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Should You Rent Your Car on Turo? The Costs, Taxes, and Insurance Nobody Mentions · Becoming Financially Confident

• 0:07
  If you've ever had medical care, you may have received a piece of mail that says, this is not a bill printed across the top.
• 0:14
  That's called an explanation of benefits.
• 0:17
  And we're reviewing it line by line.
• 0:19
  Today, we're also going to review the side hustle of renting out your personal card to companies like Turo to make some money.
• 0:25
  Before.
• 0:25
  Before we get into these two topics, let's quickly cover some headlines.
• 0:29
  What you can negotiate on your lease, how the 2026 changes to dependent care benefits affect working parents, and why the price at the pharmacy isn't necessarily the lowest price you can get.
• 0:42
  Becoming financially Confident.
• 0:50
  Once again, welcome to Becoming Financially Confident, where we break free from money shame, one conversation at a time.
• 0:56
  We're live every Monday, Friday from 11:30am to 12:30pm Eastern.
• 1:01
  Yeah.
• 1:01
  And I'm Ralph Estep Jr.
• 1:02
  I'm a little less froggy today as I celebrate my 54th birthday today.
• 1:08
  What an amazing thing.
• 1:09
  But more importantly, 26 years of wedded bliss to my wife.
• 1:13
  So to my wife, I love you very much, Jennifer.
• 1:16
  Thank you for putting up with me for 26 years.
• 1:18
  But I am the accountant on this show with 30 years of experience, 26 of which married to my wife, Jennifer.
• 1:25
  Beautiful.
• 1:26
  I am Juliet.
• 1:27
  I'm just a regular person who's going to be asking Ralph all the questions because if I have them, then you may have them, too.
• 1:33
  And the truth is, we're two very different people having conversations about the things that affect our money and your money.
• 1:39
  And I just want to remind everybody, we got two house rules here.
• 1:41
  Number one, no shaming anybody about money.
• 1:44
  What happened yesterday happened yesterday.
• 1:46
  Today's a brand new day and nobody's going to be judged for what they didn't know.
• 1:49
  Our whole goal with the show every day is to give you information to help you make better decisions.
• 1:55
  I just want to say, you know, I love how Duchess of nj, every day she comes and watches the show, she's just like, good morning.
• 2:02
  I'm ready.
• 2:04
  Yes.
• 2:04
  Thank you so much for joining us.
• 2:05
  We appreciate the enthusiasm of Dutchess.
• 2:09
  That is a great thing.
• 2:10
  And we appreciate that she's getting value from the show as well.
• 2:13
  Yes.
• 2:14
  Yes.
• 2:15
  So to everybody who is listening the show to the show, if you have a question that you're thinking about and you want just want to have additional voices, some additional thoughts on it, don't be afraid to send your
• 2:27
  questions to us at Becoming financially Confident dot com.
• 2:30
  No personal finance question is off limits.
• 2:33
  And let me tell you, Raf and I, we have so Many questions about different aspects of life and how it ties back to our personal finance.
• 2:40
  So I think this is a really comfortable place where you can get started if you just want some extra voices in your head, I guess.
• 2:47
  And I'll throw one more thing out there.
• 2:49
  I encourage everybody to invite a friend.
• 2:52
  This is not some secret pal, a secret handshake kind of place.
• 2:55
  We want to invite everybody.
• 2:57
  If you know somebody that could get benefit from the show, invite them to the show.
• 3:00
  Maybe they can't make the live show.
• 3:02
  Send them a link to our website becoming financiallyconfident dot com.
• 3:06
  But the more the merrier here because wherever you are on your financial journey, I want you to understand this.
• 3:12
  We've all been there and you're not alone in that.
• 3:15
  We want to welcome you to our group, welcome you to our community and send more people our way.
• 3:20
  We're happy to talk to them.
• 3:25
  The first headline for today.
• 3:27
  If your lease is coming up for renewal, your landlord's offer isn't necessarily the only option you have.
• 3:33
  Right now, nearly two out of every five apartment listings are offering concessions to attract new tenants, like a free month or waived fees.
• 3:42
  Ralph, let's explore what options renters have to negotiate.
• 3:45
  Well, I want to start off with the word you just used there at the end.
• 3:48
  Negotiate.
• 3:49
  Yes.
• 3:50
  Remember, you have some power in this.
• 3:52
  A lot of people get locked into a lease and they just, well, I got no other options.
• 3:56
  Well, you are thinking, thinking like that is going to keep you trapped.
• 4:00
  So what feels like an open renewal letter is a negotiation.
• 4:05
  And the problem is a lot of people don't tell renters that question or don't give them that option.
• 4:10
  There are many things you can talk about.
• 4:12
  You can talk about reducing rent.
• 4:14
  You can talk about giving you a free month.
• 4:17
  You can talk about, hey, here's a great idea, how about another parking space or maybe some kind of concession they can give.
• 4:23
  Because here's the thing that people don't understand.
• 4:26
  Landlords don't want that property to turn over, meaning they don't want to have to rent it to somebody else.
• 4:31
  That costs them real dollars.
• 4:32
  I work with clients every day who have rental properties or multiple rental properties.
• 4:38
  It cost the landlord about one to two months worth of rent to find a new tenant.
• 4:44
  So you have some negotiation room.
• 4:46
  That's the first thing.
• 4:48
  And I feel like it's landlord's biggest fear is that there's nobody.
• 4:52
  Like the reason why they have a rental property is to pay off the mortgage or, you know, be able to go somewhere else.
• 4:57
  Right.
• 4:58
  And so exactly what Ralph said.
• 5:00
  If a landlord cannot rent that unit out, they would rather rent it out at a lower price, depending on the market, versus not getting any assistance, any payments at all.
• 5:09
  Yeah, because listen to this one.
• 5:10
  The average typical US asking rent in July of 2026 was $1,962, which is like, wow, that's a big number.
• 5:19
  But here's the interesting number.
• 5:21
  39.6% of listings, that's new rental listings carry a concession, some kind of concession, whether it be a free month, no pet deposit.
• 5:32
  Hey, we've got great parking spaces, whatever those things are.
• 5:36
  So this is a great time to talk about, hey, are there things that you can do for me?
• 5:41
  Because, again, they don't want to fill the place.
• 5:43
  They don't want to have to fill the place, I should say.
• 5:46
  Exactly.
• 5:47
  And something that Raf and I were talking earlier is like, maybe renting out, like, just you or you and your partner or whatever is not working out for you.
• 5:56
  Well, there are other ways to potentially save money if that's, like, what you're looking for.
• 5:59
  Right.
• 6:00
  There's other living situations, whether it's finding roommates to live with or it's moving in with your parents or some other form of living accommodations.
• 6:10
  There are multiple ways to look at this if you're trying to decrease the amount of living expenses you're paying towards your living situation.
• 6:18
  Yeah.
• 6:19
  These are one of those places where you can, you know, think outside the box.
• 6:21
  And we were talking about this earlier.
• 6:22
  I know Juliet and other people are doing new things, like finding roommates and finding people after college to sort of hang out together and have a.
• 6:31
  A living arrangement that saves everybody money because it's expensive to be on your own.
• 6:36
  Yeah.
• 6:37
  And what Ralph and I were talking about, it was like this.
• 6:40
  This concept of your chosen community or chosen family.
• 6:45
  Right.
• 6:45
  So it's like intentionally building that community and being like, oh, I kind of like living with you.
• 6:49
  Why don't we.
• 6:51
  I like hanging out with you.
• 6:52
  I feel like we have a lot of the same values, like, why don't we parlay that into a living situation as well and see how that works out.
• 6:59
  And I think that'd be a great conversation for another day when we can talk about how to make that work.
• 7:04
  We can talk about some legal documents you might want to put into place, some agreements of understanding.
• 7:09
  But let's get in and move on to our second headline for today.
• 7:17
  The dependent care account at your job just got a raise.
• 7:20
  It's the first raise since 1987 for 2026, the limit went from $5,000 to $7,500 per household.
• 7:30
  And at the same time, the Child and Dependent Care Credit's top rate went from 35% of what you spend.
• 7:37
  Ralph, what does this mean?
• 7:39
  And if I'm a parent, like, how do I navigate this?
• 7:42
  Well, let me break this down into information that you can actually use.
• 7:46
  What we're talking about here is a couple of different things.
• 7:50
  If you work for an employer and they give you what's called a flexible spending agreement, one of the things that you can do is you can carve out a certain amount of your taxable income and put it into
• 8:02
  a bucket for dependent care expenses.
• 8:06
  Since 1987.
• 8:07
  Yes.
• 8:08
  1987 goes back that far.
• 8:10
  The maximum amount that you could put in there was $5,000 per household.
• 8:14
  Okay.
• 8:15
  We all know that daycare cost about five times that.
• 8:19
  So they've done.
• 8:20
  What Congress and the legislature have done is they've actually increased that to $7,500 per household.
• 8:27
  So basically, what they're doing, if you think about it in real simple terms, what you do by taking that money out of your taxable income, it reduces the tax on that money.
• 8:35
  It's not part of your adjusted gross income.
• 8:38
  Okay.
• 8:38
  At $5,000, if you're in the 20% tax bracket, it saves you $1,000.
• 8:43
  Pretty simple.
• 8:44
  Well, if you can boost that to 7,500, now you're saving 20% of 7,500 instead of 20% of 5,000.
• 8:54
  So it's a big savings because it takes it right off the top.
• 8:57
  You still pay Social Security, Medicare tax on this, but you don't pay federal and state income tax on.
• 9:01
  So that's option one.
• 9:02
  If you have that dependent care benefit at work, you got to take talk with hr.
• 9:07
  A lot of times there is a window, what they call an enrollment period for this.
• 9:11
  So this is the time we're getting closer to the end of the year, the time to ask that question.
• 9:16
  The thing you need to understand.
• 9:17
  Oh, go ahead.
• 9:18
  Oh, I was gonna say.
• 9:19
  So this is dependent care.
• 9:20
  It's under fsa.
• 9:22
  Like, FSA is the umbrella, and dependent care is one item underneath it.
• 9:25
  Right.
• 9:25
  Cause I understand fsa.
• 9:26
  You can also use it for, like, vision and dental and medical.
• 9:28
  Yeah, it's basically what we call a cafeteria plan.
• 9:31
  Like, you can walk through the cafeteria and say, I'm gonna take this.
• 9:33
  I'm gonna take this.
• 9:34
  I'm gonna take this.
• 9:35
  This is one of those things that you can do if you don't have that option at work, when you go to file your tax return, there's also a thing called a dependent care credit where you can get this
• 9:46
  credit on your tax return.
• 9:48
  Now, you can't do both.
• 9:50
  So if you have it with your, your W2 with your employer, that's what you got.
• 9:55
  Max that out.
• 9:56
  If you don't have that option because your employer doesn't offer that, that sort of thing, you can do it on your tax return.
• 10:01
  And what they're talking about here is the amount that you could get as a credit has increased from 35% to 50% of what you spend.
• 10:09
  But I want to be careful there because that headline is kind of deceiving because if you're one of those folks that's spending what the average American is spending on childcare and it's spending 16, $17,000 a year per child,
• 10:22
  okay, this headline would think, oh, I can deduct half of that cost.
• 10:26
  Not quite.
• 10:27
  There's still a maximum amount per child that you can deduct per year.
• 10:31
  The big thing here, the reason I want to talk about this today, is we're getting closer to the time when enrollment benefits period opens up.
• 10:38
  This is a great time to talk to HR and make sure you understand what this looks like.
• 10:43
  Because hey, if you can save a couple hundred dollars or $1,000 here, this is a big number.
• 10:49
  It's not going to be a huge number, but it's definitely going to help you in your financial journey.
• 10:54
  So we try to bring you topics where we can help you save a couple dollars here and there.
• 10:57
  And this is definitely one of those things.
• 10:59
  I have a quick follow up and then I know Duchess of NJ in the comments also has a follow up.
• 11:03
  My quick question is if you have the option, are you recommending that if you have the option to your employer offers you dependent care fsa, do that first or okay, full stop because the.
• 11:16
  Dollar is better there.
• 11:18
  Got it.
• 11:19
  Now, Dutchess asked a question and she says what's the difference between an HSA and fsa?
• 11:24
  Quick question, simple question.
• 11:27
  Flexible spending account is an fsa.
• 11:29
  So basically you can take a certain amount of your taxable income and flexibly spend it in other places.
• 11:34
  And HSA is a health savings account.
• 11:39
  It's a great topic to talk about another day because these are one of the most underutilized tax benefits that are out there.
• 11:45
  And full transparency.
• 11:48
  I've known about HSAs for years, but it wasn't until last year that I actually started funding one for myself.
• 11:54
  Basically, hsa, if you have a high deductible health insurance plan.
• 12:00
  The IRS will allow you to put a certain amount of money into a fund every year that you can use for medical expenses.
• 12:09
  The benefit to that is that thing grows tax free, and as long as you use it for medical expenses, you can keep that puppy forever.
• 12:18
  Yeah, it's a great benefit.
• 12:21
  You just reminded me I have to check up because I used to also have HSAs.
• 12:25
  I need to check up on those as well.
• 12:27
  And I think I do agree it's a really great topic for a future breakdown segment.
• 12:31
  So if you all want to keep hear about that.
• 12:33
  And here's one other thing I want to remind you about.
• 12:35
  If you ever leave an employer.
• 12:37
  Yeah.
• 12:38
  You may still have HSA money sitting out there in an account with that employer.
• 12:42
  So make sure you follow up on those things because that is your money.
• 12:46
  I got to do that.
• 12:47
  It's a definite.
• 12:53
  You hand your pharmacist your insurance card and you get one price, but there are at least three different prices.
• 12:59
  Published analysis estimate that on 20% to 25% of prescriptions filled in this country, the price they quote you at the counter is not the cheapest one available.
• 13:10
  Ralph, why would insurance ever be the expensive option?
• 13:14
  Although now that since we've been doing this show, I'm just like, insurance, always the more expensive option, right?
• 13:19
  Well, see, and here's the thing.
• 13:21
  Like, everybody assumed that pharmacies are out there to help you feel better.
• 13:25
  You know what pharmacies are doing?
• 13:27
  They're there to make money.
• 13:29
  They're a business.
• 13:30
  So nobody asked this question because.
• 13:33
  Oh, it's rude.
• 13:35
  No, it's okay.
• 13:36
  Ask the pharmacist a couple of questions.
• 13:39
  Number one, is there a generic form of this prescription?
• 13:43
  Because what most insurance companies give you a benefit or a lower price if you pick the generic.
• 13:50
  93% of generic prescriptions cost under $20.
• 13:54
  A lot of people don't know that because they don't ask.
• 13:56
  In fact, what I do is when I go to the doctor, I say to the doctor, hey, you want me to try out this cool new prescription?
• 14:01
  Is there something that works just as good that costs less money?
• 14:04
  So that's thing number one.
• 14:06
  Second thing, A lot of people have a copay with their health insurance for prescriptions.
• 14:11
  That copay could be $20, $25 could be higher than that.
• 14:16
  Ask the pharmacy what the cash price is, because sometimes the cash price is actually less than your copay.
• 14:24
  There's a great app out there called Goodrx.
• 14:27
  You can go into Goodrx, put in the prescription that Your doctor wrote you and say, here's what I want to do.
• 14:34
  So instead of giving them your insurance card, you give them your goodrx number.
• 14:40
  This will save you hundreds of dollars.
• 14:43
  If you actually want to play this game.
• 14:46
  That's a big deal.
• 14:48
  You might have a question for me.
• 14:50
  Oh, no, I was just gonna say I looked in the comments and Duchess of NJ responding to the last one says, I have fsa, but I think I might want to utilize an hsa.
• 14:59
  Yeah, yeah.
• 14:59
  And dudges.
• 15:00
  I'll throw something out there.
• 15:01
  As you get older and I know you and I are not that far off.
• 15:06
  Age wise, we're very similar.
• 15:08
  The HSA becomes sort of like a savings account for the future.
• 15:11
  I just had a client in my office yesterday.
• 15:13
  We're having this very conversation.
• 15:15
  I said, put the maximum you can into an HSA of a year.
• 15:18
  I think for a family, husband and wife, I want to say it's almost.
• 15:22
  It's over $9,000 that you can put into that.
• 15:24
  Now, number one thing, it reduces your taxable income.
• 15:28
  So that comes right off the top, which is beautiful.
• 15:30
  Second thing, it grows tax free.
• 15:33
  So that money, whatever in the account.
• 15:35
  I use a company called Lively.
• 15:36
  They actually are my HSA because I'm a small business.
• 15:39
  I don't have a big HR company.
• 15:41
  So you don't have to have a big business to do this.
• 15:43
  That's the best part of this.
• 15:44
  There are companies out there online, be careful who you use, but there's companies out there that will allow you to do this.
• 15:50
  But here's the other secret to this.
• 15:52
  When you turn 65, you no longer can put money into an HSA.
• 15:58
  So if you are like me, I just turned 54 today.
• 16:01
  For the next 11 years, my goal is going to be put as much as I can in the HSA account and not use it.
• 16:08
  Because see, there's a demand right now you're thinking, well, I put this money in hsa, let me go.
• 16:12
  Use it when I go get prescriptions.
• 16:14
  Let me, let me use it for co pays.
• 16:16
  Let me go.
• 16:16
  That's great.
• 16:17
  Except for if you've got that 65 pending where you're going on Medicare.
• 16:23
  Everybody in this country has to go on Medicare at 65.
• 16:28
  Once you hit 65, you cannot put any more money into an HSA.
• 16:32
  So if you are, like Dutchess said, of distinguished age.
• 16:35
  I like that very much.
• 16:36
  I am of distinguished age.
• 16:38
  Then this is a great time to put that money in there and let it grow and grow.
• 16:43
  Because here's the thing.
• 16:44
  Here's the truth is a truism about life.
• 16:47
  You are going to spend money on medical expenses as you get older.
• 16:51
  That is it.
• 16:52
  That's a fact of life.
• 16:54
  Seen this over 30 years in my practice.
• 16:56
  So here's the thing.
• 16:57
  On your very next refill, number one, ask for the cash price.
• 17:01
  You're not being rude.
• 17:02
  Pharmacies, get it.
• 17:04
  Before you hand over your insurance card, take a look at GridRx.
• 17:07
  There's other ones out there.
• 17:09
  And pick whatever one is lower.
• 17:11
  Because you might find you can really save some money with this and then go fund that HSA account.
• 17:16
  Like I said, I think that's a great topic.
• 17:18
  We'll put it into our.
• 17:19
  We're just having our planning today for next week's shows.
• 17:22
  We'll put that in our planning bucket.
• 17:24
  What do you think, Juliet?
• 17:25
  I think that's a good idea.
• 17:26
  One last quick question on the HSA and fsa, can you have both at the same time?
• 17:30
  Yes, you can.
• 17:32
  The thing you need to understand about FSAs, though, and I want to make sure that everybody understands this, an FSA is a use it or lose it device.
• 17:41
  And what that means is you gotta be very careful with an fsa, if you put money into your flexible spending account, you gotta use that.
• 17:49
  So if you're putting money into FSA for medical.
• 17:52
  Because there's two different things and we don't have time to talk about today, there is a way to put money into an fsa, into a medical bucket with your employer.
• 18:00
  Yeah, you gotta make sure you use that by the end of the year.
• 18:03
  So this is the time of year to start thinking about how much do I have in fsa?
• 18:06
  Do I need to go buy new glasses?
• 18:08
  Do I need to go buy new contacts?
• 18:09
  Do I need to go refill all my prescriptions?
• 18:12
  Because that is a use it or lose it, whereas the HSA is not a use it or lose it.
• 18:17
  And that's why I tend to prefer the hsa.
• 18:21
  But the hsa, you have to be involved in what's called a high deductible health insurance plan.
• 18:26
  Now, most people would argue that every insurance plan is high deductible now because it costs so much.
• 18:30
  But just be aware of that.
• 18:32
  Confirm that you're in a high deductible insurance plan before you do anything here.
• 18:37
  Yeah, we'll do it.
• 18:38
  We'll do a breakdown, a deep dive soon enough about this.
• 18:41
  Very good.
• 18:42
  All right, well, let me ask you a question.
• 18:44
  When's the last time you check your credit score?
• 18:47
  Many people, as we talked about on the show have avoided it for years because they're worried about what they're going to find.
• 18:53
  But the Federal Trade Commission reports that 1 in 4 people, 1 in 4, 25% have a error on their credit report.
• 19:01
  And you might be paying extra for loans for someone else's mistake that isn't yours.
• 19:07
  So today I want to encourage you.
• 19:08
  Don't let someone else's typo punish you.
• 19:11
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• 19:12
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• 19:13
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• 19:16
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• 19:20
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• 19:26
  We earn a small commission but it doesn't cost you a dime.
• 19:29
  That's becoming financially confident.comwallet.
• 19:37
  Right now we're getting into our side hustle corner.
• 19:39
  I'm just going to ask everybody in who's listening right now.
• 19:42
  Do you, have you ever heard of the company Turo T u r O.
• 19:46
  If you have, let us know in the chat.
• 19:49
  Okay.
• 19:50
  What Turo is.
• 19:51
  Turo lets you rent your personal car to other people when you're not using it.
• 19:56
  It sounds an easy way to make money from a car that's sitting in your driveway.
• 20:00
  But there are costs, taxes and insurance risks that can change the math.
• 20:05
  So Ralph, let's quickly discuss and try to figure out how people decide, like is this a side hustle worth them doing?
• 20:11
  And so my first question to you, Ralph, is have you ever used Turo before?
• 20:15
  I have not.
• 20:15
  And actually in full disclosure, I didn't know what Turo was till about six months ago.
• 20:20
  And one of my friends on Facebook started talking about he's going to start renting out his car on Turo and he's actually gone out and bought some high end cars.
• 20:29
  He's bought like a Corvette.
• 20:30
  He's bought some fancy cars with the idea of renting them out on Turo.
• 20:34
  I've never actually rented a car on Turo, but when I bought my last car, the sales guy was telling me about what a great deal this is because he's renting out cars on Turo.
• 20:44
  And I said to him, well, tell me a little bit about it.
• 20:46
  He said the only problem is they may leave these cars wherever they want to leave them.
• 20:51
  And he said it becomes a big issue now.
• 20:53
  You, I think before we talked about on the show, you've actually used a Turo before.
• 20:56
  Yeah, so I have a few stories about Turo.
• 20:58
  So Turo, I've used it When I had to for, like, work trips out into Texas, and the salesperson was completely right.
• 21:07
  Like, I would pick it up from some random parking lots around Texas, and then I would.
• 21:13
  I get to.
• 21:14
  It's easy check in, though, because it's all like, mobile lock in.
• 21:18
  Mobile check in to access the car and all of that stuff.
• 21:21
  And then after you use it, you do have to return it back to.
• 21:24
  So I would return these cars back to random parking lots and then figure out a way how to get.
• 21:29
  Hold on a second.
• 21:30
  Are you saying just a random parking lot?
• 21:32
  Like, is there an app or something that you go and find.
• 21:35
  Here's the parking lot.
• 21:36
  It puts a little needle here.
• 21:37
  There's where you need to go.
• 21:38
  Yeah.
• 21:39
  So there.
• 21:39
  There is an app, and then you find that parking lot.
• 21:41
  But I have picked up cars from, like, grocery store parking lots and also, like, business.
• 21:47
  Like, business campus parking lots.
• 21:49
  So you can.
• 21:50
  You can really, like, set it anywhere.
• 21:53
  And I think the way.
• 21:55
  If I remember correctly, I think the way that Turo markets themselves, it's like a premium luxury.
• 22:00
  And I say this because I had a former coworker who rented a Turo.
• 22:05
  I don't know if it's accidentally.
• 22:06
  Yeah, no, accidentally.
• 22:07
  Accidentally totaled the car and didn't have to pay a thing for the car because it was covered by, like, the price that they paid for the Turo.
• 22:17
  Now, I hope you let me make sure something here.
• 22:19
  And this is gonna be a little bit of a funny for today.
• 22:21
  Did you say accidentally wreck the car or was this, like, an intentional, Like, I'm gonna go destroy this car today?
• 22:27
  No, no, it was.
• 22:28
  It was an actual accident.
• 22:30
  Yeah.
• 22:30
  Because I'm thinking, like, this could be kind of fun.
• 22:32
  Like, you could go out there and rent a Turo with the intention of, like, I'm gonna destroy this.
• 22:36
  It'd be like.
• 22:36
  It'll be like, what do you call it?
• 22:38
  Demolition derby in some random parking lot.
• 22:41
  But, like, let's.
• 22:42
  Let's bring it back to somebody who might be curious, might be interested in doing this from the side hustler perspective.
• 22:48
  Right.
• 22:48
  Like, what are some things that they have to think about?
• 22:50
  We mentioned cost, taxes, and insurance.
• 22:52
  What kind of costs?
• 22:53
  What kind of taxes?
• 22:53
  What kind of insurance?
• 22:54
  Well, I think we need.
• 22:55
  Yeah.
• 22:56
  First thing we need to talk about.
• 22:57
  And thank you for bringing that back to reality, by the way.
• 22:58
  We're talking about side hustles here.
• 23:01
  There are basically, with Turo directly, there's three earning plans that you can pick from.
• 23:05
  And the way that it works is depending upon which plan you pick, the more the price you get to keep.
• 23:10
  But as you keep, more and more of the damage claim is yours.
• 23:13
  And that's one thing we're going to talk about right here from the beginning.
• 23:16
  Understand that you are renting out your personal vehicle.
• 23:20
  If someone decides to destroy your personal vehicle, you're going to be responsible for that because you may have a loan on that vehicle.
• 23:27
  Yeah.
• 23:28
  So all of these companies, Turo, and we're not picking on Turo, each of them have different plans based on what they're willing to cover for damage.
• 23:35
  But here's the thing.
• 23:36
  They don't cover.
• 23:37
  They don't cover wear and tear.
• 23:40
  They don't cover the normal.
• 23:41
  Hey, here's what happens when you rent your car out six days a week and you drive it once, right?
• 23:46
  Yeah.
• 23:46
  It doesn't cover lost income while your car is in the shop.
• 23:50
  So if you rent it to somebody and they wreck the car, they destroy the car, these things are not going to give you money back for the lost rental income that you may be.
• 23:59
  And here's the problem with a side hustle like this, this may work out really well for you.
• 24:04
  And you start to live on that extra income, you start to bank on that extra income.
• 24:09
  Well, these plans aren't going to give you that and they're not going to help you with replacement of a vehicle.
• 24:15
  Yes, it's going to cover the crash, it doesn't cover the car getting older faster.
• 24:19
  So here are four questions that everybody needs to ask.
• 24:25
  Number one question, when you're looking at doing this, what does the platform you're going to work with keep?
• 24:32
  How much do they keep for being on their platform?
• 24:34
  What's that percentage?
• 24:36
  Second question, what does it consume that you already own?
• 24:40
  What I mean by that is what are you going to get from that?
• 24:43
  Third question?
• 24:44
  What tax is nobody withholding because you're self employed now, you are going to get potentially a 1099 at the end of the year.
• 24:51
  And then the final question is how many unpaid hours does it eat?
• 24:56
  Because that's the thing a lot of people don't think about.
• 24:57
  You know, you think about what Juliet just talked about.
• 24:59
  You know, you go to some random parking lot to pick up this car.
• 25:02
  Well, the owner of that car needs to find the car in that random parking lot.
• 25:08
  If you like to go to McDonald's while you're driving and you fill the car with french fries and, and garbage all over it.
• 25:14
  I'm not saying that's you, Juliet, but people are notorious in rental cars for not Taking care of them as they could.
• 25:20
  That's true.
• 25:21
  Every time you rent a car out, you may have to clean the car, take the vacuum to it.
• 25:26
  All of those things need to count into what you're doing here.
• 25:31
  That's really important.
• 25:32
  Now let me break down what Turo has.
• 25:34
  This is their actual spoken thing.
• 25:36
  So they have basically three levels.
• 25:39
  They have a level where you keep 70% of the trip price and your damage responsibility is $250 per claim.
• 25:46
  What does that mean?
• 25:47
  That means they're going to let you keep 70% of whatever the value of that rental is.
• 25:51
  If you're getting $100 a day, you're going to keep 70 of it.
• 25:55
  And you're responsible for $250 per claim.
• 25:59
  If there's an insurance issue, okay, the next one they have and that one.
• 26:03
  First one is called peace of mind.
• 26:05
  Second one is called balanced, where you keep 80%.
• 26:09
  But now that deductible responsibility goes up to 1500 dollars.
• 26:14
  So you're responsible for the first 1500 dollars.
• 26:16
  Let's be honest.
• 26:17
  When you have a car, even if you have a simple fender bender, $1,500 goes quickly.
• 26:22
  Least that's been my experience.
• 26:23
  Because these cars today are mostly plastic.
• 26:26
  Yeah.
• 26:26
  And even if they're not plastic, the stuff that holds the pieces together is plastic.
• 26:30
  So you can even break something small.
• 26:32
  Now, the final one they have is called more earnings.
• 26:35
  And in that one, you keep 90% of it.
• 26:39
  But here's the problem.
• 26:40
  Here's the catch.
• 26:41
  You're responsible for $2,750 of any claims.
• 26:47
  Now, what they say is all three include up to $750,000 of third party liability.
• 26:53
  So if someone rents your car and they run somebody over or they cause some kind of problem, they're going to cover you up to $750,000.
• 27:01
  Got it.
• 27:02
  But that damage responsibility works like a deductible.
• 27:05
  That's the part that you have to pay for.
• 27:07
  Bottom line, that's your responsibility.
• 27:10
  So there's like a couple things that you mentioned.
• 27:12
  I first want to go back to the chat real quick.
• 27:16
  Duchess of nj.
• 27:17
  Oh, my God, that sounds so scammy.
• 27:19
  How safe is that?
• 27:20
  You know, I thankfully I was like picking up the Turo in the daytime, so I didn't.
• 27:24
  I felt okay.
• 27:25
  I felt okay.
• 27:27
  But there are some things that, Ralph, you mentioned that are worth highlighting again.
• 27:31
  Right.
• 27:31
  You never know how people who are going to rent your car is going to treat it.
• 27:34
  Like, I remember one time I rented on Turo, I said, hey, I'M looking for a non smoking car because I don't like the smell of smoke.
• 27:41
  But whoever rented this car before me smoked in the car.
• 27:45
  The car stink.
• 27:47
  And I was like, I don't really want this car anymore, you know, so that, that goes back into like, you know, is that going to be considered lost time?
• 27:57
  Unpaid hours for both for the person who's renting on Turo, and then also what are you going to do for those damages?
• 28:06
  And the truth of the matter is, once someone has smoked in a car, I think it's pretty hard to get that smell out.
• 28:11
  Is that fair to say?
• 28:12
  I mean, you can put, I've seen people put like fabric softeners under the seats and all kinds of different things to help get rid of that.
• 28:19
  But I don't know about you, but like my dad smoked when I was a kid and like even the windows had like this yellow film on them.
• 28:25
  And like you just knew when you got in that car.
• 28:28
  My dad likes to wear a cologne called Royal Copenhagen.
• 28:32
  It's very distinctive.
• 28:33
  But it always, my wife and my kids always laugh because it's like that smells like pop up.
• 28:38
  Who smells like Royal Copenhagen and cigarettes?
• 28:40
  Oh, that's intense.
• 28:42
  It is intense.
• 28:43
  I'm sorry, I didn't mean to interrupt you, but personal stories always help, right?
• 28:46
  Yeah, it does.
• 28:47
  It does.
• 28:47
  And then when you were talking about the three different levels, like if you were going to be renting your car on Turo, the three different levels, I noticed that like, as you get to keep more of your money,
• 28:58
  then your deductible also goes higher, which I'm like, oh, that's.
• 29:01
  That makes sense to me.
• 29:03
  But then you also said, hey, if you have a fender bender, it's already going to be more, probably more than fifteen hundred dollars.
• 29:09
  Which reminds me, a lot of these cars these days, they're all microchipped and everything.
• 29:14
  So that's even more expensive than, you know, if you had like a Toyota 2000 or something.
• 29:19
  No, absolutely.
• 29:20
  And what's interesting is back in March of this year, Turo renamed.
• 29:25
  They used to call them their protection plans.
• 29:28
  I think they got in a little trouble.
• 29:29
  So now they're called earnings plans.
• 29:32
  And instead of the word deductible, now they use the word damage responsibility.
• 29:37
  And they also change another word instead of host take to host share.
• 29:42
  So their words are all talking about how you are the primary responsibility for all of this.
• 29:49
  So if you've decided, hey, this is a great side hustle, I'm going to rent out my car and I'm not picking on Turo because there's other companies that do this.
• 29:55
  Just understand you're responsible.
• 29:59
  They also have a physical damage reimbursement capped at the lesser of the repair cost or $200,000.
• 30:04
  So if you're deciding to go buy a Bentley or some kind of high end Rolls Royce or something like that, and I've seen a lot of these on Turo now.
• 30:12
  Yeah, there's a cap of $200,000.
• 30:14
  And again, it doesn't cover wear and tear.
• 30:15
  There's no lost hosting income and no replacement vehicle.
• 30:18
  That's a big deal.
• 30:20
  Yeah, I'm really surprised that the salesperson you talked to went out and bought a car specifically to put on Turo.
• 30:26
  Like I, to me, I guess, I guess I don't see myself doing that because I'm like, oh, that's another car mortgage and all of that.
• 30:36
  How would you do it, Ralph?
• 30:38
  Well, so actually this particular guy had like seven or eight of these.
• 30:42
  He was becoming like the Turo king, but he had a pretty slick inside thing.
• 30:46
  Here's what he was doing.
• 30:47
  So he was working for a car dealership.
• 30:49
  So just picture this.
• 30:51
  He's got a steady stream of people coming in to trade their cars.
• 30:54
  So what he was doing is he was buying these cars from the dealership on wholesale.
• 30:59
  So if somebody came in and traded their car, let's say Juliet came in and traded her 2020 Honda Accord.
• 31:06
  I don't know what Juliet drives.
• 31:07
  Well, let's just say she had a 2020 Honda Accord.
• 31:09
  Right?
• 31:10
  Yeah.
• 31:10
  He takes a look at this car and he goes, oh, this car's in pretty good shape.
• 31:14
  So what does he do?
• 31:15
  He low balls them on the trade in value.
• 31:18
  Then he buys it from the dealership and puts this car out on Turo as a rental.
• 31:22
  It's a pretty slick way of thinking about it.
• 31:24
  So if I.
• 31:25
  So let's say you're buying a car, you're gonna put it on Turo and I'm like giving away, I'm trading in my Honda Accord and let's say I sell it for.
• 31:35
  Trade it in for 2, 1, 2000.
• 31:39
  Let's play out the scenario.
• 31:41
  Yeah.
• 31:41
  So in other words, let me, let me, let me back up.
• 31:42
  So I probably lost everybody.
• 31:43
  Let's say you go to the car dealership, you're going to trade in your to 2020 Honda Accord.
• 31:47
  Okay.
• 31:48
  Yes.
• 31:48
  And you just say, you know, I don't be bothered with this.
• 31:50
  I'm going to go to the car dealership and see what they're willing to Give me on trade.
• 31:53
  Okay.
• 31:53
  Yeah.
• 31:54
  So this particular person or somebody else looks up the fair market value of that car and they see that that car is worth $22,000.
• 32:01
  Okay.
• 32:02
  So if you were to sell it on your own, you could probably get about 22,000.
• 32:05
  But you're in a dealership, you're doing a trade in.
• 32:07
  And he goes, you know what, I talked to my used car guy.
• 32:10
  The best we can do is about 18,000.
• 32:13
  Oh, okay.
• 32:14
  You see where I'm going with this?
• 32:15
  So now he is captive.
• 32:17
  So you're like, oh, 18,000, that seems fair.
• 32:19
  My payment's only gonna go up $5 a month.
• 32:21
  I can do this.
• 32:21
  I get my new fancy, whatever that is.
• 32:24
  Yeah.
• 32:24
  He turns around and says to the used car manager, hey, guess what, let's work together on this.
• 32:30
  And I'm not suggesting this guy's doing this, but it's a pretty interesting thing.
• 32:33
  Yeah, yeah.
• 32:34
  I'll give you the $18,000 for the car.
• 32:36
  So the car dealership's like, cool, we're making a deal.
• 32:39
  We're selling a new car, we're trading a company's happening, and now we're selling it out the back door.
• 32:43
  Because he knows what this car's value is and he also knows what, what is renting right now on Turo, what he can get for that.
• 32:50
  So he's making bank on every one of these.
• 32:52
  But again, you got to factor in because he told me this.
• 32:55
  He's had to chase down people who didn't return the cars.
• 32:58
  Oh, my gosh.
• 32:59
  He's had to try to find them because now I think he had some kind of thing he puts in the car, like a.
• 33:04
  A GPS so he can find it.
• 33:06
  But he told me he's had to go other states to get his car back.
• 33:09
  He's found cars that like people, people went through the drive through and what they didn't eat, they just left on the seat.
• 33:16
  I mean, this is what we're talking about.
• 33:17
  I know it's disgusting, but it's like, this is the thing, it's the same if you rent out your house.
• 33:22
  No one is going to take care of your stuff as well as your take care of it.
• 33:26
  So understand it.
• 33:27
  So that's the first thing.
• 33:28
  Understand the cost.
• 33:29
  The second thing, and I really want to get into this, Juliet, is there's a tax ramification here.
• 33:34
  What is it?
• 33:35
  Because you're making money, you are now self employed.
• 33:39
  Yes.
• 33:39
  So you're going to have to keep track of all the income that you have coming in minus the expenses for this.
• 33:44
  Now, the iris helps a little bit because they will actually give you what's called standard mileage.
• 33:49
  The way that works is that you at the end of the year, report how many miles were on your car.
• 33:56
  Now, for the first half of this year, you would get 72 and a half cents a mile.
• 34:01
  Then in July, they changed that to 76 cents a mile.
• 34:04
  Okay, so basically, let's just say you rented your car out for 10,000 miles.
• 34:08
  You would get a $7,600 deduction.
• 34:11
  So whatever your total revenue that came in from renting your car out, you're going to deduct that.
• 34:16
  Yeah, but here's the problem.
• 34:18
  Whatever that net income is from that, you're going to pay tax on that you're going to pay federal, state, and here we go again.
• 34:27
  Self employment, 15.3%.
• 34:31
  Yeah.
• 34:32
  So that means that when I did the math, after the cost that you're getting from.
• 34:38
  Because here's the thing, the IRS doesn't just conjure up these numbers.
• 34:41
  They're real numbers.
• 34:42
  The earth is basically saying to operate a motor vehicle in the United States, the average cost is about 76 cents a mile.
• 34:50
  So if you take the 76 cents, then you get to about 14 cents of everyday dollar of profit per mile.
• 35:00
  That's really what it comes down to.
• 35:02
  Got it, Got it.
• 35:02
  So then it becomes a numbers game.
• 35:06
  Well, I want to throw one more thing out there.
• 35:08
  There also are insurance issues.
• 35:11
  Call your insurance company.
• 35:13
  Not all insurance companies will allow you to do this.
• 35:17
  Wait, is this a separate insurance?
• 35:19
  Because like most car insurance, you're doing it for you and you're doing your family.
• 35:25
  Right.
• 35:26
  Are you saying that this insurance is a separate type of insurance because it's like, oh, somebody else is going to drive the car.
• 35:33
  Well, I'm going to give you an example.
• 35:34
  Like the Illinois Department of Insurance as we were preparing for this show.
• 35:37
  This is a state regulator.
• 35:39
  And what Dave said is personal auto policies typically exclude car sharing and that the owner can be personally liable for any damage and injuries during a rental.
• 35:50
  That coverage, including legal defense, could be denied.
• 35:54
  So ask.
• 35:55
  So before you decide to rent your car out, pick up the phone, go online, reach out to your insurance carrier, whether it be Geico, travelers, whatever.
• 36:04
  The big ones are Allstate, I don't even know all them.
• 36:06
  State Farm, whatever those are, and ask them, hey, I'm thinking about renting my car out on Turo.
• 36:12
  What are my options?
• 36:13
  Is there a rider that I can buy?
• 36:15
  A rider is something you add to your policy.
• 36:18
  Bottom Line's gonna cost you more, so you gotta factor that into it.
• 36:21
  But some insurers are going to say to you, we won't cover that.
• 36:25
  Yeah.
• 36:26
  Because now you're operating as a business, and most of the time, people's insurance is personal insurance, not business insurance.
• 36:33
  This is what, Blair, this is the problem with side hustles.
• 36:35
  Let me be blunt, Ralph.
• 36:36
  Rant for a second.
• 36:37
  Yeah.
• 36:38
  Side hustles blur the distinction between business and personal.
• 36:42
  You have to be aware of that.
• 36:44
  Yeah.
• 36:44
  This is one of those areas to be super aware of.
• 36:46
  There are certain insurance companies that won't cover you at all.
• 36:50
  So just be aware of that before you get into this and you say, oh, Ralph, I didn't think about this.
• 36:54
  Think about this.
• 36:56
  So, number one, are you willing to take the risk on the wear and tear of your vehicle?
• 37:00
  Number two, are you prepared for the tax cost?
• 37:03
  And number three, are you going to be covered in the event of an accident?
• 37:07
  Because, again, the people driving your car, they might be great people, but they're not going to take as good a care of it as you would take care of your car.
• 37:15
  So if you know the facts up front, I'm not saying this isn't a bad side hustle.
• 37:19
  It may very well be a decent side hustle, But I think you have to have the right mentality for it.
• 37:24
  If you've got a car that.
• 37:26
  I would definitely not do this as your primary auto.
• 37:28
  Like, this is not like, I'm going to go to work and during the day I'm going to rent it out on Turo while the car's sitting.
• 37:32
  No, this is a second car, not your main car.
• 37:36
  Not.
• 37:36
  This is what I need to get back and forth to work from.
• 37:38
  So understand those things.
• 37:40
  Make sure you're keeping track of your income and expenses, because the IRS is going to want that information.
• 37:46
  I think we can.
• 37:48
  One final answer from the both of us.
• 37:51
  Yes or no.
• 37:52
  Would you do this side hustle?
• 37:54
  And what's your one reason for that?
• 37:57
  Yes or no?
• 37:58
  So, Ralph, go first.
• 37:59
  I would say no, and here's why I would say no.
• 38:02
  I think there are better ways to invest money and make a better return.
• 38:08
  That's issue number one.
• 38:09
  Issue number two is I don't really want the risk because I think there are ways that this could be construed to where you would have risk.
• 38:17
  If somebody goes out there and runs over a child or runs over or causes an accident.
• 38:22
  I just don't trust any of the platforms to say, oh, we got you covered now.
• 38:26
  It's no problem.
• 38:27
  You're insured.
• 38:27
  I don't trust that.
• 38:28
  But I'm also the kind of person that has what's called an umbrella policy on top of all of my other insurance policies.
• 38:35
  And again, an umbrella policy.
• 38:36
  We're going to go a little bit of a deep dive here for a second, but an umbrella policy basically expands the amount of coverage that I have for each of my insurance types in an umbrella format.
• 38:46
  So let me explain.
• 38:47
  An umbrella policy, like most auto policies, cover up to about 750,000 to a million dollars worth of damage.
• 38:55
  Okay.
• 38:56
  Okay.
• 38:56
  If you run over a child, you are going to get sued for more than a million dollars guaranteed.
• 39:03
  What most people don't understand is that your insurance company is going to write that check for a million dollars and shake their hands and go away.
• 39:09
  You're still responsible for whatever that damage is.
• 39:12
  So if you.
• 39:13
  And God forbid this happens, you run over a child, the child dies, they take you to court, you lose, and the jury awards you $10 million.
• 39:21
  Awards them $10 million.
• 39:22
  Yeah.
• 39:23
  Yeah.
• 39:23
  Your insurance company is going to happy to write a million dollar check.
• 39:27
  You'll never get insurance again and you're still on the hook for the other nine.
• 39:30
  Yeah.
• 39:30
  So what an umbrella policy does is it allows you to buy a policy that ties like your automobile insurance and your homeowner's insurance and increases those amounts that they cover.
• 39:42
  So like I've got a $3 million umbrella policy.
• 39:46
  So I still have a million dollars in coverage per vehicle.
• 39:49
  But then if this happens, instead of only covering a million, it covers 3 million.
• 39:54
  I mean, you can't get like 10 million, a hundred millions of dollars.
• 39:57
  At some point you got to take some risk.
• 39:59
  So that's the big reason.
• 40:00
  And I'm sorry I took this on a tangent there, but I think it's important.
• 40:03
  I think it's.
• 40:04
  I wouldn't do it because of the insurance, and I don't think it's that much of a value because I don't have time to do it either.
• 40:10
  Yeah.
• 40:11
  I learned about umbrella insurance today as well.
• 40:15
  Okay, so here's my one statement.
• 40:16
  I say no for.
• 40:17
  For all the same reasons that Ralph said.
• 40:19
  But in addition to that, I have no interest in cars.
• 40:22
  Like, I have no interest, interest in figuring out what cars can.
• 40:26
  Are people more likely to rent on Turo?
• 40:28
  And because of that, that would be my first line.
• 40:32
  So then this side hustle is just really not for me.
• 40:35
  Yeah.
• 40:35
  And I love what Dutchess put.
• 40:36
  She loves the Ralph rants.
• 40:37
  Thank you.
• 40:38
  I think maybe we need Some Ralph Rant music.
• 40:40
  Yes, we gotta add some Ralph Rant music.
• 40:43
  I mean, I've got some good sounds like.
• 40:45
  How about that?
• 40:46
  You know, I just think that.
• 40:47
  But.
• 40:47
  But no, thank you, Dutches.
• 40:48
  I appreciate you saying that.
• 40:49
  Also says, don't want strangers in my car.
• 40:52
  Ooh.
• 40:53
  I tend to agree with that.
• 40:54
  That's another reason I wouldn't do it.
• 40:56
  But.
• 40:57
  So it sounds like you're not going to do it either, Juliet.
• 40:59
  Yeah, not for.
• 41:00
  You know, one of these days, maybe we'll find a side hustle that both of us would want to do.
• 41:03
  So that's our.
• 41:04
  That's our goal.
• 41:05
  So here's the thing.
• 41:06
  I would say, here's my takeaway from this one.
• 41:08
  Yeah.
• 41:09
  If you're a listener with a spare car and you know the three answers to the question we talked about, consider it, but really think about it.
• 41:17
  Could you do better with your money?
• 41:18
  Could you spend that money or spend that time somewhere else?
• 41:20
  Understand the timing of that.
• 41:22
  It's not a terrible idea.
• 41:23
  I mean, there are people out there making money with it.
• 41:25
  I don't.
• 41:25
  I don't want to poo poo the whole thing, because there is.
• 41:27
  There is value here.
• 41:28
  But just pay attention to all the details.
• 41:30
  I think that's the big thing, my big takeaway here, which leads me to this.
• 41:34
  If you're going to be doing something like this, the thing I've found in 30 years of practice is money messes between friends or with family often start off with a simple favor.
• 41:43
  Hey, can I borrow your car?
• 41:45
  Can I lend you a couple dollars?
• 41:47
  Can I.
• 41:47
  Can you stay here for a while?
• 41:48
  Crashing my rental property.
• 41:50
  And that's why we've got this group called Law Depot.
• 41:53
  And Law Depot helps you build a written agreement.
• 41:56
  And a written agreement isn't about lack of trust.
• 41:58
  It's about clarity.
• 42:00
  And Law Depot helps you create documents like promissory notes or leases.
• 42:04
  We talked about having a landlord lease.
• 42:06
  Maybe you're a landlord.
• 42:06
  You're listening right now.
• 42:07
  You're like, I need a lease.
• 42:09
  I love Law Depot because it uses guided questions built from your state's rules.
• 42:14
  And you can finish one of these documents in one sitting.
• 42:17
  And you can start a free trial today.
• 42:19
  If you're interested in that, go to becoming financiallyconfident.com.
• 42:23
  Lawdepot.
• 42:24
  I am not an attorney.
• 42:25
  We don't give legal advice.
• 42:26
  But I actually use Law Depot.
• 42:28
  It's a great service and well worth the money.
• 42:31
  Again, that's at becoming financially confident.
• 42:37
  Check them out.
• 42:45
  So in this, explain like, I'm Broke segment, we take an actual bill that you get and we're going to break it down.
• 42:51
  Okay.
• 42:52
  So if you guys have one of those explanation of benefits statements lying around your house, and an explanation of benefit statements is something that you get from your medical insurance.
• 43:03
  And on top it says, this is not a bill.
• 43:05
  That's exactly what this is.
• 43:07
  Okay.
• 43:07
  If you have one of those lying around, grab them real quick.
• 43:10
  It has lots of different dollar amounts on it.
• 43:13
  And Ralph is going to walk us through because I have no idea what I'm supposed to care about.
• 43:18
  Great.
• 43:18
  So.
• 43:19
  And I think most of us have seen one of these things.
• 43:21
  And I want to talk about the feeling first.
• 43:23
  Yeah.
• 43:24
  Because when you get this, you see this page, it says it's not a bill, but it's got numbers on it that would ruin your life.
• 43:32
  Because it's like, wait a minute, what.
• 43:34
  This doesn't make any sense to me.
• 43:35
  And what happens with a lot of people.
• 43:37
  And I'll talk about my son a little bit today, my youngest son, most people put it in the drawer and forget about it.
• 43:43
  And that's a reasonable response because that.
• 43:44
  You don't understand what this is.
• 43:47
  So let's walk through this one by one.
• 43:49
  And I'll use my, my son as an example.
• 43:51
  I shared with this.
• 43:52
  I think I can remember it was on the live show, if we did it as we were planning the shows.
• 43:56
  But my son ended up taking a trip to the er.
• 43:58
  And when he went to the er, he did the right thing.
• 44:01
  He gave them their insurance card and all that sort of thing, and they they billed his insurance.
• 44:05
  And now he's starting to get.
• 44:06
  And it's been about 30 to 45 days, he's starting to get these EOBs, which is basically explanation of benefits.
• 44:15
  Right.
• 44:15
  What the.
• 44:16
  So what happened here behind the scenes is the provider sent a bill to the insurance company.
• 44:22
  To your insurance company.
• 44:23
  Right.
• 44:24
  An insurance company said, well, let's look at this, let's see what we got going on here.
• 44:28
  And then they decide whether they're going to pay something, what they're going to pay, the amount, all that sort of thing.
• 44:34
  If you have deductible, all this is built into this.
• 44:37
  Right.
• 44:37
  The thing that this is important you need to understand is that there's usually a UO column on an eob.
• 44:46
  Yes, the UO column is a big deal because that's your patient responsibility line.
• 44:52
  That's not the number that you pay, though.
• 44:54
  So again, when they say this is not a bill, be very careful of that because in in some cases, the provider will just get rid of that charge.
• 45:04
  So don't pay from an eob.
• 45:05
  That happens all the time.
• 45:07
  Got it.
• 45:07
  Okay, wait.
• 45:08
  I want a clarification here, because it sounded like your son was receiving multiple EOBs.
• 45:15
  Is that right?
• 45:16
  And let me.
• 45:17
  Let me explain to you why.
• 45:18
  So he went to an urgent care first.
• 45:21
  Yeah, that's the first billing person.
• 45:24
  The urgent care called 911 and had an ambulance come to the facility.
• 45:28
  Oh, no, that's bill number two.
• 45:31
  Then he went to the local hospital.
• 45:33
  That's bill number three.
• 45:34
  But even it gets worse than that within the hospital.
• 45:37
  The hospital has.
• 45:38
  He had to get some imaging done.
• 45:40
  There's a bill for that.
• 45:42
  They gave him some prescriptions.
• 45:44
  There's a bill for that.
• 45:45
  So his EOB is like.
• 45:47
  Yeah, it's a book.
• 45:48
  It's like reading a book.
• 45:50
  And when he got the eob, the only thing he saw was, dad, this says, I owe them $6,700.
• 45:57
  Now, the reason he owed him $6,700 is that he's got a deductible, and his deductible is a big number.
• 46:04
  Right.
• 46:05
  So he's got to pay the first $6,700 out of pocket.
• 46:09
  Oh, got it.
• 46:10
  Got it.
• 46:10
  So the insurance said, oh, those are valid claims.
• 46:13
  Yes.
• 46:13
  If you didn't have this deductible, we would pay it.
• 46:16
  But patient responsibility is this.
• 46:19
  And he calls me and he says, dad, he says, I'm broke.
• 46:21
  I'm done.
• 46:21
  I'm bankrupt.
• 46:23
  And I said, hold on.
• 46:25
  This is a explanation of benefits.
• 46:28
  Don't send them a payment because you don't have the payment anyway.
• 46:31
  Yeah, but this is a.
• 46:33
  Hey, I got to pay attention to this.
• 46:34
  This isn't one of those things to put in the drawer and not worry about it.
• 46:38
  So let's break down the four.
• 46:39
  I'm sorry.
• 46:39
  Good.
• 46:40
  I have one more question before we get into the payment stage of everything.
• 46:43
  So you mentioned your son potentially had five different billings at this point.
• 46:47
  Is it.
• 46:48
  Should he be expecting 5 explanation of benefits, or, you know, like, can he expect three to four?
• 46:56
  Is it a guessing game?
• 46:57
  So what most insurance companies do is they send you one document, but it might be broken into separate pieces.
• 47:03
  Like, here's this.
• 47:04
  They usually do it by provider.
• 47:06
  So he's got a line on there, the urgent care.
• 47:09
  Bang.
• 47:10
  Then he's got the.
• 47:11
  The.
• 47:12
  The ambulance company, which is a local volunteer fire company.
• 47:15
  Bang.
• 47:15
  And then he's got the big hospital chain and that.
• 47:18
  So he's got three separate things on there.
• 47:20
  Yeah, they could send you three separate ones.
• 47:21
  Because it all comes down to when did the provider actually send in the bill.
• 47:26
  In this particular case, they were pretty clear about it.
• 47:29
  Everything was billed the same day because they wanted to get paid.
• 47:32
  Got it.
• 47:33
  Okay, so now let's get into the payment side of things.
• 47:35
  So you said, okay, when you're looking at this is not a bill and you owe this amount, that is a starting point, right?
• 47:43
  Yeah.
• 47:44
  There's what happens next.
• 47:45
  There's four numbers on this page that you need to key in on.
• 47:49
  Number one number is the amount billed.
• 47:51
  That's what the provider charged.
• 47:54
  Almost nobody pays that.
• 47:56
  So ignore that because providers will bill whatever they can there.
• 48:00
  It's kind of like throwing spaghetti at a wall.
• 48:02
  They want to see what sticks.
• 48:04
  The second number is the allowed amount.
• 48:06
  That's what your insurance company has negotiated with the provider.
• 48:11
  What they're willing to pay, what your plan will pay, and what the provider already agreed the service is actually worth.
• 48:18
  Okay.
• 48:19
  Third thing, plan paid.
• 48:22
  Which means what did your insurance send them already?
• 48:25
  Because by the time you get to an eob, the insurance company will have already sent them something.
• 48:29
  So I'll use my son's an example, because the actual charges were almost $7,800.
• 48:36
  Right.
• 48:36
  The insurance company paid the difference between his deductible and that for that particular provider.
• 48:42
  So the insurance company turned around and sent a check or an electronic payment for what the plan paid.
• 48:49
  And then the final column, which will startle you and make you want to stand up in your check chair, is the patient responsibility.
• 48:56
  That one is yours.
• 48:57
  And that's the only number on the page that should ever show up with a bill with your name on it.
• 49:02
  So those are the four things you need to be careful of.
• 49:05
  But here's one more thing I want to throw out there because I've actually experienced this.
• 49:08
  There's a thing that some providers do which is called zero billing.
• 49:13
  Let me explain.
• 49:14
  Yes.
• 49:16
  So when some provider signs up with an insurance company, they agree that they will accept X number of dollars for an event.
• 49:26
  So let me give you an example.
• 49:27
  So my son had to get an mri.
• 49:31
  I think it was an mri, some kind of imaging thing.
• 49:33
  Well, the provider might say that in his particular case, they charge $5,000 for this imaging.
• 49:38
  Okay.
• 49:39
  Okay.
• 49:40
  Now, the insurance company already negotiated with all of the providers and said, we're only going to pay you $1,500 for that MRI.
• 49:48
  You can charge.
• 49:49
  You can bill 5,000 all you want.
• 49:50
  We're not paying that.
• 49:52
  The benefit to the person having insurance is, you get the benefit of that negotiation that already happened between the insurance company and the provider.
• 50:00
  But here's what happens.
• 50:01
  Sometimes the provider ignores that and they say, we're still going to come after you for the $5,000 for that particular service.
• 50:09
  We want that money.
• 50:10
  Yeah, it's called a zero billing thing.
• 50:11
  It's a big deal I've actually gotten involved with in my own particular case where they did that.
• 50:17
  And I said, hold on a second.
• 50:18
  I said, my insurance company already negotiated with you and said that most are willing to pay, but, oh, too bad.
• 50:23
  You came to our facility.
• 50:25
  You will win on those.
• 50:26
  Most of the time you can get the state insurance commissioner involved in that.
• 50:30
  That's a big deal.
• 50:31
  Okay, so we were talking about the billing side of this, but go ahead.
• 50:35
  Yeah, yeah, I was going to say, like, so is the zero billing.
• 50:39
  How do you, as the person receiving health care, know when to look out for that?
• 50:46
  So if you get that EOB and you see that column that says this is what the provider charged, and then you see that second column that says what the plan pays or what the plan allows.
• 50:57
  That's the key.
• 50:59
  Once you see that plan allows, then you go back and say, hey, wait a minute.
• 51:04
  So when you get this bill, this eob, that's not a bill.
• 51:07
  That is a bill.
• 51:07
  Hint is a bill.
• 51:10
  What you next want to do is then reach out to the provider and say, I want you to explain all the charges.
• 51:16
  You can ask for an itemized bill.
• 51:20
  That's the key to this.
• 51:21
  That's why I say, don't put it in the drawer.
• 51:23
  If you see anything that says patient responsibility, here's the other thing.
• 51:26
  If you see patient responsibility, zero, smile and say, this is why I have insurance.
• 51:31
  I'm not worried about this anymore.
• 51:33
  That's the ideal situation.
• 51:36
  But if there's a column that says patient responsibility, that doesn't necessarily mean that that's what you're going to pay.
• 51:42
  Use my son's example again.
• 51:44
  So he sees this patient responsibility, $6,700, and he's freaking out, comes over to the house because he lives on his own.
• 51:50
  He's like, dad, what do I do?
• 51:52
  I'm like, stop.
• 51:53
  Calm down.
• 51:54
  We go into the Internet, we go find the hospital's website, and we find their financial system.
• 52:00
  Click on the financial system, and we found their financial assistance program.
• 52:05
  Financial assistance program.
• 52:06
  In their financial assistance program.
• 52:07
  Because most hospitals have these.
• 52:09
  Because most hospitals get money from the state or from the government.
• 52:13
  If you make a certain number of income or Less.
• 52:16
  They have programs to help reduce the amount that you owe them.
• 52:20
  Right.
• 52:20
  And that's what we're doing right now.
• 52:21
  He's working through that right now.
• 52:23
  It's an interesting process.
• 52:24
  They told him it's going to take 30 days.
• 52:25
  He sent in his documentation.
• 52:27
  They pretended like they didn't get it, and he sent it to him again.
• 52:30
  I said, send it to him with a red receipt for your email.
• 52:33
  Send it to him certified mail if you have to.
• 52:34
  He says, dad, you keep asking me for more stuff.
• 52:36
  I'm like, yes.
• 52:36
  They're trying to get you to jump through hurdles.
• 52:38
  Yeah.
• 52:39
  But the last thing they asked me for, dad, is a copy of my tax return.
• 52:41
  Of course they did.
• 52:42
  Because they have an income thing and they want to justify your income.
• 52:45
  Yeah.
• 52:46
  So don't give up.
• 52:48
  Yeah.
• 52:48
  But the important part of this is so many of these EOBs, what happens to so many people is they ignore the eob.
• 52:54
  It goes into the circular file, you know, the trash can.
• 52:57
  First of all, don't do that.
• 52:58
  Shred it, because it's got a lot of personal information on it.
• 53:01
  Yep.
• 53:01
  That's a whole nother issue.
• 53:02
  But then what happens is you just forget about it.
• 53:05
  And then all of a sudden, this provider starts sending you a bill because you totally ignored it.
• 53:09
  You didn't ask them for an itemized thing, and you let six months go by because you're like, ah, the hell with it.
• 53:13
  I'm not going to pay it.
• 53:14
  Wait, is it at this time where it potentially goes to a third party?
• 53:18
  Yes, that's exactly right.
• 53:20
  That's exactly me.
• 53:22
  Serious.
• 53:23
  Exactly.
• 53:24
  All of the stories, things that we've talked about together.
• 53:28
  So when you ignore it, then what happens is the provider wants to get paid.
• 53:32
  Yeah.
• 53:33
  And you're not paying them.
• 53:35
  And you haven't complained to them, you haven't said to them, I think you overcharged me, which they may have.
• 53:38
  I'm not saying they did, but they may have.
• 53:40
  Yeah.
• 53:41
  And all of a sudden you get a call and it's a collector, it's a debt collector, it's a bill collector saying, hey, dude, by the way, sorry about your trip to the ER, but you still owe us $2,700.
• 53:53
  How you intend to pay that?
• 53:54
  And you go, what?
• 53:55
  What?
• 53:55
  What?
• 53:55
  I have insurance.
• 53:56
  I shouldn't.
• 53:57
  But you didn't pay attention.
• 53:59
  All right, no judgment, no shame on this show.
• 54:02
  But you see how this all works in this main big thing that comes back full circle.
• 54:07
  Understand the mail that you get.
• 54:09
  Yeah.
• 54:09
  I'm glad that we talked about this because now I have more understanding of the explanation of benefits.
• 54:15
  So let me see if I remember the most important things.
• 54:17
  My takeaways and the audience.
• 54:19
  You guys can have your own takeaways as well.
• 54:21
  Okay, Ralph, check my knowledge.
• 54:22
  Are you ready?
• 54:23
  I'm ready.
• 54:24
  I'm buckled up and I'm ready to roll.
• 54:25
  Okay.
• 54:26
  So the explanation of benefits.
• 54:27
  It's this paper that says this is not a bill.
• 54:30
  Okay.
• 54:30
  And, yeah, you should take it as that.
• 54:32
  There are a lot of numbers that are important.
• 54:34
  I'm just going to read out the name of the numbers.
• 54:37
  There's the amount billed, allowed amount, plan paid, and then the patient responsibility.
• 54:42
  I think what's the most important thing for you to pay attention to are the plan paid and the patient responsibility.
• 54:49
  Why plan paid if your insurance has paid a portion of it already, that means you can potentially go back and say, zero billing or like, my insurance covered it.
• 55:01
  Why do I still need to pay the rest of this?
• 55:03
  Right.
• 55:03
  And have that conversation.
• 55:05
  The patient responsibility number.
• 55:06
  That is super important.
• 55:07
  If it's zero, you're happy.
• 55:09
  I don't know.
• 55:10
  Do something happy for yourself.
• 55:11
  If it is not zero.
• 55:13
  Some things that you need to do is call your provider, get a list of itemized billing, and then you can figure out what your next steps are, which is, do you need financial assistance?
• 55:27
  Do you need to figure out a payment plan?
• 55:29
  You have to have these conversations in order to know what to do next for yourself.
• 55:34
  You can always advocate for yourself.
• 55:36
  Never the cardinal rule here.
• 55:38
  Once you get an eob, never let it go to the trash can, because if it gets to a bad place, then you'll have collectors and loan sharks coming after you, and we don't want that.
• 55:49
  Well said, Juliet.
• 55:50
  Yay.
• 55:52
  You passed the test for today as you normally do.
• 55:54
  But, no, this is a big deal.
• 55:56
  And this is why I wanted to talk about this today.
• 55:57
  Because these things, people get them Dutches put in the comment.
• 56:00
  I've got some at home to read the eob.
• 56:03
  Yes.
• 56:03
  Don't ignore those in full transparency.
• 56:06
  I've ignored some.
• 56:08
  I mean, I definitely have to.
• 56:10
  So I'm going to start looking through my mail this week, and that's why.
• 56:13
  We talk about what we talk about on this show.
• 56:16
  Yeah.
• 56:20
  All right, we're going to check in with our money move.
• 56:23
  Ralph, just do a quick reminder.
• 56:25
  What is this week's money move?
• 56:26
  So a couple things.
• 56:27
  We're going to ask you to add a carrier pin to your cell phone.
• 56:31
  Today's a big day, by the way.
• 56:33
  If you're An Apple nerd like I am.
• 56:35
  Today's the big launch of some new hardware.
• 56:37
  They're going to be launching a new phone that's like a big fold open phone.
• 56:40
  I've heard the price tag of this thing.
• 56:42
  It's ugly, but I always get the new stuff.
• 56:43
  But anyway, that's why it's relevant.
• 56:45
  Add a PIN number with your cell phone carrier.
• 56:49
  Okay.
• 56:50
  So that someone can't swipe your information.
• 56:52
  And then the other two things we talked about was adding a multi Factor authentication code to your email and to any bank accounts that you have.
• 57:00
  All of this to try to keep you out of somebody taking advantage of you taking over your account and getting access to the stuff you work so hard to have.
• 57:10
  And this is so easy to do.
• 57:12
  All you have to do is just make sure you list it.
• 57:14
  You can do this in 10 minutes or less.
• 57:16
  Okay.
• 57:16
  And so we're going to check in on Friday whether you have done or not.
• 57:19
  I have already done it, which is yay.
• 57:21
  And Ralph has already done it, which is really good.
• 57:24
  But yeah, that is our this week's money move.
• 57:27
  That's it.
• 57:29
  Yeah.
• 57:30
  Ralph, before we end the show for today, give us a preview what's going to happen tomorrow and on Friday.
• 57:35
  Thursdays are becoming like my day of like, just laying it all out there.
• 57:39
  So I talked about today being my 26th wedding anniversary.
• 57:43
  Well, tomorrow I'm going to get real with the audience because I'm going to share with you tomorrow how my wife and I were not on the same page for many years about money.
• 57:51
  Yeah.
• 57:52
  And I'm the accountant in the house.
• 57:54
  And it still came close to costing me my marriage.
• 57:57
  And that's what I'm going to talk about tomorrow because there's a lot of people that are watching or listening to us and you're having these same situations.
• 58:04
  That's tomorrow.
• 58:04
  And here's the best part.
• 58:06
  On Friday, get ready for this.
• 58:07
  We're going to bring in a special guest.
• 58:08
  Her name is Karen, Karen Hackman.
• 58:11
  She runs a service called Marriage and Money.
• 58:14
  And she's going to talk us through how she works with couples to coach them through exactly this type of situation.
• 58:20
  So we're going to be a big great show tomorrow with Ralph being fully transparent.
• 58:25
  And on Friday, these are two.
• 58:26
  Listen, if you have going through this situation, if you know somebody's going through this situation, invite them to this show because we are going to break it down, how to save marriages.
• 58:35
  And I really believe this.
• 58:37
  This is the kind of stuff we're going to talk about for the next two days, which can save relationships and save marriages because a lot of us come from different places.
• 58:46
  We're going to talk tomorrow and Friday about how to make that work for everybody.
• 58:50
  And y' all know, like, I'm gonna have a lot of questions for Ralph, especially as we get deep and uncomfortable.
• 58:57
  Yeah.
• 58:58
  So that is it for today's show.
• 59:00
  Thank you for coming to Becoming financially confident today.
• 59:04
  Yep.
• 59:05
  And I'm Ralph Eastpp Jr.
• 59:06
  And I'm Juliette.
• 59:07
  If you have a question, please do send it to us@becomingfinanciallyconfident.com we have a lot of ideas just from today's topic.
• 59:14
  Thank you for engaging with us in the chat there.
• 59:17
  And yeah, join us tomorrow live.
• 59:19
  How does that.
• 59:20
  Just remember, our whole goal is to help you break free from money shame one conversation at a time.
• 59:26
  We're going to continue that tomorrow.
• 59:27
  So you have a great day, everybody.
• 59:29
  And thank you for everybody who joined us today.
• 59:31
  We will see you tomorrow.