When Debt Makes Sense #141

we have to talk about. Like, not all debt is created equally, right, It's important to distinguish Some debt is is good, some debt is worth taking on. Other debt is awful and you shouldn't even consider it. So, yeah, we're gonna kind of parse those specifics in this episode, Matt, before we get to that. There's a specific debt I wanted to talk to you about, all right, So we just had our boys right not too long ago. Regular listeners to the show will know that we are our

our dad's We are proud parents. You've got three girls and and now boy. And I've got two girls and now a boy. And our boys were born born two days apart. But the hospital bills are starting to come in and so I wanted to talk about how you handle hospital bills when you get him in the mail, and I think it's important. I don't know if you've noticed this, Bunny, we're handling things differently. You're kind of

more of a cash payer. And I have insurance through my job, and there is a humble brag I've got actual insurance. Not at all. I promised, I promised. But but you're you're on meta share. You've documented that as well, which is an awesome thing for people to consider and if they want to save money on health insurance, even though it's not technically health insurance. But but yeah, I'm starting to get the mail from from the hospital with

the bills inside. And I will say one thing I've noticed through the years of receiving medical bills based on different you know, things we've had based on three person now at this point, is to never pay the bill the first time you see it. To always wait for that second bill to come in. There are always adjustments made.

In particular with one of these bills from the hospital stay the first bill, it looked like we're gonna have to pay fifty just one of the bills for yeah, and I was like that's what you had insurance dog, right, I know. I was like, that seems crazy, that shouldn't

be the way it is. And and then I just we just waited a month for the next bill to come in, and it was drastically four thousand dollars cheaper, basically, So you just kind of never know what's going to happen and how it's going to get adjusted, and so I kind of wait for things to shake out. So that's like one tip I have for people who are getting medical bills and just don't ever pay the first

one wait for another one to command. I feel that this is maybe one instance in personal finance that it kind of pays a little bit to be a procrastinator. Yeah, but it's true. There's a lot of confusion when it comes to how to navigate the waters of our insurance. And you know, like you found that you've had some

confusion there. I mean with us having meta share, dude, we found it's even more confusing because there are a fewer healthcare providers who are familiar with meta share um And you know, I've written an article on the site, will link to that in the show notes, but essentially meta share it's very similar to insurance, but it's technically not insurance, you know, it's it's not regulated. There are

different requirements that they have. But at the same time, we are also able to save a ton of money. But we have found, though, is that there is some additional work that we have to do in order to make sure things line up the way that they're supposed to, that they're actually submitted to the right place. It's not as familiar to most healthcare providers as like Humana or Blue Cross, Blue Shield right Now or whoever is exactly exactly.

So you mentioned procrastinating and how maybe that's a little bit of a benefit here, But the thing that is not a benefit is to is to hide your head completely in the sand in regards to the bills that are coming in. And that's what some people do. They just don't open them. They chuck them, or or they open them and they look at them and they cry or scream or whatever whatever reaction they have to getting a massive bill that you can't afford. It's time to move, Yeah, exactly,

we we can move to another country. They'll never find us something like that. And so one thing I want to stress too is that a lot of hospitals have something called a patient advocate, and that can be a

great place to turn. Look on your hospital systems website, call the customer service number and ask if they have someone who is a patient advocate, and that patient advocate can walk through potential debt for giveness options or at least for giving a big chunk of the debt or a payment plan that is gonna potentially suit your income and your needs. And there are for these nonprofit hospitals, there are oftentimes lots of ways that you can have a portion or or maybe even all of your medical

debt forgiven. But if you if you put your head in the sand, it's gonna go to collections. You're never going to have this option again if you don't tackle it within the first ninety days, because if you don't turn to the hospital to for help, they're gonna kick

it to collections. And that's when you're in big trouble. Yeah, and when we say procrastinate, definitely don't wait longer than ninety days, right, like, maybe wait thirty days, forty five of days, maybe for the second time that bill shows up, right, But yeah, you definitely don't want to put your head in the sand. And you know you mentioned the patient advocate.

I think that's important as well. For you know, you kind of were teasing about me being a cash payer because a lot of what we are is paying cash because we're at such a high deductible. Yeah, that wasn't a tease. That's just like kind of what it is the reality. But for folks who don't have health insurance, man, make sure you talk to that patient advocate ahead of time.

If you can talk with them in advance of the procedure, they will totally work with you find ways to you know, split those payments up or even cut you that cash deal on the front end. So so yeah, keep that in mind. And that's definitely the you know, complete opposite of sticking your head in the sand. That's you being proactive and making sure you've got things lined up. Healthcare so easy to understand. It's the best now. It truly is terrible. I wish it was it was an easier system.

I wish, For instance, Matt, I was getting a quote on a procedure the other day, Uh, A procedure that means that I will have no more children. I don't know if that's t m I For everyone out there, but this you're getting castrated. Uh some, that's totally similar lesson basi, Yeah exactly. But basically the thing that shocked me was the amount that I have to pay after submitting the claim through insurance is more than what I would pay as a cash payer. So sometimes that's an

interesting dynamic, too involved in the whole process. It frustrates me to a great deal that that's the case. I don't think that's how it should be. That's the case for getting up prescription oftentimes, which is a real pain. And the only way to combat that is to check and see if paying cash with an app, specifically like good r x, which is an awesome app for for shopping prescriptions. You know what, I found so many times that offering to pay cash and not going through my

insurance is better when I'm getting up prescription. Well, it can be the same for medical procedure. And that's why insurance and that whole health insurance game can be a little bit shady. All right, Joel, my unique friend, introduce our beer for this episode. Alright, we're drinking one from our friends, the Yeast Atlanta Brewers, and this one is a check pilsner. So week thanks to our friend John Francis for for tossing this one our way. We're really

excited to have this one on the show. Yeah, thanks John. All right, let's get into the topic at hand. Today. We're talking about when debt makes sense, which is so weird. It doesn't sound like something the guys from How the Money should be talking about, and being debt free sounds nice in theory, but who can actually live a debt free existence. Most of us decided to take on debt at certain points in our lives to achieve goals that

we have. Debt can allow us to accelerate our goals and see them come to fruition far sooner than the otherwise would have. If you really want to own a home or get an advanced degree, well it's really hard to save for either of those in full right beforehand, Yeah, Juel, that's rights and debt, right. Everyone knows what debt is, but I think it's helpful to to look at debts

in the context of time. Specifically, When you do that, you can see that debt is basically the act of exchanging something in the future in order to secure it now. But obviously you're gonna pay a cost there's a price to pay that interest rate associated with your loan. Well, that is literally the price that you have to pay if you're not able to or maybe you're not willing

to save up and pay in cash. And as we'll discuss, you know, the interest rate you can secure that has an impact on the amount of debt that you'll want to consider taking out as well. I don't know why, but everything every time I think about debt, I think about the story of Rumble steel skin and like putting up your firstborn child in exchange for the spending that

straw into gold. Yeah, that's a terrible wager, but that's kind of how debt can be, right, Like, you're usually sacrificing something good in the future, you know, those payments that you'll make over a long period of time for something that you can get right now. Yeah, your baby. It's like the ultimate payday loan. That's the worst payment if that existed. That's totally against the law, right why

it's a fable. So before we launch into the different reasons when debt might make sense for you, well, let's talk quickly, Matt about some of the things we would recommend you avoiding taking debt out on. Yeah, man, let's kick it off with car loans, right, Like you often hear folks mention their car payment. It's so commonplace these days, like you might actually expected that it's normal to have and maybe even a good idea to sign up for a car loan. I'm paying for the reliability and the safety.

Do you hear that? Right? And that seems like a noble mantra maybe to get behind. But don't convince yourself that car debt is okay. Financially speaking, You're almost always going to be in a losing situation when you finance a depreciating asset. Paying more today for something that will be worth less tomorrow is something you want to always try and avoid. Yeah, man, I've broken this rule just once, and that was the Nissan Leaf that I bought and I still owned. And it was because I had a

zero percent loan option when I purchased the vehicle. But I also did have the cash to pay for the car in full, and so really that debt actually seemed like not a big deal because I had enough cash reserve to pay for the car outright. I wasn't financing something that I couldn't actually afford. But really typically, I would say for most people, if you're looking to finance a car, well, the better option is to buy a

cheaper car. And most expensive car I'd ever purchased before I bought my Niece on Leaf was at Niecean Ultima that lasted me seven years. So it's not like you can't find an affordable ride that actually will get the job done for you over a long period of time. It's just that we think we can't, and so we just take the easier path, which it seems easier, but ultimately we're sacrificing a lot in the future by taking

on debt for a nicer car. So debt, even with a fairly low interest rate, it's not a great idea on a rapidly depreciating asset. And if you do take out debt on a car, the rule that we would say you should never break is to never take out a loan longer than four years. Man, so many people Matt get into trouble when they finance a car and they finance it for six or seven years. I mean, the link on a typical car loan has been lengthening

over time. Folks want to get those payments down. Yeah, if they want the payment down, and so they're willing to take out a seven year loan to do it, and then they end up upside down for a long period of time. And if something goes wrong with their car or they decide they want a new one, well they're in a really bad situation when a comes to getting another car. So true, man, another debt we want

you to avoid taking on as any credit card debt. Basically, credit card debt usually stems from poor spending habits, and that's why you often hear credit cards painted in such a terrible light. It's not that the cards themselves are bad, but it's the credit card debt that is so terrible. We talked about this in episode with Brad Barrett. That's where we discussed how credit cards are just a tool that we can gain a ton of benefit from if

we use them properly. Yeah, Brad talked a lot about travel rewards and sign up bonuses, and you know, we've got an article up on our site about some of our favorite credit cards, and yeah, credit cards can be really awesome. They can provide a lot of rewards for people that use them well, for people that sign up for the right cards for their type of spending. But the problem is when you use a credit card and you can't pay it off in full every month, and

that's when it becomes just a truly terrible cycle. The reason that they're so popular is due to how convenient they are to throw expenses on. And if you've got a credit card with a twenty two or twenty four or seven interest rate, well, these cards they become debt vehicles. And it's what's often spent and put on the credit cards that we have a big issue with. Two. It's so spur the moment consumption purchases. Credit cards make it

easy to spend without thinking. But you want to spend with a plan, and if you can't do that well with a credit card, well then you're gonna find yourself in some serious having some serious issues, Enjoel. The worst, absolute worst kind of debt are going to be paid a loans card, title loans, and those are the worst. You're gonna want to avoid these at all costs, as they can have a range of anywhere from four hundred a p r when you kind of attack in all

the different fees, and that's just ridiculous, man. You know, if we thought that the credit cards made it convenient to pay high levels of interest petty loans, title loans. You know, they easily have them beat. And a big reason for that too is that they are you know,

they're there in person. And so like you apply for a credit card and guess what, it takes time for that card to get to you before you can start misbehaving with your money, right, But with like with a paid a loan or a car title loan, like it's right there in person, And so if you are in a pinch, folks are gonna feel tempted to walk through those doors and see what kind of loan that they can get, and in the end they might go with something that is going to really drag them down financially.

Once you open your eyes to see how many paid a loan or title lending places there are around you, it'll start to overwhelm you at how many there actually are. Just driving up a couple of our main throw for your fairs, Matt here in our part of town where we live, I'm amazed at how many paid a loan shops there are. There's one within every square mile, if

not multiples. And there's some towns where there's like three on one street corner that and it just bums me out to see that's a sign of the fact that a lot of people that live in that area are are certainly hitting them up. They're taking advantage. And the commercials that you see for these companies, they make it sound like it's super simple and it's a short term loan.

But the problem is the vicious cycle that people get into, in particular with with these paid a loans, with these the loans and inability to pay it back that quickly, because if you need that quick cash, how in the world are you gonna be able to pay that back in a week or two? And so oftentimes people get stuck in a rut and it's the worst place they can go. That's like the worst kind of debt that you can take on. Yeah, dude, it truly is pretty terrible.

And let's talk as well about consumption because at the core of all these different types of debt that don't make sense for you is the fact that they are all consumption based. They might pad your lifestyle in the short term a little bit, but they drastically hurt your ability to grow your wealth in the long term. You're essentially sticking your future self with today's tab. It's essentially a punishment for your future self, right that it is

only focused on the here and now. If if consumption had like a motto or like a slogan, it would be yellow. Yeah, exactly. You know. Actually, in episode one eight, when we brought j. D Roth on from Get Rich Slowly, he has this article about the stages to financial freedom, and he actually mentioned that that first stage, where you are in debt. He said, it's essentially like you're a slave.

When you don't have any assets whatsoever to speak of, and you're in debt and you owe people money, whether it's owing your girlfriend and your significant other, your your parents, or the credit card company. You've essentially become a slave to the decisions that you've made. And the only way to get out of that is to take action and to get rid of that debt as quickly as possible so that you're not under any sort of enslavement anymore. Yeah, and I agree, Matt. Consumption is at the heart of

that for most people. That's how we typically get into that. We we see something Chinese, we see something that we like, we see something even that we think that we need we buy it, and then it leads to heartache as we're enslaved the payments for it over a long period of time. But the title of this episode is when debt makes sense. And we've covered the really terrible things that debt can do when it does not make sense, Yeah,

when it invades your life. But we have to talk about when debt does typically make sense, our folks, and we'll get to that right after the break. Alright, Joe, we are back from the break. We've talked about when not to debt. Now we're gonna talk about when to debt. Let's talk about when debt might make sense for you. But here's the thing. Just because something might fall into the smart debt category that we're gonna talk about here,

you don't want to go hog wild. Right. We'll talk more about some special considerations that you want to keep in mind, but for now, here are some instances when debt can make sense. Well, it's just like beer, Matt. Good debt is like a good beer, And you know what, you put a good beer in front of me, it doesn't mean I want six of them, right, And so even good debts, it doesn't mean you want to get

crazy and go overboard. There's a nice, healthy limit. I think even with good debt, we need to make analogies to beers more often. Why have we not done that? Actually? Alright, a new rule for the podcast every episode, have the beer analogy. Yes, yes, we'll make it happen. It's like the SuDS, it's like the foam. I don't know, there's a lot of the aroma of the beer that you appreciate. That's the secondary benefits. All right, So let's talk about

some of those times where debt might make sense for you. Well, getting in education is is one that's often touted and one that Matt and I agree with. We covered this just the other week on the show. We talked about when college is worth it? Like, we asked the question is college worth it? And we came down on the fact that lots of times, for lots of people, it is a smart move, and a college education can be worth it even with debt if you take out a

smart amount. Don't overdo it. But an education is a solid reason to accrue debt in your life. And that's especially because most people going into debt for a college education, well, they're youngsters. They're seventeen or eighteen. They don't have any assets to their name in almost all circumstances, so how

how are they going to pay for college? It's it's just basically an impossibility to pay for college on your own as a youngster in almost all circumstances, and education is actually getting you somewhere, it's moving you in in

the right direction. A good rule of thumb, though, so as to not take out too much debt on a college education, is to not take out more than you'd earn your first year after graduating from school, in your first job, your first year salary, don't take out more money in debt than you're actually going to make in that first year of working. And something else too. I'm

thinking about different school like quote unquote school expenses. Make sure that you're not using your student loan money to, say, buy that new car because you think, oh, I need reliable transportation to get to class, or even like going on spring break right like, just because it's on the school calendar like that, that doesn't make it a school event, right I think you know, if you were to do that, if you were to spend money on things not actually

going towards your education, you're only fooling yourself. So just make sure you're using your actual student loans for education. So education. Another area where we think that debt can make sense is if you're going to start a business. Just like getting an education is investing in yourself, starting a business might be akin to investing in your future income. Right. The business is a great way to create your own

employment and invest in your future. You might need to rent a physical space, you might need a higher help purchase inventory, but most businesses need access to some sort of capital in order to kind of get off the ground. Yeah, starting a business is a legitimate reason to take on debt if you have an idea, if you have a business plan, if it's well thought out, in your plan is for this business to replace having a career, then I think taking on debt makes some sense for that reason.

And then the next reason when debt makes sense for lots of folks is buying a home. Purchasing real estate is probably the easiest debt to justify, since saving for a primary or investment home is in full is basically near impossible. Only the Great Dave Ramsey would say that you should pay cash for a home, and we don't really agree with that, Yeah, Joel. However, we do agree with Dave when it comes to the argument that you shouldn't pay off your mortgage because you get to write

off your mortgage interest. This makes my mortgage a good idea, right, Well, some folks might be able to take that deduction, but a fairly small number of actual homeowners will receive any tax benefit for having a mortgage. So just make sure you're not making that a reason for keeping your debt around. Yeah, I completely agree. I think that's something that a lot of homeowners tout as a reason to have a mortgage

or to take out a loan on a home. The mortgage interest deduction has been overblown for years, and especially with the most recent tax law, it's insanely overblown. Standard deduction, baby, Yes, that's all you need. What I want to say, almost taxpayers take the standard deduction now, and because of that, that means that whatever interest you're paying on your mortgage, it has no effect taxes at all. Yeah, so don't let that be an excuse for a reason to have

a mortgage. For most people, it's just not true. I bet Dave totally loved the fact that the standard deduction got overhauled and then that can no longer be an excuse for most folks. Right, Yeah, It's important to note too, while we're talking about taking out a mortgage debt for a home, that what mortgage interest rates are at nearly all time lows right now, And we actually just recently answered a question about paying more principle on a mortgage

and whether that's a good idea or not. Yeah, and with mortgage interest rates at incredibly low levels, well, I think that is something that we need to talk about

in the dynamic of taking on mortgage debt. I think would be home buyers might see something like that and might determine that it makes sense to take on even more mortgage debt, because why not you can get a mortgage at historically low rates or even buy a home, you know, when they weren't ready to purchase a home yet, right right, right, Yeah, And I think that is one thing that can be a trap for people as they

are thinking about taking out mortgage debt. You know what we just said that it is a debt that makes sense for a lot of people, but even in that vein, it doesn't make sense if it doesn't fit into your lifestyle.

It doesn't make sense if you're stressing your budget to afford the payments, you still want to make sure whatever debt you're taking out is reasonable, and specifically with buying a home, to just make sure that you don't get ahead of yourself, that you don't buy more home that you can afford, or take on just a debtload that you're uncomfortable having. Right Well, what's tricky to Joel is that what's reasonable to one person may not be reasonable

to somebody else. Like somebody else might be much more comfortable with spending a lot of money, like they're spenders out there and their savers. So we'll have some specific numbers as far as what you should keep in mind

later in the show. So, Joel, what's at the core of all these instances where debt might make sense is the fact that you are expecting these things to appreciate, right, Like your education that should allow you to earn more over your lifetime, starting a business that can ensure a steady and not only a steady, but a fulfilling source

of income for years, maybe even a lifetime. And homes, man, they aren't getting any less expensive at least over the long run, right, Yeah, and a primary home, like it shouldn't necessarily be viewed as a great investment vehicle, but we know that real estate does appreciate over the long haul. Yep, yeah, I completely agree. So I think that's, yeah, the biggest difference between kind of some of those debts we mentioned at the beginning that are just not good debts to

have in your life versus these debts that actually makes sense. Well, their debts that are investing in something you're basically investing in your future. All right, Matt, and we're gonna get to some of those specifics. We're gonna talk about what things you need to consider before you actually take on debt and how you need to think about that as a personal decision before you actually do take on more debt, even if it is one of these debts that we think make a lot of sense. And we'll get to

that right after the break. All right, we're back from break. We're talking about when debt makes sense, and it's important not to just consider the specific items that you are considering taking out a loan for, but also to consider your specific life scenario as well. Taking out a mortgage while having massive amounts of student loan debt is vastly

different than taking one out. Once you've paid off all of your student loan debt, your specific income level, your savings rate, and your overall financial trajectory should be considered before you decide to add more debt into your life. Yeah man, And another big factor to consider is how much debt you already have, right like, how much dobt you currently have. Lenders will typically calculate a debt to income ratio to determine how much to lend to you

as the borrower. They do this because they want to make sure that they get paid right. However, here's the thing. Not all lenders will actually calculate a debt to income ratio a d t I, especially during economic booms. You know, lending requirements like they tend to get past and you might find yourself getting approved for a loan that you shouldn't. So in this case, it is up to you to self regulate. And so if you're wondering, like, how do I calculate my own debt to income ratio, well, I'm

going to tell you how to do it. So to calculate it, you just need to divide your monthly debt payments by your monthly gross income, and that I'll give you a percentage rate. And so, for example, let's say you have in debt payments that you have every month, and let's say that you make five thousand bucks every single month. You do that math, and that's gonna give you. Yeah, that's way too high, right, That's there's a reason why

I gave that as an example. Basically, anything below a debt to income ratio is pretty great, is solid, right, like that put you in a great range. But beyond that you start getting into more murky waters. Anything above like that's gonna be bad news. And so this isn't necessarily a perfect calculation. But what I do like about this is you can do some math and figure out where you land. Right beyond, you're gonna be hard pressed to even get approved by a bank for a mortgage

or even getting approved for a credit card. A debt to income ratio that high is something that you're gonna want to try to stay away from. Yeah, you know what a lender says about you, Matt, and what they say you can handle when it comes to taking on debt, well, they're often going to be pretty optimistic, and you should be a little more pessimistic. Well, they're in the business to make loans and loan you money, right, they want to write you that loan, and they want to make

interest back on their money. And so they're gonna tell you that you can afford, well a little more. You can stretch that number, especially with mortgages. This happens, right, you can stretch that a little more. You can afford a house that's worth three thousand dollars when really you should be settling on one that's uh they cost. And

so I think it's important to note that. But I think also if you take a look at your d t I, you you calculate that and you find yourself in that kind of upper echelon that's not good of having a d t I oft or higher. Well, I think the biggest takeaway from that is not to beat yourself up, but it is to to start paying down debt and to avoid taking on new debt. Right, even those debts so we mentioned as debts that make sense, well,

they don't make sense if you can't afford them. And if you have a really high debt to income ratio, well that means you can't afford to take on new debt. So focus instead for the time being on paying off your debt as quickly as possible. Yeah, so d T I your debt to income ratio. That is an important consideration, an important personal consideration when you're thinking about taking out loans. Something else that we want everyone to consider is stress.

Remember that taking on debt can be stressful. Even good debt can lead to lots of amounts of stress. Uh, Those regular monthly debt payments, like they can be financially overwhelming if you overdo it. So make sure that you know yourself. We all have different amounts of risk tolerance and what we're willing to take on. Yeah, consider the mental bandwidth that you feel like you're capable of and make sure that you're not mentally overwhelming yourself by taking

on too much debt. Matt. A long time ago, I think we mentioned this stat that the people that are overwhelmed with debt essentially their i Q drops by thirteen points on average. And that's because debt really does kind of make us us dumber. It overwhelms us in this way. It makes it hard for us to think clearly about the tasks at hand, about our futures. Debt can have this overwhelmingly negative effect on our lives and on our brains.

Well plus man, and we know that I can't afford that thirteen point drop, man, then you're in unsightly i Q territory that would not be good. But basically, I think most of us we don't think about how the debt that we take on is going to, you know, impact kind of our mental functionality and and how well we can cope with the stress that comes along with those increased monthly payments. So let's take, for example, like a investment property and the mortgage that we would take

out by buying one. Let's just assume even that the numbers completely makes sense, they work out, we've done the math, we hit the one percent rule, and that investment property, well, it makes a whole lot of sense from a financial perspective.

There's always risk involved. And if the debt that you took on for that rental property, even if your numbers are fundamentally sound, that you ran in the lead up to just seeing that property, well, if it's going to have an adverse effect on your mental state, then it makes sense to kind of take a step back and

think about what your goals are. And you know, what, it's just not worth it to take on extra debt if it's going to add bigger problems into your life, and if it's going to cause you mental anguish, like that is one of the most overlooked problems that debt creates. Yeah, Joe, what we're talking about here is leverage, right. Essentially, anytime that you can take on debt and use that to

make profits, like, that's what leverage is. But anytime you have leverage, there is risk that is inherently involved, and risk like that leads to stress. And so that is an example of how taking on a debt that, even though it might be good, can lead to more stress in your life. So these are a number of the different considerations, right, that you want to keep in mind when you are personally assessing whether or not you should

take on debt. That might make sense to you, but assuming you've sort of run the numbers, you've looked at all these things, you've you know, you've considered the amount of stress that you're willing to take on. You might be asking yourself like where do I go to get my debt? Which just kind of sounds like a bad thing to say out loud, but you do want to make sure that you're going to go somewhere that is not just reputable, but where you know that you'll get

a good deal. Right, where you can get a good rate. So go into a dark alley and finding someone there who's willing to lend me fifty grand like a loan shark. Is that the place to go, Matt, like a hard money lender. That's what you want. They're so nice too. If you forget to pay or you can't pay, yeah, no, you you want to make sure that you are using the the kind of institutions that won't come after you. Aim your kneecaps exactly. You want to find the best

type of loan for your specific need. While you pretty much always want to avoid the big national banks, yes you do. Yeah, you You also want to always check

with your local credit unions. And this is for student loans, for business loans as well as for a mortgage, and then beyond that those right, if you're looking at getting student loans, obviously you want to start with FASTA for federal loans, but then if you're looking at private loans, make sure that you're checking out sites like Credible or

so FI. If you're looking to get capital for a small business that you're looking at, starting in addition to your local credit union, you can find funding through the s b A, which is the Small Business Administration, if at all possible. And then again for a mortgage, always start with your local credit union, but beyond that you can look at online lenders like Rocket Mortgage and again even with Credible and so far they can be good

options if you're looking at a mortgage. Yeah, but you're right, like where you go to get your debt is so important because you want the best terms. You want the best rate. Sometimes going through a lender that isn't super reputable, they might have different terms that just aren't standard or are really anti consumer and they're not consumer friendly at all.

For instance, you might go to a bank that would have a pre payment penalty for your mortgage, and if you want to get rid of your debt more quickly, well guess what you're gonna pay for that price. But if you go to a credit union or a credible lender like Credible, uh, you know you're not gonna have any of those shady terms with lenders that partner with Credible or with a credit union, And so yeah, you want to make sure that the terms are the best

and where you go makes a huge different. Also, it's important to be selective about the debt that you take on. Even debt for quote unquote good reasons can end badly. Taking on debt is not something that you should do without considering alternatives. So for example, like, should I rent longer so I can save up more in order to buy the house of my dreams in order to buy that starter home whatever it is? Should I be running longer or should I be more content to stay put

where I am for the time being? Or here's another question. Can I go to school or cheaply? Like? Do I need to attend this school? Are there ways that I can find more scholarships in order to help me pay for school? Can I work part time while I'm in school in order to decrease the amount of debt that

I'm taking on? Like, there are all these questions that you can ask instead of just blindly taking out the maximum amount you can Is there a better way to hustle to start my small business while I'm working full time? Is this something that you can launch while you still have a regular paycheck at your day job and putting in those extra hours in the evenings and on the weekends. It's not something that I want to do full time

for the rest of my life working two jobs. But is it something that you can do in order to get jump started and avoid taking on that added risk. Being selective about the debt you take on and asking yourself those hard questions is crucial in order to make sure that, even when debt makes sense, that you're doing it wisely. Yeah. Man, even though taking on debt can be good in certain situations, that doesn't mean debt is

a welcome to me. Go be thoughtful. We want you to be thoughtful and careful about what debt you bring into your life. Essentially, make sure that you have a plan to get rid of it, and preferably like in short order. Right, if you have debt, no, your plan to tackle it. But then even beyond that, not all debt necessarily needs to be paid off as soon as possible.

Right if you want to keep that debt around because maybe you have a really, really great loan, maybe you've got a fantastic mortgage with an incredibly low a p R. Well, make sure that you have a plan for investing the difference, like the money that you're not paying to pay down that mortgage. Make sure that you are investing that money

and being smart with your money. Yeah, some of these debts makes sense, and it doesn't make sense to pay them off as quickly as possible to the exclusion of every other goal financial goal that you have in your life. So be careful out there. Some of these debts might make some sense, but as in all things, moderation is key, and even taking on good debt, we would suggest, requires a lot of moderation as well. So, Matt, let's get back to the beer that we had on the show today.

We had a check Pilsner by our buddies over at Yeast Atlanta Brewers. What was your take on this one? Well Man, Before I shared my, you know, my thoughts on this beer, I thought it would be interesting to share what exactly is a check pilsner and the name itself check Pilsner. It's almost redundant because it's sort of like saying an a T M machine. Really is it like literally the only beer they make in Czechoslovakia or something almost so like if I went to Czecho, Slovakia

and I said, could you get any other beer? If I said, give me a Pilsner. Would they just look at me like you idiot? All of our beer at Pilsner. Possibly, I don't know. But that's the thing craft beer, man, It's it's making its way around the world, and so there's all types of beers everywhere. But the name pilsner, basically what it means is that it's a beer from the city called Pilson, which is a city in Check.

And so to call it a check Pilsner is sort of not necessary, Like you can just call it a Pilsener because like, at the core of it, you go back in history and a Pilsner was a beer from Check. So just a little a little beer history for you. There man, there we go. But Joel Man, my fossil, this beer are that it's this tastes like a classic

European beer. Like if I envision going over to Europe on vacation and I just sit down at a random restaurant in any country basically in the entire continent of Europe and asked for a beer, Well, this is what they're going to give me. It's light, it's refreshing. I feel like this is a beer I could essentially have pretty much with any kind of cuisine across all of Europe.

It's interesting enough to enjoy, but at the same time, it doesn't have so much flavor going on that it would detract from a meal, all right, So he said it would pairal well with any cuisine, any cuisine. What about a lean cuisine? Man, did you eat those in the nineties, because I totally did. I remember going through that phase at home where like the microwavable little meals like the parmesan chicken on top of edgies or something like that, you kind of like peel up the corner

stick in the microwave for a three fifty. Well, if our friend John will donate another bottle, I'll try it with a link cuisine and I'll report back. So gross, All right, So this beer, in my opinion, it had a light body but a full flavor punch. At the same time, it had kind of hints of clothes in there, a little bit of a banana bread feel. I'm kind of going on Matt today on on this episode like it with the flavor references. But yeah, so a little

bit of banana bread. And so you know what, I say that this beer was tasty enough that how the money has got to take a road trip to Pilson to check out some more and see how they taste over there. Oh man, I'm totally gonna add that to my to my bucket list. Actually go to Pilson and order a Pilsener. It doesn't get more real than that, right, Yeah, it's gonna happen one of these days. All right, Matt,

that's gonna do it for this episode. And I just hope more than anything that folks walking away from here we'll know to tread lightly with debt. It can be sneaky, but but it can also you know, make sense for people in a lot of addit a lot at different times in their lives. Yeah, we loved that. No, no, that's not the takeaway. Tread lightly, that's the takeaway. Okay. And if you want show notes through this episode, you just go to our website how to Money dot com.

And if you enjoyed this episode, we would love for you to leave us a review over at Apple Podcasts. Know that that review will help others to define our show and that will help them to do smarter things with their money. Yeah, all right, man, Well that's gonna be it until next time, Buddy, best friends out, best friends out