Friday Flight - A New Refi Fee & Additional Unemployment Benefits Rolling Out #243

You you decided to start driving for Uber again. No, although I don't know if I've ever mentioned on the podcast that I did one ride, one little promotion deal that they're doing, and you scored a ton of money, a thousand dollars to do one rider. Lift Lift had this crazy promotion one time where if you would sign them through a driver and you got approved within a week and you gave just one ride, Like they totally bungled the promotion and they should not have made a Yeah,

I think it was a mistake. Was it was this sort of like city they like they just paid the wire transfer. The wire transfer like somebody hit the wrong button and it just forked over. Like hundreds of millions of dollars exactly weren't supposed to. They like almost immediately changed the terms, like, oh no, you must give at least forty rides. But I got in when it was just one ride, and so yeah, I gave one ride, one lift ride. I made basically a thousand and three

dollars because the ride was super quick. But um, but yeah, so that was that was fun. But I just got reminded the other night when I did I never take Uber and left rides like it's almost never happens. But I mentioned a couple of weeks ago that I came back from Memphis on on a Southwest flight and to get home, my you know, Uber lift ride cost half as much as my freaking flight was crazy. But I looked it up on Lift and I was like, man, I'm gonna hit Hike instead of this. That's that's ridiculous.

It was like thirty four bucks to get home. And then I was like, man, I need to check out Uber, Like I don't. I don't know. I think I just had been going to Lift by default, and I end up checking out Uber and it was twelve dollars cheaper. So I guess I just assumed that their way their algorithms worked, they were pretty much always consistently priced the same.

But no, they're not like there's a vast disparity. And so before you book a ride, check both apps real quick before you press the button to get the car coming your way, UM, so that you can make sure that you're not spending too much on the ride that's gonna take you to wherever you need to get to go. Yeah, I mean recently, I feel like Uber they've kind of had their name dragged through the mud a little bit.

You know, they've been involved through their entire company's history basically, and because of that, I feel like more folks are taking lift Um. It's kind of seem as like maybe the slightly higher end view of right sharing. I don't know, maybe that's my personal opinion of it. No, I think that's probably that's probably true. I think where it is, people assume it's better customer service. It's uh, but quality drivers, you know. I don't know if that's the case, though.

I think most drivers, if you're looking to say it twelve bucks, yeah, it's certainly worth checking another app. You know, most drivers that I've talked to you because I like to talk and I talked to drivers when I'm when I'm getting somewhere, many of them say that they drive

for both and they interchange the apps and and so. Yeah, a lot of search pricing where the demand is yeah, completely so uh, just a little word of the wise tip before you book a ride share, check both platforms to shop it a little bit, shop around, like it's easy for us to fall into ruts. Actually, next week we're talking about paying for convenience than just the different charges and fees associated with that. But it's easy to

pay more because we're creatures. Have happened true? All right, But before we get to our Friday flag, one final question for you on this topic, because I mentioned that I thought about hitchhiking. Have you ever hitchhiked? And is hitchhiking for ruler cheap? Ah? Man, That's such a difficult question because so much of it depends on the context, you know, like like who are you with, Like what time of day is it, where are you located? Like how many cars are driving down the road? Um, So

have I ever hitchhike? I was about to say no, and I was buying myself time by like throwing out all those factors saying too. But I just remembered that Kate and I, well, I guess technically hitchhiked in Atlanta United Game last year. And so we wanted to get down to this lower level like in Atlanta, it's called the Gulch and it's where all the tail getting happens.

It's where all the supporters clubs party. And we had ridden our bikes to the bends where Atlanta plays their matches, and we were trying to meet some folks down below. But the easiest and most direct and fastest way to get down there it was to go down this weird, crazy ramp that only cars are allowed to go down. Uh, and there is an officer there keeping you from walking down because there's no sidewalk and it's literally only like

ten ft wide. It can barely fit cars. And so I turned to Kate and I said, I'm not gonna walk like a mile to get all the way around to go down the steps where you're supposed to go down. It's like, let's just see if you can hop in someone's car, because cars are pulling down there the park. It's like the shortest hitchhike of all time. Yeah, so technically it wasn't a hitchhike. I think so, But we

just kind of knocked on someone's window. They're like, hey, can we ride with you to get to get down there, And they kind of looked at each other like, yeah, sure, this is pre COVID. Maybe definitely pre COVID. We're not freaked out by that. But we jumped in the back of this little pickup truck had It was a four door, so they didn't have to like get out and open

their doors or anything. There's a small pickup truck, and I will say it did kind of freak us out because we jumped in and there are knives all over the floor, but they're like kitchen knives. And I don't know if they like sell those really sharp knives door to doors something, but they're chefs kitchen knives on the floorboards. And we saw that as we're climbing and can I kind of looked at each other. Kind of freaked us

out a little bit. Maybe think of the beer commercials a bud light with the chainsaw guy on the side of the road. Yeah, so ye had a case of beer. My my hitchhiking eggs. Have he done it? I have? I did it? With like two of my buddies, and one of my buddies had like really long black hair at the time and like a beard. And it was right at the time when those Budweiser commercials have come out, and so he like out of cardboard, cut a chainsaw

and a six pack of bud Light. And I think that I don't know if that helped or hurt our chances are getting ride, but we did get a couple of rides. I think we went from Portland to Seattle if I remember correctly. So that's like legit hitchhiking. That was a real one. Yeah, I love it, dude. Well, I think in your case, you're you had three friends and so there's certainly power in numbers. But yeah, you

just never know. Man, there's a bunch of weirdos out there and you don't that's to say they want to get picked up by the wrong person, that's true. I guess I was banking on the fact that we were the biggest weirdos in that situation. Exactly when you're the biggest weirdo, when you are the largest risk, then oh yeah, try to hit hitchhike with whoever you can. Exactly if he can make it happen. All right, let's get onto

the Friday flight bit. And uh yeah, I'm interested to hear if any of our listeners are into hitchhiking or have ever done it. Um, but it's gotta be some good stories out there. Got to be some good ones. Um. But all right, so let's get onto the stories that we found interesting this week. The first one our friend

Len Penzo. He he has a personal finance blog and every year he does this brown bag Lunch survey and his twelfth annual survey just came out and and so yeah, I love his cost analysis that he runs on the ten most popular sandwiches to figure out which is the most affordable brown bag lunch. And not surprisingly, Matt the Bologny sandwich came in first. It was the most affordable sandwich that he tested, at only thirty four cents of sandwich.

I think he said it's been the most affordable for eight years running like only like a couple of times the P, B and J kind of you know, surpass it's the number one spot. But it's not so worth mentioning too that. I mean, this is kind of like a fun thing. It's not like he's necessarily like sitting down and making like scientifically equal sandwiches. He's just making normal sandwiches and figuring out how much it costs just

to give folks a frame of reference. I appreciate it that he's doing this leg work because this is the kind of stuff that normal people need to know. Right, But I guess the big question is who actually really wants to eat a blogny sandwich, right, dude? I hated blowny sandwiches as a kid, and I hate them now like I would much rather. I mean, I just mentioned P B and J. I love P B and J in particular, like you toasted and kind of get that PP ANDJ on a toasted sandwich, so good dade you

a little crunch, I love it. And also to one of the other ones he had on there was an egg salad sandwich like I would personally much rather enjoy that. You know, it does cost more, but even still, it's only at seventy one cents per sandwich. Plus I gotta think that eggs are gonna be way better for you, way more nutritious than bologney. You can even splurge a little bit and go for a delicious belt where the cost comes in at two dollars and eighty six cents

per sandwich, which is way expensive. But even still, man, you know that's still over a dollar are less in the cost of a big mac. Bottom line, you can have massive savings if you can avoid going out to eat for lunch, which I think fewer folks are doing anyway these days because of COVID. More of us are working from home, and I think more of us are making our own sandwiches too, so for sure, and I pretty much still stick to my cheap lunch of carrots,

apples and almonds almost every day. Man, I still gotta jump on that. You gotta jump on the leftover train, dude, like leftover times. But it's all leftovers are the best, like, especially if you're going into an office environment the left out, Like I get that you might offend some of your coworkers or something by by heating it up and eating

and your I don't know, I forget that, man. I'll totally show up with a bunch of curry do get in the microwave and then after that burned some popcorn while on that at Yeah, you would, you're that kind of guy. I never did that when I worked in the office. All right, let's get onto the next story. So there's evidence that traditional one year leases are actually

on the decline right now. That's because people are looking for for shorter term leases and they're looking for more flexibility in their living situation, especially because of the economic uncertainty and the potential inability for people to be able to pay for rent. They're looking for less stringent, least terms,

which makes a whole lot of sense. And Matt Um, we're both landlords, and I've had a couple of instances where tenants have had to request greater flexibility in payments, and in some cases I've essentially foregone the lease and allowed tenants to go month to month. It'll be interesting to see too, though, if corporate landlords kind of follow

the same suit. I think mom and pop landlords have a little more flexibility with what they're able to offer people, and often to make it in the business as a mom and pop landlord, you have to be more flexible. Um. Yeah, So it'll be interesting to see if these corporate landlords, the bigger apartment complexes are going to offer some of

those same flexible terms to to tenants. Right now. Yeah, I think a good argument could be made that corporate landlords might be more able to, but just less willing. You know, the mom and Bob landlords might be just as able to, or maybe honestly even less able, because a lot of individual landlords kind of count on that income to provide for their families to pay for their mortgage. Yeah, exactly, I mean that's me. And so a large part of it is that I think a lot of times we're

just more willing to. We don't have like that corporate shield where we're focused on profits and you know, sticking it to our renters. There's an actual relationship there too, exactly. Yeah, and you know, and so you know. The good news here, though, is that from a renter or a possible tendants point of view, is that you might be able to score at least renewal at an amount that's lower than what

you are currently paying. I think this is especially true if you live in an apartment with a corporate landlord, you know, and you're seeing your same unit may be listed for less. You know, if your least renewal is coming up soon, you have a pretty good argument to negotiate down what you pay, you know, or maybe even get a month for free if you are going to resign, or maybe you might even be able to go months

a month. Just know that if you don't have a lease in place, though, that your rent can go up with very little notice. So just know the market, and we would encourage you to to ask for better terms if you are in a position like that. Yeah, alright, Matt. So since we're on the note of housing, let's get to something else. This one is specifically for people who own a home and are looking to refinance right now.

If you've been planning on refinancing your home like so many people have recently, and so many people are thinking about doing as rates have ticked down to to just insanely low levels. We'll make sure you do it before September, because Fannie May and Freddie Mack are charging a new

fee for anybody doing a refinance starting next month. A half percent fee will be added to refis as Fanny and Freddie are looking to make up for for some of the increased risk of defaults and foreclosures due to the pandemic, and since Fannie and Freddie back about half of the mortgages in the US, this fee is likely to affect a lot of individuals, and especially when we're

in the midst of a refi boom. You know, this extra half a percent cost could had just a major barrier to people, uh in regards to refinancing and whether it still makes sense or not. Yeah, that's true, man, And you know it's worth noting too that the way that this additional fee works is that Fannie and Freddy that they are charging the banks this fee, not us as homeowners directly, and also it only applies to refis,

not purchases, so home buyers don't have to worry about this. However, given the huge demand like you just mentioned, Jill in refinancing lately, you know, due to these super low rates like those banks are likely going to pass that fee allowing to consumers. There's no reason for them necessarily to just absor of that cost when they have way more refinances than they can even currently process. I see it

as a simple illustration of supply and demand. But even still, even with the fee, a refight these days is likely to still be a great move for a lot of folks, especially if they have an interest rate that it might be like a point higher than what they can currently get now. In my mind, that's a good time to seriously consider it. Yeah, for sure, but fees suck. I hate paying fees. And when I see headlines at a new fees being instituted, I'm like, man, is there is

there a way around that? Can we like not have that fee? Because because fees are just the worst. And yeah, and I understand that Fannie and Ferdy are trying to essentially protect themselves againsto potential future losses, but I don't know, it's a crumbing way to do it. It's just poor

timing too. You know, Like a lot of folks are just going through a lot right now, and a lot of folks are are looking to refine to bolster their financial position save money every month on their mortgage, and so for them to then get stuck with this additional fee in the midst of all that, it's it's just kind of poor timing, Yeah, for sure, all right, And regardless of when you're looking to refine, like you always want to make sure you shop with a few lenders

to make sure that you're getting the best rate possible. Another way to get the best rate is to make sure that your credit score is in tip top shape and credit scores we've talked about them from time to time on the show. They're shrouded in a little bit of mystery. So remember, the thirty of your score is based on your payment history, So that's why making payments on time or early is crucial to you getting the

best rate, to you having the best credit score. Another thirty percent of that credit score is based on credit utilization, which is a fancy way of saying the amount of credit that you're using compared to what you have available. So for example, if you've got a credit card with the limit of ten thousand dollars, you want to keep your balance low, ideally around two thousand dollars or less. If you do well on both of those factors, chances are your credit score is gonna be rock solid and

you will qualify for the best rates. Yeah, so that's what makes up the bulk of your credit score. The remaining is determined by a few atoms like your credit history. So you know, that's why we want you to keep old accounts open if possible. I feel like we actually recently answer that question on a on a recent Ask htm episode, So you know, don't close those credit cards from college if you can, and afford to keep this

around in your credit mix. That's another factor. So it actually helps some if you have installment loans like student loans, as well as revolving credit like credit cards. And then finally, what's last year is new credit accounts, So don't open a new credit card if you're looking to refi or apply for a mortgage anytime soon, if you're wanting to

get the best rate. All right, Matt, We've got more to get to, including how the rollout of kind of the newest wave of unemployment benefits, federal unemployment benefits is working for people. We'll get to that right after this break, during which I'm gonna eat a thirty four cent bologny sandwich. All right, Joel, we're back from the break, and you know what, you probably could have actually eaten the blowny sandwich in a minute that I don't have a tummy.

E Yeah, we'll be like there's no substance there, Like that's the thing with bologney. It's just processed meat, just full of just who knows what. I really don't like bologney. I can't believe you're all about it. I wonder if Land was getting the organic malogney too. Yeah, no way to away. So before we talk about the unemployment benefit news, let's talk about cars too. Man. I recently saw that

the average price of a new car is exploding. Dude, you know we just talked about ditching a car earlier this week, Yet many people are buying new and are are spending an average of over thirty five dollars when they make that purchase. New cars aren't necessarily evil, Joel. You even wrote a post on this up on our site about when a new car might make the most

sense for you. But you know, as the average price of a new car skyrockets, uh, the average length of a car loan is also getting longer, and that can really be a recipe for personal finance issues to pop up in your life. You don't want to end up in a situation where you just oh way more money on a vehicle than it's actually worth. Yeah, so we would suggest thinking twice before you start shopping for a new car. Could have used one work just as well

for you. And if you do decide that you really want to bring new car, that's okay to right, but look for more affordable models that aren't going to struct your budget too hard. If you can pay in cash, that's great, But if you do need to take out a loan, we suggest not buying a car that you can't afford to pay off in three years. Thirty six months should be the longest length of a loan that you should be considering. If you choose longer loan than that,

really you just can't afford that car. Or like you said, Joel, you can just stick with cash. Keep you nice and clean. It's ideal, that's for sure. Let's talk a little bit about student loans, dude. Since the executive order a couple of weeks ago, more details have come to light on relief for student loan borrowers. It now seems very likely that the suspension student loan payments and interest accruel is now set to last through till the end of the year.

That's because the Education Secretary has quote unquote broad authority to act on something like this according to the White House. Uh and then plus two, you know, the continued suspension of student loan payments. It seems to have bipartisan support, so it's not likely to be challenged. There's a good chance that this is actually gonna happen. I'm trying to think of something that I have broad authority in life.

I can't think of anything right now. Your own life, your ability to eat leftovers, to not throw food away in the trash. That's a good point, all right. Uh So yeah, keep in mind that this expected relief is not available to those with private student loans, and this is specifically for borrowers who have federal student loans, which make up about loans out there, so that's good to know. And if you have a stafford, a grad plus, a parent plus and consolidation loans, all those loans, so we're

talking to you. And this relief should be automatic too, just like it was in the first round under the Cares Act, So you shouldn't have to do anything in order to not have to pay on your student loan through the end of the year while also not accruing an interest, which is great. We'll keep you posted those more details come together from the Education Department. Sometimes they can be a little slow moving, uh, just like they

were in the implementation of the Cares Act. But this is good news for student loan borrowers and it's just more of a chance for people to get to save what they would have had to pay on these loans. But at the same time, there's there's just no downside because interest isn't accruing right now. Yeah, and not only are folks saving money too, but a lot of individuals

are just really getting after their debts. Right. Uh. You know, this postponed your student loan payments, but it doesn't cancel it, like you still have to owe money, like you still are going to owe those student loans, and so the ability to kind of really go after it when there's no interest being accrued is fantastic. It also buys you

a little more time as well. It's to even just kind of go after some of the higher rate interest debt that you might have, right Like I'm thinking of just higher interest rate credit cards that you might have sitting around. Go after those instead, because this is a great time to knock out some of that debt. If

you're in a solid spot with your personal finances. Yeah, if your income has remained steady and yet you've got these student loans that you don't want to pay on right now, but you have other depths in your life that have higher interest rates, tackle those now. That's a that's a good way to go, all right. Another aspect of the executive orders that were issued almost two weeks ago.

It was an extension of unemployment benefits, and it was originally announced as like this boost of four dollars a week, but in reality, it looks like it's going to be more like three a week. As states, we're basically being asked to put the remaining Hunter bucks, but most states just can't afford that right now. And either way, this is a massive decrease, right it's a having of the extra six hundred bucks that a lot of folks were seeing with the Cares Act, but his Congress was essentially

unable to come to any sort of a compromise. It's certainly better than just a complete removal of any sort of federal aid when it comes to additional unemployment altogether. Yeah, at the time of this recording, Jewel, eleven states are now offering the the extra three dollars and so individuals could see those additional funds as early as this week. But FEMA is expecting to be able to pay out that assistance by the end of the month on average,

but it could take longer. And that's because if you're listening closely, you heard me say FEMA which is the Federal Emergency Management Agency and they normally respond to like natural disasters and stuff. They've been tasked with administering this relief, and officials are are having to roll out a new

system to work with the existing unemployment system. Uh, it might not be the smoothest rollout, and so you know, there might be a chance of delays, even though we are seeing more states kind of get approved and get logged onto the system, so to speak, pretty quickly. Yeah, so I'll have to say, really like, don't bank on

receiving that extra unemployment relief in a timely manner. Man, I still know people that are waiting on thousands upon thousands of dollars in unemployment relief from the Cares Act that they haven't been able to get. Some people waiting on almost twenty dollars of money from crazy government. Yeah, it's not cool. And so yeah, on that note, if you followed kind of how things went the first time and how things are still going with those additional unemployment benefits,

you'll know what we're talking about. It didn't go well. A lot of people were left in the lurch, and there are still hopes that Congress will come together and will pass a bill that will provide a little more long lasting additional unemployment assistance. We hope to see that, and we'll definitely talk about it on the show if it happens. But now more than ever, it's just this great time to fire up aside hustle, start sending emails and making calls to people in your network in order

to look for a new job. Right, I think it's time for a lot of people to look for longer term solutions to employment, even as many industries have been hit hard and individuals have been laid off. Right At this past Monday, Matt, we we had an interview with Josh Breed sing of Minority Mindset, and we talked about entrepreneurship. Give it a listen if you haven't, because I think

it was insport raatel. Joss Breed had this conventional path essentially laid before him, and he decided to go in a completely different route and he basically started things from scratch and built businesses out of nothing. And is that this sort of thing that's easy? No, But is it this sort of thing that's replicable? Yes? I think so. So Yeah. I thought that was a really fun conversation with him. And man I gleaned a lot of stuff from that chat. Yeah, and all the note of work.

You know, the job market is changing right now in a pretty meaningful way. Like working from home. It's no longer a trend, but it's becoming more and more a long term reality for us, and many businesses are prioritizing full time jobs less and they're focusing on more contract work is to begin to list jobs and hire for needs.

Much of this is due to economic uncertainty, so it's great to see that hiring is up and job listenings are increasing, but you know, contract where doesn't necessarily provide some of the important benefits that many workers are looking for. Yeah, benefits healthcare in particular have of course become just like

this incredibly meaningful thing that goes along with employment. But with the economy changing, and you know, we've already seen this kind of trend towards gig work, and we're seeing contract work become more and more common, many people who are getting a new job might not have the benefits that they had before. So even while many are thrilled to be getting some work after potentially being laid off earlier this year, there's still other difficulties associated with that.

So it's important to note that that is going to be a lot of what you'll see if you are job hunting right now, and if you do take a job offer in the coming weeks or months, it's okay to keep looking and applying elsewhere, you know, when you do accept some contract work, so you can look for the job that is eventually going to be an even much better fit for you and your family, in particular giving you some of those benefits that that are just

so important and helpful. And one final note, one final story winted to mention man is that the SMP five hits a record high this week. It is crazy to think about what has happened in the stock market, uh these past six months, and it's important to note that when the market hits an all time high, it kind of it brings out a lot of nasairs, you know, who believe that this can't continue. You know, well the mark it go up at this rate forever, like, no way,

that's not gonna happen. But you know, does this week's news ensure that you know, we're going to see a big decline and stock valuations in the immediate future. That's also gonna be a no. Uh. That's why we invest consistently and for the long term, because you know, who knows what the market will do in the near term. It's good to see optimism from investors, but you know, don't allow that news to change how it is that you invest. Just keep up and continue that slow and

steady investing approach. Yeah. I think it's easy to get sucked into headlines right now, especially as you see record high headlines, and everybody's got a response to something like that, right, They've got their take on what's gonna happen next, and those takes are typically all across the board, and it's easy to buy into one or the other. I gotta say, I have no idea you know where the stock market

is going from here, and neither to those people. And so yeah, the best thing we can do is stay the course, continue doing what we're doing dollar cost averaging, investing on the RAG every single week or every single month, like you've been doing to build wealth for the long haul. That's how you do it, not by reading the headlines and responding to those all right, Matt, that's gonna do it.

For this episode. For listeners that want to check out the show notes for this episode, including a link to that brown bag lunch survey. We'll have the show notes up on our website at how to money dot com. And maybe this weekend you're gonna be hanging out with some friends or maybe you know you've got some pandemic pals, like some families or individuals who you've kind of quarantined with. We would appreciate if you haven't already told them about

our show, that you would mention how the money. You know, we appreciate all of our listeners, and we're always looking for ways to to get what it is we're talking about personal finances in front of new folks who need that financial encouragement. So thank you in advance, Joel. That's gonna be it, buddy, until next time, Best Friends Out, Best Friends Out,