Welcome to Head of Money. I'm Joel, I am Matt. Today we're talking about longer loans, pre paying principle, and higher heating bills. That's right, buddy. This is our Friday Flight, the weekly round up, our weekly roundup of the news and how it pertains to your personal finances, so that you don't have to spend all of your life combing through the headlines and the articles to find the ones that are going to impact your bank account.
I pick the most important stuff, share it with you and stuff, and we offer our hot takes.
It's kind of what we do. Honestly, you want to kick things off. Speaking of hot takes. With the Federal Trade Commission, we might disagree.
On this because I know you know we're going to disagree. You disaground this, but I think this is potentially a really good thing. The FTC just announced this week that they're going to do a click to a click to cancel rule. And basically what the FDC wants is for companies to not be allowed to if they make it really easy to sign up on their website or via
their app. Hey guess what they need to make it just as easy to cancel, and I think it was earlier this year met the cable companies testified in front of the FTC and they basically said, listen, if we make it easy to cancel, then people are actually going to cancel our service, and we don't want that. And the FTC was like, that's the point, so that people
can cancel if they want to. And I think the cable companies actually retain a massive number of people who try to cancel because they call to cancel, they're forced to call, they can't they can't use, you know, go to the internet website of the provider and cancel, and because of that, they end up talking them in or they offer him a deal or something like that. It's just this rig and role that I think consumers are
tired of in many ways. I just tried to cancel something the other day, a streaming service, and it was like hard to find the grade out cancel button at the bottom.
And there's like six steps that you have to go through. When it's like the same color as the background, right, it's literally impossible unless I select all and then I see it highlight right.
It's like trying to find the unsubscribed button on the bottom of an email sometimes it's like finding ale in a haysack. But so I kind of like this, it's not set in stone yet. There's like six months I think before this becomes official. You just had actually trouble canceling a gym membership, and.
So we're not gonna talk about that though.
But actually that's one of the things is gym's make it really hard to cancel. People end up sticking around pay an extra, whereas if they made it easier to cancel, I think people would be They wouldn't find themselves paying for stuff that they're not getting or that they don't want.
Yeah, I am of two minds with it, because I certainly understand. I see the appeal right the ability to cancel the same way that you subscribed. It makes it's common sense. But at the same time, I just don't
like how we've arrived at that point. Like I like the result and what the end result might be, but instead of the government getting involved, obviously, I would rather see the free and open market decide and the ability for us as consumers to vote with our dollars or leave a review, a negative review, cant or with our dollars because they're making it so hard for us to
leave because your dollars are all tied up. Yeah, but just the ability to tell your friends about it, I think is it's just a simpler, more straightforward way of achieving the same ends as opposed to what I see being the more complex, expensive way to achieve this sense by having a government agency potentially enforce this, because what does that actually look like, the government to step in and say, hey, they'll do business like this, Like, that's the part of it that that turns me off, and
I would rather see consumers be able to vote with your dollars. Yeah. But either way though, I mean, we'll see. And obviously if it goes through, and it's a part of how businesses are forced to implement some of these changes, I'm all for it because it's like, okay, well if that's if that's the rule, then we abide by the rule and we all get to benefit. In this case
as a consumer, Yeah, I'll be thankful for it. And I think, yeah, if you want to cancel your service, it should be you shouldn't have to go to an AI bought and chat and and jump through a bunch of hoops. When it was they made it super simple to sign up. That to me feels kind of like a bait and switch, and I think it's a dirty practice. Yeah, I just think there are better ways for businesses to run their businesses. This makes me think of a kind of a random story that we came across this week,
Home Depot. What they're doing now. They're having their corporate folks, their corporate employees, and the CEO is the one who implemented this. But they have to go to an actual home Depot store to work once a quarter. And the goal here is for the people who might be a bit more detached from the end product and for the services that they're providing to be more connected to you know, what the boots on the ground are actually encountering. And I think this can only be good for morale and
for business. This is a smart business move, Yes, And this is like the perfect example I think of how instead of this being some like mandated from on high, from like a government agency, here is an individual company deciding, you know what we need to get. We need to be more in touch with how it is that our consumers are seeing the end product, and that is going to allow us to innovate. It's going to allow us
to make changes. We're going to be able to see that, like, oh, we don't like it when we make whatever it is is at a home Depot story right, And like, well, I hate it that we make customers stand over here when they're making returns. Why can't we do this? And like there are these small little tweaks along the way that you can implement.
And I think in big companies it's really easy for the people at the top to get out of become out of touch with what's happening at maybe the individual retail locations. And like Sam Walton was famous for visiting like all the Walmarts and even visiting his competitors and stuff like that too, to get a sense for what's happening on the ground level. And I think many CEOs
don't do that. So the fact that Home Depot is doing it feels like kind of like that the show Undercover Boss now, where the CEO would dress up and work like a day in the minds or something like that with the normies that worked for the company. And I think that's a good thing. All the pleabs, I think that's a great thing. Like Home Depot will probably benefit from this as a post.
And so what we'll see is a business like home deepot continue to innovate and do well. Their stocks will continue to go up, customer service is going to remain high. And then if you see other companies that aren't innovating, like I think us all that Kmart is, they've got like one more store or something that's going to end up closing. Amazing. That's an example of a store that that didn't do that didn't keep up with the times exactly.
And so it's up to the I think it can serve their customer well, were on a company company to company level as opposed to it being something that needs to be mandated from on high.
Yeah, let's talk about something else, Matt. Let's talk about car Loans. We don't like them.
I hate them.
We've never liked them. We talked smack about them regularly on the show. And it's it's one of those things where it has been a problem in the past, and it's this problem is getting worse because as car prices have risen, interest rates have also gone up, and so car affordability has one of the been one of the biggest categories, the hardest hit categories by inflation. So yeah, eggs.
It stinks that those costs more, but the car probably impacts your budget far more than just the eggs, and it's it's just not a fun situation right to be in if you're looking to upgrade your vehicle, because you're staring at the price tag the bottom line and you're freaking out. You're not used to paying this much for a car, especially if it's been five, six, seven years since you've had buy one.
Hopefully even longer.
Hopefully even longer. While you drive your car, you don't have to put up with this problem. But new numbers from Edmunds find that people aren't necessarily trading down to a cheaper automobile or saving up longer. What they're doing is they're increasing the payoff timeline so that they can snag the car they want. This is really bad.
News in our estimation see here in this.
Eighty four month car loans now account for almost one in five of the overall loans that were issued in just this past quarter. That has doubled in just the past few years, and then so the average car loan length is now sixty eight months Matt, so people are a lot more people opting for the eighty four, but the average is sixty eight. That's more than five and a half years to pay off the car that you're buying. Outrageously bad news, and it could come with serious financial
consequences for people down the line. On top of that, nearly one in four consumers owe more on their car loan than the vehicle is worth, so they're upside down in their ride. Something like twenty twenty five, twenty six, twenty seven percent of people upside down on their vehicles. The national average for upside down balances is sixty four one hundred dollars. So talk about being in financial trouble
when you own more than the car is worth. If you're in an act terrible or if you feel like you need to trade your car up, sorry, you still owe a bunch of money on it. That gets people into even worse car loans when they trade it in and they get another car on top of.
That, then it perpetuates. It creates a six cycle, and we want people to avoid car loans all together. We want you to keep your current car on the road. Maintaining your vehicles highly underrated. Everybody wants to hit the easy button, and what easy means is expensive signing up for a new loan to where they don't have to like take the car into the shop. Like literally this morning,
I spent like five ten minutes the car. The tire pressure gauge light came on on the dash and I ignored it for a couple of days, and Kate was like, hey, what's that all about. I'm like, okay, I finally get to it. But most people don't like even doing that. But spending some time, even if it's cold outside, to get out there and get the tire pressure backup means those tires are going to last longer. But we need
to do that with all aspects of our car. But then if you eventually do want to get a new vehicle, just keep saving up. If you can be the opposite of the average American on this front, if you can stay disciplined to keep car debt out of your life, you're going to be shocked at how this single choice, just as one choice, can help you to make financial progress in leaps and bounds. Yea, as a friend of the show car dealership Guy, he said this in his
new newsletter. I'll quote this. He wrote, Longer loan terms can make monthly payments easier to manage. Sure, that's why people do it. Yeah, but most Americans aren't looking to hold onto their cars for seven years. The real risk is that these extended loans increase the chance of carrying negative equity into their next purchase if they even keep up with their payments in the first place, which is one hundred percent true. So we don't want you to
put yourself in this position. I think Joel would say, Hey, it's so, if you're going to get a loan, make sure to limit it to you know, forty eight months or maybe or less. Certainly that's much better than the seven year terms car even a smaller loan term. But man, you can get reliable vehicles by saving up cash. I think most Americans who are finding themselves in a position where they're looking at a new vehicle aren't in a highly urgent situation. Uh. And instead it's more of a
lifestyle upgrade. And they're more Americans are financing these lifestyle upgrades. And that's what I hate seeing.
And I think just because it's become normal, just because everybody's doing it. I mean, I don't know if your mom ever said this to you, map, but my mom but always yeah, just because everyone else is doing it. I mean, you're going to do it too. If Matt jumped off a bridge, Joel, would you do it too? And I'd be like, I don't know, maybe if there's water below and it looks kind of fun, it's only
like thirty feet. Sure, I was actually really into that high school you were in a bridge jumping, so maybe I would mom. And maybe I'm actually undermining my own point here, but yeah, if everyone else is.
Doing what I failed to Dijoel was oftentimes check the water, like for down trees, that's that's oh really, Oh yeah, you gotta you gotta do that. If you're gonna do some like cliff jumping, rock jumping at the lake, trestle train trestle jumping, you always need to check the water, makes sense, make sure it's clear of any debris.
And r or else you can have a major accident, right exactly exactly, So I think I think you've gone as straight here from my point.
Matt all sorts of it amount of money, how to save money by not going to the hospital, But I think it's just so normal.
And when we talk about what the average person should spend on their car payment, or if you look at like rules of Thumb, typically it's ten percent of your overall income should or can go to car stuff. I would prefer to be for most folks for that to be far smaller, and that just gives you so much more flexibility in terms of vacation. You want to go on increasing your saving and investment investment rate. So just because everybody around you's doing it, doesn't mean that we
should do it too. And I just see that like this current situation for a significant portion of American consumers, mat it's untenable and it's going to lead to some really horrendous side effects down the road. From a personal finance standpoint, So keeping your car expenses and your car note if you have to take one on to a minimum, and being really thoughtful about, Okay, how long is it
going to take me to pay this off? And then how can I continue to bank that money so that I don't ever have to have a car loan in the future.
That's the goal seven year car loans here that daysh Let's go ahead and talk about artificial intelligence, Joel, I personally don't exactly know. I guess what to think about AI, how it will impact our future. Are we all going to live in the Matrix someday? I actually don't think so, but some folks have if we lived in the Matrix and had to watch that movie on repeat. Interesting, I
haven't thought about that. It's feeling a little too meta. Yeah, do our younger listeners even though what the matrix is. I'm sure they've heard of it. But if you haven't seen it, they have, Like the newer Matrix come out a few years ago, right, revolution, Yeah, revolutions, I think the only go to fifty year old people. The first one still holds up by the way. I think they're all decent. But at the time it was like mind
bending in a way that our minds hadn't been. But I enjoyed reading an MIT professor who recently wrote that he believes that AI can only do basically five percent of all jobs right now. Basically, you're saying it could help some folks and replace others, but that is not going to like foment and economic revolution that's going to render all humans obsolete. And I'll say I'm actually I hope he's right, because there have been some recent stories
about Google's new AI generated podcasts. Have you heard some of those, Joel, It's uncanny what they're able to do. I'm a little I was quaking in my Adidas when I read them. Matt look consered. Actually, are you actually worried about that?
Is that I'm not because I just think I think the biggest thing that AI can't do is personality generated.
So like I can't make it fun, right, I mean, they might think they can make it fun, but it's going to be this sort of sterile version of fun as opposed to like the real stuff that we're experiencing in our day to day lives. Think about this.
Think about how cheap it's gotten to listen to the music you want to listen to, whatever album, whatever song, whatever artist you want to listen to, deep cuts, no matter. You can listen to it for for for your cheap. But think about how much money people pay to go see a concert in person. It's insane. The yeah, the price tag for concerts for big artists and stuff like that has gone through the roof. And I think people
more than ever want authenticity. They want real life, they want real people, they want experiences, and I think I don't know, hopefully hopefully listening to Matt Joel is in experience of sorts that people will want to listen to even though they are going to be AI podcasts out there.
They want a little rougher around the edges, and that's what we're able to provide. That's right.
They want the stumbles, they want the bumbles, they want a few ums on occasion.
I think, so whatever other idiocy we might come up with it.
Yeah, but I think that's a really smart prediction. I think that's probably true, Matt. Five percent of jobs interrupted significantly by AI. That makes sense to me. I think some of the massive doomsayers on AI, I don't know. I just I don't see that future to take them seriously. Yeah, one industry we'd love to see disrupted by AI is real estate. And that's because real estate commissions make it so much more expensive. You're buying sell homes, Kirkma, the realtors with the pitchforks.
Yeah, they're like, oh, you're justifying your profession, but you're coming after hours, sorry, guys, shirks.
And that's not because we hate real estate agents and we think that and I don't think that that AI is going to reduce the need for good realtors, but I think it will maybe grease the kids and potentially bring commission back into a reasonable range total. And there's this new company that's basically trying to bring those costs down. It's billing itself as AI for home buying. It's called
fly Homes. So I was reading an article about this, Matt and basically, this company believes that over time, AI is going to help answer most of the questions that you have about a home that you want to buy. So, hey, not only did you find it on Zilo, you got some basic information. Now you go to fly homes and you're like, hey, has this cross space ever been flooded?
Or there's other questions you can ask. And this AI is going to learn about like apparently all the homes in the country, and it's going to be able to give you more informations and then I'll help you even write an offer. It might even help you negotiate. What happens if two ais are negotiating against each other, I have no idea. Both of those systems just completely break down, and it's like the seventies game or seventies movie wargames. You remember that, no, I.
Don't involve the computer. Ok yeah, I'm playing against itself running different scenarios. Okay, yeah, I mean maybe it ends up being like that. I don't know if fly homes like how if this is ready for primetime, or if in a few years, as they continue to make progress,
will this actually be able to help consumers. I don't see artificial intelligence replacing agents now, but I do see it becoming maybe an accessory and helping to bring down costs for consumers, just maybe a helpful tool for agents to maximize their time, a way to reduce the transaction costs, because yeah, they're prohibitive in so many ways, and I do think they prevent the housing market from being as
fluid as it could be. The pricing model, like the way the pricing structure works or has worked in the past when it comes to realtors. That's I think that's the biggest thing that's going to get disrupted. And as I think about it, the biggest the best parallel that I can think of are financial advisors. And in the past, typically the structure for payment is assets under management, and so if you've got clients and they're worth tons of money, dude, you are rolling in it. Yeah, But now the way
it works. Oftentimes it's a flat fee, so you get the services, and maybe it's not yeah, okay, maybe they're not taking you out to lunch, maybe you're not going golfing with them, and because you're a you're not a big high roller or anything like that. But you are being provided the services that they're able to provide all of
their clients, regardless of how much money they make. And in a similar way, I think the same might be true when it comes to realtors, Like, why just because you are selling a house that's eight hundred thousand dollars as opposed to four hundred thousand dollars, does that mean you should be making twice as much when maybe you did it twice the work. I don't think so, and so in that way, and again and all the realtors are going to come after us.
They they don't like the three percent rule being threatened because it and again, of.
Course it hurts their bottom line.
But when you look at the numbers, there's a ton of real estate agents who don't make much money, and that's because typically they're doing it super part time.
O their license and they only help out their friends.
Right, there's a lot of agents out there, though, the agents who make a lot of sales or help a lot of people through it the year, they do quite well for themselves, and I'm not worried about those people not being able to continue doing well for themselves.
I'm just a full timers are going to be fine.
I just think that there's probably a more fair way to compensate, and for some agents it might even end up meaning that they make more. Matt, We've got more to get to on this episode. We're actually going to talk about real estate prices going down in some parts of the country. We'll get to that and more right after this.
All right, buddy, we are back from the break, and of course now we've got our ludicrous headline of the week, which this week is from Wired magazine. I used to actually be a subscriber to the physical Wired magazine back in the day. I was into the text.
I saw that the Atlantic just increased the number of physical magazines are sending out to give a year from ten to twelve. I was like, our magazine's back.
And I think this goes to like people want physical stuff. Yeah they are, they are, well the onion. I think it was like a decade ago stopped actually creating something that you could hold. Yeah, but then they I think they're realizing this is something similar. I'm all about it because I'm actually I like this trend.
There are a couple of magazines like I don't think I subscribed to any magazines right now, physical magazines, and part of me wants to go subscribe to a couple just because there's something about getting into the mail holding in your hands.
It's special and the design choices that go into like the just the paper weight, like all the old school journalism magazine folks are like, yeah, yeah, bring them back. But again, this headline is from Wired, and the headline reads, the more this releix costs, the more you want it. We're gonna knock on luxury a little bit. This is why we don't buy fancy stuff, Joel. I try not to care about luxury goods, and in part it's because the finest luxury good makers out there, they typically raise
prices much faster than the rate of inflation. Yet it only makes their products. So for instance, Swiss watches fancy handmade bags, it makes them more desirable, which sounds.
Like the opposite should be true, right If this is how luxury works, though, Josaster in the rate of inflation, then what like, why do I want it more?
It's the forbidden fruit. That's why we buy these goods in a desire to signify social status. And we'll keep buying these goods that are widely considered exclusive because of what it reveals to the people around us, what it signals as so good. Old Teddy Roosevelt said, this comparison is the thief of joy. But Joel, it'll also rob
you of your hard earned money. It robs you with the freedom that it could have bought you instead when we focus on buying not only stuff, but luxury goods that have very little intrinsic value.
And I think for some people, Matt, it's okay to desire some things that are upper echelon or that are nicer. And if you have the money to spend on those things, and you've budgeted appropriately and you're doing all the other smart stuff with your money and Rolexes or your craft beer equivalent or something, that's fine, Like I've got no beef with you on that. But I think sometimes people buy the things they can't afford in an attempt to signal and they're not doing the other things, and they
put themselves into financial buying because of it. So you got to watch out for that. And the other side of the coin to Matt is, I'm curious to hear your thoughts on this. I hear that like, Rolexes continue to go up in value, so it's an investment, Joel. I guess in some ways it could be right. So maybe you don't trick yourself into thinking of it that way.
But when you see like some of those vintage Rolexes, or there's some kind to rolexes that continue to go up in value if you take care of it year after year, maybe that's one reason to at least not be as down on luxury goods as it might otherwise be. Sure doesn't mean I'm buying one.
That's how you can justify it. No, I'm not interested personally. I am more of a speedmaster, an Omega speedmaster guy. Yeah, less of a Rolex fan. How much does this cost? Just as much? I think? Oh really? Oh yeah, especially one? No. No, I just have looked at him from afar and I don't think I will ever be able to allow myself to actually do it because of all the things I just said, like, I'm trying to try and buy you
one for your birthday. Dude, if you did that, that would be stupid, But I would totally wear it, Like do I put it next to my garment watch or yeah, like what do I do at that point? One on each rest? No. I mean we've I think we shared the story about how Kate and I were on a date and there was a watch club meeting at one of our favorite local spots, and man, the ability to get my I was like, what are you guys doing? And I see all these watches and they're they're collectors. Yeah.
It was also encouraging to hear that you can kind of get into it without dropping ridiculous amounts of money on some of the the you know, the Omegas or the Rolexes. There's a lot of other sort of like medium tier brands as well. If that's something that you're into, I feel like, I'm man, if you've got the money, if you are in if gosh that I can't believe. I so easily, like jiu jitsued myself into like trying to say that this is okay to get I was
gonna add this. You just we talked about physical magazines for just a second. I think physical like analog goods. Also, because we live in such a digital world, something like a handmade watch, analog watch. There's something cool about that in an age where everything's on a screen, way cooler than like an Apple watch. So maybe buy a really expensive rolex everyone, Oh my god, it's just kidding. Yeah.
Uh, something else that's skyrocketing and price a lottery tickets. Those are going to cost more starting in April. So instead of two bucks for your mega million's ticket, it's not gonna cost five dollars five spot.
I feel steep feels a lot, yeah, a lot more expensive two dollars. It's just like, oh, you got a couple ones laying around, Well, I was gonna end up losing those anyway, right, right, But now you're.
Like, you'll lose file five dollars five And of course there's gonna be more winners, there's gonna be bigger prizes. Still, your odds of winning are truly going to be abysmal. And your once a week habit, which is akin to tossing money in the garbage, which might have been cute at two dollars, now at five bucks. I think it
deserves more serious line of questioning. Twenty bucks a month matt for the average person, I get, I think, and I think the average lottery player spends a whole lot more than that already, and if the price goes up, you know they might be dropping like one hundred dollars or more a month. That can especially when you think about the compounding realities of that money going to work for you in retirement accounts. That money could do a
whole lot on your behalf. And I don't know, maybe all of us in the how of money community, maybe we can simultaneously commit to avoiding lottery tickets and luxury goods at the same time.
What if, yeah, what if lottery tickets are somebody's craft beer equivalent. Oh, I don't know. I don't know if you can justify that as I think you can anything, right Like, That's why it's so hard for us to knock on stuff, which is part of it.
Why but most people do it out of habit, or they do it out of hope, and they're doing it because they're I don't know, they think that, yeah, they need the big time payout. They can't they can't be patient and wait for thirty or forty years to build that wealth. But that's really the tried and true way to do it.
And that's a muscle worth developing. Yeah, I hate that. It's more of a reflexive action for a lot of folks, and that's when folks are mindlessly sort of losing their money. There's a big difference between that and like, I don't know, twice a year being like, hey, every year I take my tax return and I use two dollars of that to buy a lot of ticket. Like I don't know if it's like a tradition or or maybe like well we always stick one lottery ticket in Christmas stocking or
something like that. There's a big difference between that and like reflexively going every week on you know, Friday afternoon exactly that kind of thing. So, speaking of prices, Joel, so was it last week we talked about tattoos how much they cost? Like I joked about getting an experience tattoo on that experience New York Times. I think they heard us talking about that. They just had an article about how expensive tattoos have gotten. The global tattoo market
is two point two billion dollars. I had no idea that it was that big of an industry and more America are paying big money to make their body a living work of art, and I can appreciate that. I can I understand folks who are into that. My wife wants to get attended. Does she really does what she want to get? Does she know like a wave somewhere? Yeah? Oh? Be the way? Is there like a counseling thing? A question I need? I need to take it a little bit. Didn't ask her why she thought it looked cool. I
thought she's like the beach. Yeah, but she's not like obsessed with the beach. If you're obsessed with the beach, that's when you get like, yeah, I don't Yeah, maybe it's like a go with the flow. Oh okay, yeah. I can't believe you haven't asked her why she was away. I didn't ask her. Now now I feel dumb. What if you're like, I want to get a tattoo and you're like, I want to get a sunflower on my forearm when you let her to ask you? Why? Be Based on that Postmalon song, Yeah, it's a good song.
I think it's just worth putting this out there because that you know, We've all seen friends get tattoos that to them represented something meaningful at that point in time, but then they end up loathing the ink that you know they adored just a few years earlier. Big money on the because then you've got, you know, not just the cost involved with getting a tattoo, that's one thing, a couple hundred per hour, but then the time the cost to remove the tattoo that is also worth considering
as well. You got to think about if you don't end up loving that tattoo and the tattoo removal part of the industry that's actually one third of the tattoo market these days. I have a buddy who's so fascinated, who is obsessed with Lord of the Rings, and he's covering up some of his old tattoos because he, I guess doesn't like them or doesn't feel like they represent him in the same way anymore. So he's getting these massive Thord of the Rings scenes over the top of
those old tattoos. And I think that's something else people do. They either got him removed giant Gollum on those ye is it? Is it?
Pete Davidson from Saturday Night Live that like has gotten has spent a ton of money getting tattoos removed they got earlier on in life. So this is one of the things with me. We're like, think long and hard. I guess before you get the body art. Tattoos can be super cool and I just have never.
Had tattoos more expensive than you think.
Well, I just think, I like, I've never been able to find something that I'm like, I'm almost positive I'm gonna love that for the rest of my life. Can't wait when I'm eighty two to look down at that thing. Yeah, that wrinkled tattoo, that's that's at enjoy it.
Like. There are very few things in my life where that I feel that resolute and where I trust myself to be that steadfast like years and years. Like family is one, and so you know, I could see myself.
That was the one thing I thought about getting really some sort of like Shuonish version of my family, like tattooed on caricature of your whole fa one of my favorite artists representation of my family. But I just haven't. I just haven't been able to make that plunge get you a black cat tips, That's what I was taking. Version of everyone yes, exactly.
That could be cool.
It could be, but I still probably won't do it. So yeah, get body art if you're into it, but just make sure you actually are sure you want it, because it can be expensive to put on and to take off. Now, let's talk about real estate for a second. As prices go up, at some point, consumer stop buying, right, I think, go on buyer strike. They say it's it's too much. I'm backing out of the market. And we
know this too. What goes up at an unsustainable pace must eventually chill out and come back down to earth, and that is what's happening in certain parts of the real estate market. Florida, for instance, was red hot for years more than the rest of the country, but the Florida market seems to be calming down quite a bit. I think this is partly thanks to recent violent storms, rising home insurance costs, and price fatigue, but I think price fatigue started before some of this other stuff too.
Those factors have all combined to just reduced interest in Florida real estate in general. And so this is bad news, I guess if you own a home in Florida. But it's good news for want to be home buyers. And I think this is extending past just Florida specifically too. I mean, we went through a stretch of rapidly increasing prices, multiple offers on every home home sales going for one hundred thousand dollars more than what the asking price was,
and then asking prices jumping conventionally too. But just like prices in many other parts of the economy, the housing market is more normalizing. So it just feels like we're living in a more normal American economy right now than we were a couple of years ago.
And that's just a nice change, that's true. Yeah, so if you already own a home and recently purchased it, you might love the home, but not the rate. That was actually a term that was gaining popularity. Was it last year a couple of years ago. Marry the home, date the rate. Yeah, we crapped on that a lot.
Yeah, we hate on realtors a lot, don't we, Joel, Well, no, no, we talked. That was about that was about refinancing, and they were saying, oh, listen, buy the home and guess what you don't like the rate, you can refinance like six months down the road.
That was like, yeah, and look where ray. Traditionally that was a realtor rallying cry to be like, no, you can still buy the home, like this is only temporary. Yeah, but and look at rates. Yeah, they're still not doing great. They did. Friend of the Show, Michelle Singletary. She wrote in an article in The Washington Post about how you actually don't have to refinance to reduce what you pay an interest. She didn't suggest refinancing, because again, rates haven't
dropped enough to make that a smart idea for almost anyone. Instead, she was pointed to paying extra towards your principal balance. So this is a classic suggestion, And yes, it it's going to reduce the overall amount of interest that you're going to pay over the life of the loan because specifically of the fact that you're going to reduce your payoff timeline. But that doesn't mean that you should start
funneling more money towards your mortgage. If let's say you are investing, let's say you're saving like a baller, Yeah, maybe that's something you can consider, But we don't think that you should prioritize a mortgage payoff if it means not achieving the other goals. In your life and the biggest So again, by paying towards your principal balance, yes, you are going to eliminate that mortgage like seven years sooner. Right, This is the two Like, what is that if you
pay twice two extra payments every single year. I think it's something like you're taking it from a thirty year mortgage down to a twenty three your mortgage bi weekly, that's what you're doing. Yeah, extra payment a year exactly, that's right. But guess what, you're not realizing that benefit
until the twenty years down the line. And so if you're thinking that this is some way that you're going to be able to reduce what it is that you're paying every single month towards your mortgage, No, you're not reducing your monthly cash flow that's going that's leaving your bank account. This is this is a forced method of savings. And to actually realize a reduced payment at some point, what you would have to do is, yes, either refinance,
hoping that rates are going to come down. But the problem here though, refinancing is pretty expensive, and so the other alternative is to see if you can get your mortgage recast, which is where the lender reamateurizes your payment schedule based on the principal balance that is remaining. But that guess what, that also costs money too, so that
there's no like sort of cost less than refining. It costs less, but there's no free lunch here, And so instead, we would much rather see folks avoid adopting the mindset of oh, I hate debt, and instead, if hey, if you want to save a bunch, sock that money into your savings account, find different ways of investing that money. But paying your mortgage early is typically not something that we can that we like to get behind.
You should hate most debt, but mortgage debt is the exception to the rule. I think that like most debt that people call in and ask us about matt, we're like,
get rid of it as soon as possible. Mortgage debt, though, is one of those that we say, oh, actually, there's a bunch of other things you could do with this, And in fact, there's certain benefits to having extra liquid cash on hand right That gives you a lot more freedom, more flexibility, and so we'd likely rather see you invest those dollars, especially if you're earlier on your financial journey, do that instead of prioritizing that mortgage payoff. So we
love Michelle Singletary, just don't. And for some people this might be the best move, but it's certainly not for everybody. So I think if we're blanket telling everyone get rid of your house debt as quickly as possible, you might be missing out on other ways to grow your net worth instead of just trying to pay down a debt that's not actually one of the worst debts you have. All right, should you increase your utility budget in preparation
for higher winter heating prices. It's starting to get cold, Matt. We've turned on the heat for the first time recently.
I love it. Yeah, I love turn on the heat drives out there. Well, actually it's not the heat that dries out there. It's just lower temperatures carry less humidity. And if I talked too much about humidity in the air recently, maybe this you could have been a weather man and in another life. I find it fascinating.
Yeah, that's all, and so much of like whether or not you're going to encounter higher heating prices this winter, it depends on where you live, and it depends on where you're getting your information. So CNN basically said, had an article saying higher electricity bills are coming this winter, and it sounded really scary, But then you read the fine print and you're like, it seems like they're not going up. They're going up at a slower rate than
the rate of inflation, for sure. And then the Wall Street Journal had an article detailing the abundance of natural gas, which is going to lead to lower utility costs for a big chunk of folks in the states that use natural gas for heating MAP. I don't know about you, but my price per therm plummeted when I recently shopped around.
And so you live, if you live in a state with deregulated natural gas, I forget how many there are, but shopping around could save you a bundle if you just keep paying what you're paying, if you're on the if you're not in some sort of locked in rate, Yeah, did you get to pay more? Did you get to the end of your two year lock basically yeah?
And so then I love locking in another another chunk of time at an even lower rates.
So much cheaper, so much cheaper this time around. So if use heating oil, it's gonna cost you a bit more this winter, but still not a whole lot more than last year according to the estimates that we've seen. But ultimately how much you spend depends less on rising prices at least in this current environment, and more on a combination of the weather. Because if it's super duper cold where you live, like you're gonna need to use
more energy to heat your home. And then where you set thermostat, Matt, I think something people don't think about a whole lot and might sound cheap to some folks, sounds cheap to my kids, I think lots of times. But the lower you set that thermostat, hopefully without you know, make your fingers and your extremities go numb. But that's gonna that's gonna help you save a bundle on heating too.
Just put some clothes on and we practice turn it down a few degrees when you leave the house to go to work too. We practice what we preach. We're sitting here, you are wearing a cozy hoodie. I am wearing a little Patagoia puff puffer jacket, and that's what's keeping our heat pump from having to blast, which costs us money. Right, But that's gonna be it for the US Friday flight. We hope everyone has a fantastic weekend.
We will link to the different stories that we mentioned during this episode up in our show notes at howdomoney dot com. So buddy, hope you have a good one. Until next time, best Friends Out, Best Friends Out,