind.
Obviously a lot of people behind on payments right now. And so Adam, specifically to your question, we would say, keep trying to pay off that zero percent interest credit card debt. The goal would be to eradicate it before your payment restarts, which is like maybe this spring or summer, like I don't know exactly when, and that's still kind of in limbo. But the big risk in not paying towards your loans while you're in this administrative forbearance is
racking up more debt because interest is accruing. But that actually isn't that big of a deal for you, right because you're working towards full debt forgiveness down the line. So even if the balance is getting bigger, hopefully it's that bigger balance essentially that's going to be forgiven down the road. And so this is just not as daunting to have a growing balance as someone who isn't working toward PSL left.
So that is true.
Yeah, And by the way, I know some people worry about the how long PSLF if it is going to stick around, and you know, talking with Stanley and just everything else I've seen, there is there's no danger of PSLF going away, so that that's not something plans that.
Are already in existence. Yes, it's yeah. I mean they're not going to say that they're grandfathered in, but you're not going to get kicked out of something that you are already in. Uh, there's actually yes. With the Safe Plan, Well, but that was like short was never actually implemented. I mean people got onto the plan, that is true, and then and then it was completely gunned and it was run pulled, it was gutted. So but PSLF is like inshoots. Yeah. Yeah,
student loan not just lore but actual policy. Yeah, but there's actually a chance that some of these months where you're not paying are going to count towards your PSLF timeline, which by the way, is Public Service loan forgiveness. It is not likely, but it might be possible because who knows the student loan space. It's a moving darker right now,
so it's tough to know. But man, if I were in your shoes, I would put in the Safe Plan for the time being as you basically get automatically enrolled into the new RAP that which is Repayment Assistance Plan, and we'll see what that looks like.
Yeah, it's like you're you're hanging on You're waiting for them to actually like finish pulling the rug. But for that time, you're you can be on the same rug.
Yeah, just stay put. There's no point in moving to a different repayment plan earlier than is necessary, especially with a potential for some of these months that you spent in four bearans to count towards your PSLF timeline, you're gonna hit it one of these days. So there's just no need to like rush to kick start payments again,
especially given your situation. Oh and by the way, you mentioned too as far as like him hopefully eliminating that high interest rate that credit card debt prior to student loans resuming, but also before that zero percent period of time before that expires as well, because that is gonna be a sky high rate compared to you know, whatever the rate is on his student loans. It's a great point. So it's a double waymie for you to get rid of that credit card debt and hopefully never enter into
it again. Yeah.
Yeah, that's a good point, because if you start paying on the student loan and it and you lose your vigor of paying on that credit card debt and then you're starting to pay interest on that puppy again, trying to do both. You have that singular focus right now, and you have a great timeline to pay it down
without paying interest. So I think that's why is Matt and ultimately Adam, we don't want you to trigger a higher payment or you know, hit your head against the wall trying to talk to student loan servicers who are backlogged.
When you're in a solid spot, the key is just to keep doing what you're doing, pay down the debt, build a saving s buffer so that you're ready for payments to resume, and then it's not going to be nearly as much of a financial shock in let's say June or July when those payments come back and you're migrated, because you're mentally prepared, right especially especially if you've saved up a few months worth of payments and you have
fewer debt obligations. That is the double whammy, Like I've got no credit card debt anymore, so that money's safe and can go towards other things, and at the same time you built up a little bit of cushion.
That's the best of both worlds, that's right. Yeah, we would be remiss to not mention the PSLF buyback program. So the way this works, if you are close to forgiveness, this is a way for you to retroactively turn months that didn't count as qualifying PSLF payments. So in your case, it's the months that you spent in fourbearans into qualifying months by paying what you would have paid under an
income driven an IDR plan during those months. But you can only take advantage of that if you have enough cash on hand to get you exactly to that one hundred and twenty month mark. And so it's like a very I don't know, it's a very precise maneuver. Yeah, and if you are really close to being out of that, I think that's something. It's sort of like some folks who are just like, man, I'm thinking about folks who have like a mortgage and they're just like, I'm just
gonna I want to be done with it. So that's up to you and whether that makes sense from giving your financial situation.
And it seems like with Adams particulars, there are just other things that are higher private.
He's got other goals. I think he's absolutely just going to let this scene. He's going to write it out and just have a ton forgiven.
But for a handful of folks out there that could make sense, I guess it's worth at least considering the PSLF buy back program. If you're like, oh man, I'm within shouting distance, I'm so close, and i could get rid of it sooner rather than later, and I've got the cash on hand than boom, I don't know, it's at least worth kind of running the numbers and thinking through it. That's right, Joel.
Let's hear from a listener who is using a retirement accounts that is even sweeter than the roth IRA. Let's here from Abbie, Hi, Matt, and Joel.
This is Abby from Iowa. I have a quick question regarding HSA money distributions. My husband and I are in our late thirties with two children and working to currently grow our HSA funds and saving our receipts to make the most of this count in our retirement years. My question has to do with receipts regarding our children's medical expenses.
At the moment, when they're dependents, we can use their expenses to be reimbursed, but will this still be the case once they're over twenty six and off our insurance plans. For example, my eight year old is about to get braces. Will we be able to use this receipt twenty years down the road when she's no longer a dependent or will it only be my husband and I's expenses that we can get reimbursed for. Thanks for any information you can give us, and go.
Hawks, Matt. Do you also root for the Hawks? That is that a sports team? I think so. I think it's a sports ball reference the Atlanta Hawks. She's in Iowa. Why is she reading for the Hawks? Is that the Hawkeyes? Is that?
Maybe this the Iowah Hawk eyes and maybe they call them Hawks for short.
Oh, I'm sure that that makes more sense.
I know the mascots for most of these teams because the.
Picture of the logo, it's got the circle with the Hawks outline. Classic I used to care about. From a graphic design standpoint, I love it. But from an actual sports ball standpoint, not quite my thing.
Man, I feel so out of the loop on sports these days.
But I gosh, I used to like the sport of running. That's what you're obsessed with.
Yeah, that's like a solo pursuiting most part, though, h It used to be like gathering with friends to watch.
You run with more friends than anybody I've ever heard of. That's true. I have a lot of running buddies, which I think when a start. Yeah, no, we'll talk about this.
Okay, enough of the sports talk, but let's let's let's talk about hsas. Matt I recently spoke with had a money listener who is retired, and he's so thrilled that he built up such a big HSA balance and he's he's like over over he was glowing about the flexibility that the account affords him, like the ability to tap it without paying a dime of tax based on healthcare costs and he accrued decades before. He was just like
over the moon with how incredible the HSA is. And and this sounds like the boat Abby's gonna find herself in if she continues down this path. We got to address our question, We got get some of the nitty gritties. But that's what makes the HSA. You're glad to hear that she's doing it. Yeah, And it's just fun to hear from somebody who's thirty years down the road and is like, oh, yeah, it's all, it's all.
It's cracked up to be uh huh, yeah, totally. Okay, let's talk about like the general mechanics of the health savings account, because contrary to its name, the savings part, it's actually more of an investing account. But we believe that they are by far the stealthiest way to save for retirement because of the tax advantages that you accrue. They're not just tax advantage. You can literally like avoid taxes completely for the money that you put into an HSA.
And then of course, in addition to that, not only are you just stashing those dollars away, but you are investing those dollars. This is how this is a retirement account. You are not interrupting the compounding unnecessarily a la Charlie Munger, Right, there's HSA dollars get to they get to live to grow another day. And what you're doing is you're paying for your medical expenses out of pocket in order to keep those HSA dollars untouched.
And it's a really cool account if you used it like a health savings account like as prescribed, right, it's cool just in the sense that you can avoid a bunch of taxation, but it's super duper extra cool if you invest and you're like growing a stockpile of money that never gets taxed, right, that completely avoids the taxman. That's what makes it like on steroids, superpower, supercharged. So let's talk about the specifics and the specifics of Abbey's question.
Will your HSA still benefit you in the same way once your kids grow up? That's kind of the heart of your question, And the answer is yes. The key, the clutch thing to know is essentially this that you're the HSA eligibility is determined at the time the medical expense is incurred, not when you reimburse yourself. So doesn't really matter like what's going on with your family life,
how old you are, how far down the road. Let's say your kid is on your health insurance policy right now, right, and the expense occurs in twenty twenty six, you can still tap your HSA thirty years later in twenty fifty six, after it's grown a ton, right, And even if your child then who is going to be a full grown adult, is not on your policy.
So we're talking.
I think she said her daughter was her child was eight years old, and so she to get braces, daughter would be thirty eight years old brace is long gone, super straight teeth hopefully.
Yeah, where your retainer?
Yeah, I know there's gonna be allowing to go back and do braces as an adult again, to rectify from not where I would wear my retainer every night.
Match just for that reason. Do you really? Yeah? Oh, good for you every night. I don't. We don't do any sleepovers, although no, I knew that, Like, well, we've traveled together and yeah, it's just been a minute. I keep it around. I'm not taking too many mental notes of your your retainer container, my hygie, what do you call it? Do you call it a retainer container? Retainer box? I guess yeah, never thought about it, like me and neither.
But really, this it's all about what was going on when the expense was initially incurred.
Initially.
Yeah, it doesn't matter that your child is no longer on your insurance policy, or that it's many decades later. Yeah, it's not expected that she or any or either of your kids will be on your insurance. Like like literally, you could envision the future where you aren't even on a high deductible healthcare plan, where you even have access to an HSA, right, and so would then the expenses that you incurred back when you did.
Would those qualify absolutely one percent? Yes, for sure.
Yeah.
You could be in a different employer, a completely different insurance company, and or beginning your own policy on the open market or something like that, and you'd still it wouldn't do anything about your past expenses.
This week will be you could be on the single pair of government plan that we're all set to beyond. At the rate that we're going, we're whatever. Yeah, like yeah, regardless of what the future holds, it doesn't matter because it's we're talking about what happened here in the past. Never be revoked. It's not going to be deemed ineligible. But of course you're going to want to keep the
receipts in order to prove eligibility. This is, of course, because if you were to get audited by the IRS down the road, you're gonna want to have a trail of receipts. You're gonna want to have tax returns to show first of all that your daughter was you're dependent when the braces were put on, but also just to show improve the exact amounts of the expenses that you incurred. And I'm not talking about say like you don't have
to keep up with the literal receipts. But even just like digital receipts or even snaping a photo of it, I cannot imagine the future where you're gonna where you would need to be able to literally show physical receipts as opposed to just having be organized about it, like have your Google Drive HSA receipt folder. And normally I would also say to keep a little spreadsheet or you've got the date, you know, in order to stay organized.
You've got the date, You've got a little description of the medical procedure or the product or the medicine or whatever, as well as the price. That way you have a running total and so you know, oh, this is how much I can completely tax free take out of my HSA. Yeah. I feel differently about that nogel, you know why, Because
of AI. This seems like such a perfect job to be able to upload a bunch of receipts and say, hey, keep trying this for me, yes, or just like you can do it once a year and just be like, hey, give me a total amount, give me data columns of you know, date description where it was incurred, a total amount. Give me some also export that create that as a Google sheet unless the AI.
Starts to blackmail you with your own health records, which is you never now man.
This just saying this is a good use case for a large language model to be able to take care of that for you.
True, But I think what you're getting at too is really important. Not only are you keeping those receipts to prove to the IRS in the case it's necessary, but you're also documenting all that stuff. So basically it's a good good idea to keep track of the eligible healthcare procedures you've gone through so that you have a decent unders of how much money you have access to tax free without you know, violating the essence of the HSA.
That's right. It also makes sense too from like, if I could picture a scenario where like five ten years in the future, if you are trying to decide, oh, do I put more money into my HSA that I'm still eligible for that I still have or should I contribute more over here, and if you're looking at some of your medical expenses and you're and you're incredibly healthy, and actually the teeth never needed braces to begin with, And if I could see a scenario where let's say
you've got forty thousand dollars thirty forty thousand dollars in there, and you've only occurred like seven thousand and medical expenses. I could see a scenario maybe where I would even kind of back off a little bit if I had some other financial goals. Right, it's just to be able to provide that data set for you so that you can make the most informed decision off in the future without getting a little too far over your skis.
Yeah, but if you don't have enough medical expenses, right, that HSA down the road can turn into a glorified IRA. And so yeah, look into no how.
That tax advantaged. But you just have to pay one set of taxes, that's right, instead of four.
I think in some ways this helps make the friction and the cost of braces feel a little less onerousy, even though it's still it's so expensive. And I realized I've got two kids kind of on that and in the orthodontria plan right now, what about the third you think he's going to begin in, No, he's totally gonna do. He's just like he's only got like maybe three or four big kid teeth right now. But the two front ones they are. I can already tell he's gonna need it at some point.
So yeah, it's expensive. Oh man, it makes me think of it. So our school every year we do an auction and items get donated. It's like a fundraiser or whatever. And I saw that local Orthodoge Orthodonist office donated like a five thousand dollars package, which that's like one kid to get in through braces. Oh is it? Oh yeah? Is that like one year? No, I mean that's like or that's like a whole that's like a few years worth of fixing some teeth. We basically prepaid. Yeah.
Yeah, there was like a deal to say, yeah, all right, we're gonna pay for the treed in the next few years for this kid in one fell swoop.
And it's just you're just saying, I'll put that on your radar because if you can get in there, nobody. You know what if you bid like three four hundred bucks on it, snag a five thousand dollars package, that's like a heavy sweet that's a reduced that's the kind of gift card that you're all about, right where you're getting four thousand dollars worth of food for four hundred dollars.
That's my chan, that's my chant. All right, we got more of your money questions to get to, including we're gonna talk about financial infidelity, to delve into that and more right after this.
All right, buddy, we are back from the break. It is now time for the Facebook question of the week, which is from Tara. She writes, Hello, I like that. I like that She started with Hello, my husband and I are expecting our first baby in June. I'd love to hear your financial tips for a growing family. We are in money gear seven and have started a savings
bucket for hospital bills. Holy caw. I love that. On top of it already, yeah, I mean, aside from money gear seven, I guess let's talk about we're in a role. We're talking a lot about medical stuff, hospital bills and whatnot. But I love that you are already saving ahead for this, Tara.
How big of a savings bucket or a sinking phone you're gonna need is going to depend on your insurance, of course, but if you can figure out the likely bill amounts ahead of time via a good faith estimate, you can start to aim to have that amount on hand. I'm guessing for a lot of folks it's probably around three grand.
Through solid assure. Yeah, so much depends on your insurance company.
But be ready to fight individual items on that bill if they're excessive, sort of like we've already discussed, and depending on your income, you might qualify for partial or full forgiveness of that final bill. I kind of think maybe that's not the case. So considering the fact that she is in money Gear number seven, which is such an advanced kind of place to be, I feel like
when you're having your normally it's like first kid. Also, uh, we need new tires on the car, or you know, the big sister has got orthodogical, you know, like all the things are hitting you when you're having a baby. But I love that they are in a position to where these aren't some of the stresses that they're experiencing.
The one reason that makes me think there's at least a chance that they qualify it for financial assistance is because it's based on income. It's not based on networth. So who knows. I guess she could say somebody.
Started being diligence, Yeah at age sixteen, built out that massive net Yeah, massive net worth, and isn't making its unknown there's a chance yep.
So I think another thing to put on your radar is five twenty nine plan. It's it's not something we're typically recommending to new parents, but or at least beyond just a starter amount to get the clock ticking on those accounts. But you've already taken care of your own savings, right You're investing incredibly well. Not sure what state you live in, but there's a good chance you can reduce your state tax bill while also investing for your baby's future.
So that could be like a win win thing right there. And so whether that five twenty nine money is intended for private school, whether it's college, whether it's for you know, a roth Ira starter for your baby down the road as well, which is one of the cool things right about five twenty nine plans these days. So you can turn money that you stick into that that's not needed
for college into roth Ira dollars later on. Getting some money flowing in that direction I think right now is something we strongly consider totally.
Yeah, and then beyond like specific accounts, man, I would give yourself permission to spend as much time with that baby as you want, like when you are in a personal finance group chat or a Facebook group and ask another folks, there's going to be a whole lot of chatter about, yeah, this account and obviously that's where your mind's at, and obviously it's paid off well. Like, look at the fact that you're in money gear seven and
you're having your first kid. But the ability and I don't know, you probably heard people say this toil, but it's your presence, not presents like toys and stuff and all the material wealth, the ability for you to provide just so many memories being there for your kid and just like fun stuff that you do together as a like, it's amazing experiences that you can be a part of. But then also just some of the routine day to day living where you are incredibly present and interacting in
a just life giving, very rich way. Man, I think that's amazing, right, because as your kid gets older, they can, like money is fungible, they can get their own money. At some point they will be making their own money. But as far as memory is really not for like you know, a while, that's a while, but like it's something that they can always create more of. Whereas the time that they're going to be able to spend with you the memories that involve you in a significant way.
That is a very limited resource. It's something I think about more as I get older, too, where I'm just like, yeah, yeah, it's I care less about my kid's financial future as opposed to how I'm raising them and the lessons I'm imparting upon them and kind of the memories that you know, we're trying to basically instill in them. Yeah, those lessons.
What you're saying essentially is like you're in money yourself and act like it, like take advantage of some of the freedom and independence that you have earned over a long period of doing the right stuff. And I think I think that's spot on. I think it's really easy to think I gotta do more. I can keep doing more, Okay,
I got to keep I gotta work more. So I can, you know, max out the five twenty nine fund, because that's the next thing Matt and Joel said, and yeah, we mentioned that, right, but we also want to balance it out here and say, you're in money gear seven, you have a lot of optionality, don't don't waste that. I guess when these are precious times, totally agree, all right. Next question, This one comes from anonymous who says, has anyone dealt with financial infidelity over the holidays? My wife
racked up six thousand dollars in credit card debt. It was unknown to me until I started pressing more on how she was paying for all the packages coming.
To the house.
It upsets me more because this is the second or third time it's happened since getting married. We're agreeing on no more every day credit card usage and only using it when both in agreement. To add, she is going through therapy and doing EMD are specifically right now, so at times she's not in the best headspace. That's kind of a type of therapy mat where like you're it's attempting to bring up earlier childhood memories that might be
impressed about that eye movement something. Yeah, yeah, well, I swear actually we've the eyeball therapy. We've had a guest on who's gone through that as well.
Oh really was it?
Ed Combs, who's a therapist who money therapist too, talked about that with us. But the end of this question says, it's just frustrating to me because we literally just built our emergency fund and now we are six thousand dollars in credit card debt. The card is only in her name, by the way, I don't know what to do. I'm tired of paying off debt.
Man, this is this is awful, Like it totally sucks, and I feel like I hear the frustration in this this individual's voice hundred percent. Yeah, it's a really tough position to be in. And I'm also just a little I feel a little unsure to provide advice when man, like you're hearing one side of the argument, you know, because I'm sure there's a lot of other folks who might immediately be like, well, what about this? And have you done this? And does she does she have a voice?
You know, I'm talking about the frustration in his voice, like does does she have an ability to say where the money is being spent at all? And maybe she feels the need to to kind of want to hide some of the spending. So I'm not at all discounting this poster's feelings and the point of frustration, right like, yeah, you just established that emergency fund and then to immediately get sort of not reset sound, you know, not reset back to zero. But even in the red is a
difficult spot to be and it is it is. I was.
I was actually truly impressed with the empathy the advice that a lot of how to money listeners offered in the Facebook group in answer to this question. I want to say, like, addiction is real, too, write we should highlight that. And I think we're living in a society with a lot more addiction than we ever have lived in before. And I don't think that's hyperbobole and I
don't think that's just me discounting the past. I think it's just true and spending money triggers dopamine releases that are akin to a lot of other addictions that exist in our society, like gambling, pornography, stuff like that. So we're just seeing more and more people be succumbing to
addiction because it's easier than ever. I was talking to a friend recently, Matt, and he was like, you know, I don't think nearly as many people were addicted to pornography back in the day, because guess what, it wasn't at your fingertips and free and like, yeah, you know, everywhere in front of you. And I was like, you're probably right, Like it just was harder to be addicted to something like that. Same with gambling.
You walked into the gas station, you're probably like, like, I don't want anyone to see me, like as my car kind of tucked her on the back. Where like say anything with gambling, right, like going to an actual casino, there's something about Yeah, like you said, physically going somewhere as opposed to something being in your pocket and at your fingertips. Yes, one of the ways. Yeah, that technology
has not served us as well. But I want to discount I guess the addiction reality that she might be going through and how she there's like a compulsive behavior in all likelihood that she's dealing with. Yeah, So I'm gonna I'm going to preface everything I'm about to say with the assumption that the wife is on board, right, because I was kind of coming at it from like, man, we're talking about this couple and the wife isn't present
to be able to provide more information. But I'm going to assume that she's like, yes, I don't want to do this anymore. I'm like, this is awful, this is harming us financially. Let's work together to make this happen.
Well, it sounds like they are agreeing on some things to her going to therapy, not using the credit card in the way it's been used to.
So yeah, it sounds like you're right. I guess I thought that maybe the therapy was for something else as well. He didn't say it was specifically for the spending or the financial but yeah, let's assume that that is the case and she's proactively taking steps and that means she's totally on board, which me like in my mind, then it comes more down to like the mechanics, like how do we prevent you, how do we remove this temptation?
How do we remove this addiction from you? And he talked about how it's these packages that are just continue to show up on the doorstep like day after day after day, and he's just like, wait a minute, how are you paying for all of this? And I think what that means is removing billing information, so like Amazon, like it's all saved and so they for me to search something and hit click to buy. Oh they like you said, like the technology, they've lubricated the process and
there is no friction at all in doing that. But what that also means, I think is removing the saved credit card information on your browser, because the ability to just do the thumb print and all of a sudden, it's like or on your phone double click to pay. That means removing the credit card information from Safari or whatever browser you use on the computer. It means removing credit cards from the phone that way. You're not able
to do it that way. And then the step be like there are still ways around it, right, like what if she opensf she opens like another credit card, and if she's willing, I think it also means locking down her credit. It means going into Equifax trans Union experience because if her not locked, I'm sorry, because that's the pay for service. You don't want to lock it. You want to freeze it. Make sure that junk's frozen, because if your credit is frozen, she cannot open, which is
further law. It's totally free doesn't take very long at ought to do that, and that prevents her access to new credit as well. And again I prefaced all this with making sure that she's on board, because I think I could see a twisted scenario where it's just like no, man like that is so controlling, that is so like demeaning for you to do that to me, you know, like I could hear her saying, yeah, he doesn't let me do anything, like I can't buy anything, like I
have to do everything through him. That's not a good situation. That's if that's the situation you're in, y'all need to go to counseling for sure, not just financial counseling, but like there are deeper there's deeper issues at hand. But if it's more about, oh, what steps do we need to take to make this harder or to make it make possibly like impossible for me to spend I think that that's a way to you know, those are some proactive steps to take, Like it makes me like, let's
real quick, let's reverse the roles. Imagine this anonymous poster. What if he always got drunk and then drove somewhere. Like let's say that he's gotten multiple wise and has crashed the car two or three times since you've been married, Dude, what would you do? You would ask your wife to
take the keys from you. It's just like, you know what, I can't drive anymore, Like I obviously cannot control myself whatever it is my impulse, But I don't always ride with a friend, always take uber yeah, take an uber ride your butt like there are so many other options. It's not it's riding your bike either. It's probably not gonna do yeah, probably not that. Yeah, it's not in fantalizing. It's just empowering you to make sure that you're taking the proper steps.
That's all last thing I think, and it it kind of dovetails with what you're What you're saying right now, I think is to avoid shame in these conversations. It can be so hard because her reckless spending has hurt you emotionally, it's harmed your finances. It sets you back after you've achieved some of the goals that you want and it feels like you got to go after them
from square one again. But the more you make her feel ashamed of her past mistakes and and you know things that that I think it's just going to help. The pattern is going to repeat, right, because shame is cyclical in that way. And so yeah, even though it's tough to feel like you're working together and on the same team because it feels like she's working against you, you guys are on the same team. So going to
counseling together can be a helpful endeavor. I think for a lot of people in a relationship like this, it can feel like it's a that's her problem, she's got to get over, she's got to make a change for us to be okay. But working through it together with the help of a third party could save your marriage, and it could save your finances. So financial therapists exists, We've had them on the show before. They might be kind of this perfect intersection of the help you need
right now. But I guess I just want to encourage you. It's going to take some humility, some love, and some compassion to avoid keeping scorn and shame on your wife for this. But I would say that's a really important part of the solution.
All right, we avoided Do we avoid any potential landlines? Hopefully they don't screw it up. Hopefully knows. Something that's easier to talk about is the beer that you and I enjoyed during this episode, which was a Cloak and Dagger. This is a Vana Lagger by Incendiary Brewing Company, donated to the show by Brandon. What did you think of this beer, buddy, dude?
This is a rare style that we almost never have the n I feel like maybe our friends at Halfway Crooks brew a good one of these, Oh yeah, I've had in quite some time.
But it's more of that traditional European style. It's old school. This isn't some new whizbang beer style that's got cereal in it. No, this is a beer style. It's been around for hundreds and hundreds of beers. It's got the original cereal in it, like oats, yeah, malt exactly.
No fruit loops in here, no, no, no, and no artificial dies in this and this beer this was to me. It was like nice, rich caramel vibes. It was super well balanced, and it just made me be like, man, why I do gravitate towards a certain a couple of certain styles of beers that I typically think of as my favorites. But there's something just nice and approachable and delightful about this beer.
So refreshing, and not because it's like cold and wet and I'm thirsty, but just because it's not something that we've had a ton of, and it's such a like it's even in the name right, a Vienna lager. It's not like it's not like a Las Vegas lagger that like some brewer just like came up with. This is something that's been around for like thousands of years, right, thousands? It's maybe probably right. I don't know much about me.
Well, I guess beer history that'd be in Austria and beer really kind of well, beer didn't start in Germany, but German. When was it that the Germans were at the heyday of their brewing?
I don't know. We didn't know our fifteen hundreds. All I know is that there is it's probably been around it fifteen four hundred years. There is a beer recipe that is found that was found in Egypt on hieroglyphs, like on some sort of hero glyphs or hieroglyphs. I don't know how you said, hieroglyphs, hieroglyphics, hieroglyphics.
Well that was it a dogfish head that kind of brought We had that beer like five years ago.
I remember talking about it then. Was it good? I think?
So?
Okay, that was so.
Long ago, I can't I can't remember, and we've had so many beers since then. It's true, all right, Well, yeah, this was a fun one. Glad we got to have this beer. Thank you to Brandon for donating it.
Our way.
We really appreciate it. And by the if you have a money question, please do send it our way. We'd love to take yours next week on the show Matt. Until next time, best friends out and.
Best Friends out, there's still constructions to doing. This time, something to be done.