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3 Numbers to Check on Your Auto Insurance Declaration Page · Becoming Financially Confident

• 0:07
  It is Friday, September 18th.
• 0:10
  Fannie Mae and Freddie Mac just opened the door for lenders to use a credit score that can include your rent payments.
• 0:16
  So if you've been paying rent on time, that history may finally help you qualify for a mortgage.
• 0:21
  Student loan forgiveness accounts have also changed for some borrowers.
• 0:25
  It is Friday, so we're going to check in on this week's money move, taking some listener calls, diving into an auto insurance bill, and closing the week with some wins.
• 0:42
  Welcome to becoming Financially Confident, where we are breaking free from money shame, one conversation at a time.
• 0:48
  We're live every Monday through Friday from 11:30am to 12:30pm Eastern.
• 0:53
  And good Friday, everybody.
• 0:54
  I'm Ralph Estepp Jr.
• 0:55
  I'm a licensed public accountant, and I'm the one with 30 years of experience.
• 0:59
  And I'm Juliet.
• 1:00
  I'm just the person who's going to ask Ralph all the questions I have because you might have them, too.
• 1:05
  Yeah.
• 1:05
  And as you can tell, we're two very different people having conversations about the things that affect our money, but more importantly, they affect your money.
• 1:12
  We got two house rules here.
• 1:13
  There's no shame in anybody about money.
• 1:16
  The decisions you made yesterday are in the past.
• 1:18
  Today's a brand new day, and.
• 1:19
  And nobody's going to be judged for what they didn't know.
• 1:22
  Our goal with the show every day is to empower you and equip you to help you make better decisions.
• 1:28
  So if you have any questions about anything related to personal finance, do send them to us@becoming financiallyconfident.com, no question, is off limits.
• 1:36
  Yeah.
• 1:37
  Because wherever you are on your financial journey, guess what?
• 1:39
  We've all been there.
• 1:41
  And you're not alone.
• 1:48
  For years, you could pay your rent on time every month and get no credit for it.
• 1:52
  When it comes to building your credit history, on September 9th, Fannie Mae opened a credit score called VantageScore 4.0 to every approved lender.
• 2:00
  And rent payment history can now be part of that score.
• 2:03
  But rent does not report itself.
• 2:05
  So, Ralph, let's talk about this.
• 2:07
  How does this actually roll out?
• 2:10
  So this is actually a really important thing because one of the things, as I remember when I first bought my first home, you have to go into buying a first home.
• 2:18
  They want to see a credit history.
• 2:19
  We've talked about that on the show a couple times just this week.
• 2:22
  Well, in the past, mortgage account mortgage underwriters didn't have a way to see if you paid your rent on time.
• 2:30
  So what would happen a lot of times is they'd ask you for a letter from your landlord and say, hey, can we get proof that they paid their rent on time?
• 2:38
  What this is going to do, which I think is really good.
• 2:41
  It could have a double edged sword here though.
• 2:44
  The thing I think I like about it is it's going to allow that history of paying rent to show on your vantage score 4.0 score, which is a mortgage credit score that a lot of people use.
• 2:58
  Here's the bad side to this.
• 3:00
  If you missed your rent a few times, if you paid your rent late, this is also going to affect you.
• 3:07
  So be aware of that.
• 3:08
  And also here's another thing.
• 3:10
  It's only going to be for those landlords who take the time to subscribe to the credit scoring or to this credit agencies like we talked about, the three credit agencies and actually report this information.
• 3:22
  So this is a good first start.
• 3:24
  It's going to help those people who have been on time with their rent every month.
• 3:29
  It's going to potentially hurt those folks who didn't.
• 3:33
  But it's going to take some implementation time.
• 3:35
  But the more scoring the better, I guess one could argue because if you're doing the right things, you're getting ahead the right way.
• 3:41
  Well, I have two questions here.
• 3:44
  So I don't know if you've ever heard, but there are some credit cards I think that specifically give you some benefits, some perks with paying your rent.
• 3:56
  I think Bilt credit card was one of those.
• 3:58
  I'm not exactly sure how that will play into this.
• 4:02
  It feels like it's two separate things, but I'm not sure.
• 4:06
  Yeah, I would say they're two separate things.
• 4:07
  What that credit card is basically doing is allowing you to pay your rent with a credit card.
• 4:12
  So if a credit card is reporting to the credit bureaus, it's kind of doing what this is doing.
• 4:17
  So that's actually a positive thing there.
• 4:19
  Okay.
• 4:20
  And then my second question here is how come, how come mortgage?
• 4:24
  If you're getting a mortgage loan, why are they going to specifically see how well you're doing paying on rent?
• 4:30
  Like I would imagine they want to see how good you're paying at everything.
• 4:34
  Absolutely.
• 4:35
  So they are going to look at those things.
• 4:36
  But the one piece that's been missing for the longest period of time is how are you paying for where you live?
• 4:42
  And if you're buying a house, you're going from rent to mortgage.
• 4:46
  Here's the thing about credit.
• 4:48
  Most people will keep a roof over their head.
• 4:50
  So if you're not even paying for that, if I'm in The lender seat.
• 4:55
  I'm saying, wait a second, I'm taking a double take.
• 4:58
  If I'm the mortgage underwriter and I go look at rent and I go, this person is late on their rent every month or this person has moved to this place, to this place, to this place and there's rent
• 5:07
  issues that I'm thinking, wait a second, how serious are you about being able to pay a mortgage?
• 5:14
  So here's a couple takeaways.
• 5:15
  This is a great time to ask your landlord or your property manager, do you report my rent payments to a credit bureau?
• 5:22
  Some of the big property managers already do.
• 5:25
  It doesn't cost you a thing.
• 5:26
  And you're never going to know if you don't ask.
• 5:28
  Now if the answer is no, you can pay a third party service to do it.
• 5:33
  But I want you to ask them three things before you do that.
• 5:36
  It's kind of what Juliet was talking about.
• 5:38
  If you're going to go out and do this, and I'm not saying it's a bad plan, ask them which bureaus do they report to?
• 5:44
  1, 2 or all three of them.
• 5:45
  Because what you'll find, sometimes they only report to one.
• 5:48
  Do you report my past history and how far back and if I cancel, does the record stay or disappear?
• 5:54
  Because that's one of the scary parts of this.
• 5:56
  Let's say you went out and paid that service.
• 5:59
  So if they stop reporting, in other words, if you stop paying this service on a monthly basis to manage this for you, if you stop paying them, are they going to pull it from your credit report?
• 6:10
  Is it going to look weird?
• 6:11
  Like all of a sudden you looks like you didn't pay your rent anymore.
• 6:14
  So I think those are all important questions to ask.
• 6:17
  But again, having worked in the mortgage industry, worked in the credit industry, I love this because the people who honor their commitments are going to benefit from this, assuming that their company reports the bigger property management companies are
• 6:30
  already reporting because they want to affect credit so they can get the benefit from looking at those credit scores.
• 6:35
  Got it?
• 6:42
  Imagine you have 104 payments towards student loan forgiveness with 16 left to go.
• 6:47
  You log in one morning and it says 97.
• 6:50
  What the heck happened?
• 6:52
  Public Service loan forgiveness is supposed to wipe out what's left on your federal student loans after 120 qualifying payments while you work full time for the government or qualifying nonprofit.
• 7:03
  The Education Department recalculated those counts this summer and some people watched months of credit disappear.
• 7:08
  The department says it was fixing counter code errors going back to 2024.
• 7:13
  So Ralph, what does somebody do in this instance when their progress gets taken back?
• 7:18
  Yeah, let's back up and talk about what this is first.
• 7:21
  So what we're talking about here is there are certain jobs, if you agree to do 10 years of service, basically 120 months, they will forgive your student loans.
• 7:32
  And here's the part that's important to understand.
• 7:34
  A lot of people took these jobs, they're lower paying jobs, but they're looking at the benefit down the road of how these student loans are going to get paid off.
• 7:42
  Now, the thing I don't like about this headline is this was a silent thing.
• 7:47
  They didn't send out any letters, they didn't pay any attention to any of these things.
• 7:52
  So here's what you do to fix this.
• 7:54
  If you log in to studentaid.gov again, that's studentaid.gov type it in yourself.
• 7:59
  Again, as we talked about the other day, find your qualifying payment count and write the number down with today's date next to it.
• 8:06
  Do that even if nothing looks wrong, because that written number is what makes a future change probable or provable.
• 8:12
  And then compare it to your own records.
• 8:14
  Look at your old pay stubs, look at your old bank records.
• 8:17
  This may be one of those things where the government made a mistake.
• 8:21
  Like, I'd love to say that the government never makes mistakes, but you and I both know that's not true.
• 8:25
  We're all human.
• 8:26
  Absolutely.
• 8:27
  So this is one of those things to go take a look, make sure that their numbers match your numbers.
• 8:32
  And here's the thing, I'm going to say, don't stop making payments.
• 8:35
  If this is like, I'm fed up, I'm not going to make payments anymore.
• 8:38
  To heck with them.
• 8:39
  Bad plan.
• 8:41
  Spend a little time, do your math, do your homework and reach out to somebody and say, hey, I think your numbers might be wrong.
• 8:48
  Or it could be that their numbers are right and they had been reporting a number that was wrong all along.
• 8:55
  That's what the story seems to say is they went and reshuffled the decks here.
• 8:59
  But go and check your payments.
• 9:01
  If you have copies of your bank statements, it should be pretty easy.
• 9:04
  Now, of course, we're talking about 10 years.
• 9:06
  So I don't know too many people that keep 10 years of bank statements.
• 9:09
  Unfortunately, I think eventually we're going to get to a point where we talk about, you know, making sure when you have a new credit card or when you get a new loan, like being able to create your version
• 9:21
  of it so you can always almost like audit you Know, whoever you're paying to the mortgage lender or anything like that.
• 9:27
  I think it's so important.
• 9:28
  So many people just accept what the bank statement says or they accept what the credit card statement is.
• 9:33
  Yeah, and I've done it, too.
• 9:34
  Like, I'm not throwing anybody under the bus, but there are errors made.
• 9:39
  And that's why I think for every single bank account you have, every single credit card you have read every single line every single month, because you will find stuff that you didn't know about.
• 9:49
  Look at Karen talked about it last week that her husband had fraud on his credit card account, but had never opened up the statement to look.
• 9:56
  I see that all the time with businesses.
• 9:58
  I see that with individuals.
• 9:59
  So this is one of those, hey, here's a quick takeaway.
• 10:02
  Look at your statements.
• 10:04
  Don't assume that they're correct because there's a lot of things that could be going into making that a problem for you.
• 10:09
  Yes, Yesterday we talked about money that's coming to you.
• 10:18
  Today we're talking about how to.
• 10:20
  That you need to pay attention to how long that money is valid for.
• 10:24
  So FTC refund checks generally expire 90 days after they're issued.
• 10:29
  If the refund comes through PayPal, you've got 30 days.
• 10:32
  And there are refund payments going out right now to Grubhub drivers, drivers and diners.
• 10:37
  More than 640,000 payments worth over 23 million.
• 10:42
  Ralph, how do you know if that check in your mail is real?
• 10:44
  And what should you do when you get one?
• 10:46
  So that's two questions that require a little bit of digging here.
• 10:50
  Because here's the thing.
• 10:51
  I've gotten some of these checks before.
• 10:53
  Sometimes they look like junk mail.
• 10:55
  It looks like a postcard.
• 10:56
  And you're looking at this thing going, is this real or is it.
• 10:59
  I'm a date myself.
• 11:00
  We used to have this commercial.
• 11:01
  And is it real or is it Memorex?
• 11:04
  So Memorex were cassette tapes?
• 11:05
  I have no idea.
• 11:06
  They were cassette tapes and they had this commercial that would say, could you tell the difference between the two?
• 11:11
  That's really what we're talking about here.
• 11:12
  Yeah, yeah.
• 11:13
  The thing you can do is you can look at it and say, does this look like a check?
• 11:17
  A check is going to have a payee.
• 11:19
  It's going to have an amount on the reverse of that check.
• 11:22
  It's going to have instructions where you sign it.
• 11:24
  So those are the things to look at.
• 11:26
  But realize, pay attention to your junk mail, because sometimes you've gotten one of these and it might Be a small amount.
• 11:32
  Pay attention to them.
• 11:33
  Here's what you want to be careful of, though, because I've seen these go out too, right.
• 11:36
  There are some that are just phishing for information and they want you to sign something.
• 11:41
  They want you to.
• 11:42
  Most of the time, they're going to tell you to go to a website to redeem something, and that's when they grab you.
• 11:48
  So just pay attention to this.
• 11:50
  If you are aware of some of the things we've talked about on the show, you can go to the FTC website and look at.
• 11:56
  See, is this really a true payback?
• 11:59
  Here's a couple things.
• 12:00
  Open your mail.
• 12:01
  Yes, actually open it.
• 12:04
  Those things expire after 90 days.
• 12:07
  If you think you're owed something, don't wait to be found.
• 12:10
  You can go to ftc.gov refunds.
• 12:12
  You can actually type that in yourself and you can search to see if there's money out there waiting for you.
• 12:18
  And here's the thing.
• 12:20
  No one is going to ever ask you to pay a fee or hand over a bank account number to release money you're owed.
• 12:25
  So those are really the big takeaways.
• 12:28
  Anyone who does that is a thief.
• 12:30
  Trust me.
• 12:31
  If someone asks you for a bank account information or is asking you for a fee, that person is a thief.
• 12:39
  Do not buy into their nonsense.
• 12:42
  Yeah, I'll say Duchess of NJ in the chat said cassettes.
• 12:46
  Goodness, Ralph.
• 12:47
  And I will say, I guess the younger version of.
• 12:51
  Is it real or is it.
• 12:53
  Did you say Memorex?
• 12:54
  Memorex.
• 12:55
  Yeah.
• 12:55
  That was the name of the company that made cassette tapes.
• 12:58
  Yeah, I guess the younger version is.
• 13:01
  Is it real or is it cake?
• 13:03
  Have you seen those?
• 13:04
  I haven't seen that one.
• 13:05
  I'll have to find a video for you.
• 13:07
  I want to play that on the show.
• 13:08
  See, this is generational.
• 13:09
  Oh, and I want to mention something.
• 13:10
  We talk about dating ourselves.
• 13:12
  So yesterday I was talking about Barney Fife and I couldn't think of where that was from.
• 13:16
  It was a show called the Andy Griffith Show.
• 13:19
  So if you get a chance to check out, this is going to be Juliet's homework for the weekend.
• 13:24
  She is going to go check out YouTube and see if she can find Barney Fife from.
• 13:30
  And I just totally lost it.
• 13:31
  The Andy Griffith Show.
• 13:33
  I will.
• 13:33
  I will do it.
• 13:35
  I'm so curious now.
• 13:42
  So you bought something last Tuesday, but it went on sale this Thursday.
• 13:47
  Before you just accept that you paid more, check out the store's price adjustment policy.
• 13:52
  A lot of retailers will refund the difference if you're still Inside the window.
• 13:56
  And we're heading into a season when prices can move around a lot.
• 13:59
  So, Ralph, let's talk about this price adjustment.
• 14:02
  What's the easiest way to make sure we're not leaving money on the table?
• 14:05
  Yeah, a lot of people don't think about this one, but this is a real deal, and I'm going to back up a step.
• 14:09
  The easiest way to do this is to go comparison shop first, go online, look at the different price points, because there are differences between these, and it feels like you're asking for a favor, but it's not.
• 14:22
  The stores have this in.
• 14:23
  In intentional take five minutes.
• 14:26
  I've even done this within the store.
• 14:27
  I'll be at a store and I'll see like a TV or something I want to buy.
• 14:31
  I'll get my.
• 14:32
  My handy dandy not notebook, my handy dandy iPhone out and I'll just, you know, you can actually take a picture of it, use AI and see does anybody have a better price?
• 14:42
  Now since you're already at the store, take that to the register and say, hey, listen, what I found, this is for sale over here.
• 14:49
  And what you'll find is a lot of times they'll honor that price because they want you to make.
• 14:54
  They want you to.
• 14:54
  To buy it.
• 14:55
  Be careful, though, because there are some store brands that don't have this.
• 14:58
  I actually found this out the hard way with mattresses.
• 15:01
  Believe it or not, mattresses are generally store specific.
• 15:06
  Even it seems like it's a SERTA mattress.
• 15:08
  But SERTA sells to this company, it sells to this company.
• 15:12
  They're different SKU numbers, They're different UPC numbers, and they won't always price match on that.
• 15:17
  So here's the habit to do.
• 15:18
  Go ahead.
• 15:19
  Can we get into the story a little bit?
• 15:20
  How did you start price comparing mattresses in the store?
• 15:26
  So we were looking at a particular mattress when we were looking for.
• 15:29
  I don't remember what it was.
• 15:30
  I think it was one we bought for one of our kids.
• 15:33
  And I just thought it was interesting.
• 15:35
  Like, I thought this price was kind of high.
• 15:36
  So my wife was talking to the salesperson.
• 15:38
  I got on my phone, I'm looking, and I found the same.
• 15:41
  What looked like the same mattress, the same brand name, all this kind of stuff at a different store.
• 15:45
  And I walked up to the sales lady and I said, wait a second, if I go down to this store, I can get it here.
• 15:50
  She goes, oh, no, that's not the same mattresses we're selling.
• 15:54
  And I said, it's the same size.
• 15:56
  Exactly.
• 15:58
  I said, it's the same size, it's the same plushness and all this kind of stuff.
• 16:01
  She goes, yeah, but if you look at it, the product numbers aren't the same.
• 16:06
  And she was.
• 16:06
  Right now ended up.
• 16:08
  She ended up honoring that price anyway because I was fixing to walk out the door.
• 16:12
  Yeah.
• 16:13
  So here's the.
• 16:14
  Keep the receipt on all those things.
• 16:17
  Check 10 days after you buy something.
• 16:19
  You know, Target.
• 16:20
  The difference.
• 16:22
  Different.
• 16:22
  Different stores have different things.
• 16:24
  Like Target, for example.
• 16:25
  Um, if Target's own price drops within 14 days, they'll actually give you a refund.
• 16:31
  Best Buy refunds the difference.
• 16:33
  If the price drops inside your return window, which is 15 days, Walmart is the one to be careful with.
• 16:38
  It will not refund on an online price drop.
• 16:41
  So just be aware what stores you're working with.
• 16:44
  But like Dutchess said in the comments, there's no harm in asking to honor a price.
• 16:48
  Yeah.
• 16:49
  I mean, absolutely not.
• 16:50
  I'm a firm believer that everything in life is a negotiation.
• 16:54
  Yeah.
• 16:55
  Some people don't like it when I say that.
• 16:56
  My wife sometimes gets so frustrated with me.
• 16:58
  She's like, why do you have to argue about everything?
• 17:00
  Why do you have to try to have a negotiation on everything?
• 17:04
  I said, because if you don't ask, you won't get it for sure.
• 17:07
  Well, let me say something about that, which.
• 17:09
  Because I do agree a lot of things in life are open for negotiation.
• 17:13
  I think the part where I'm like, oh, well, if we're traveling to a place and your currency is stronger.
• 17:19
  Right.
• 17:19
  Do you have to negotiate?
• 17:20
  You can, but do you have to?
• 17:22
  Should you?
• 17:22
  I don't know.
• 17:23
  That's where I think the lines get blurred a little bit.
• 17:26
  Yeah.
• 17:26
  I noticed that when we traveled to Germany.
• 17:28
  Actually, as an American, I could actually pay with American currency.
• 17:31
  And it seemed like I was getting a better deal than if I was paying with the German currency.
• 17:36
  But of course, maybe they were wiser than I was and they were like, you idiot American, we're going to rip you off.
• 17:40
  But I'm not sure.
• 17:42
  Yeah, so we were talking about credit a little while ago.
• 17:45
  When's the last time you actually looked at your credit score?
• 17:48
  Most people avoid it, and it's not because they don't care about their credit score, because they're scared of the number.
• 17:54
  But here's the thing, and I've mentioned this on the show before, the Federal Trade Commission found one in four people have an error on their credit report, which means that people are overpaying loans because of mistake.
• 18:05
  That isn't actually their mistake.
• 18:07
  And you can never dispute it when you won't look at it.
• 18:09
  We talked about that the other day when we talked about credit cards or credit scores.
• 18:13
  Well, WalletHub is free.
• 18:15
  It updates daily and it tells you what's dragging your number down.
• 18:18
  If you want to find out more information about WalletHub, go to becoming financiallyconfident.com Wallet Again, that's becomingfinanciallyconfident.com Wallet.
• 18:28
  And check it out and be aware of what your credit score is.
• 18:36
  So this week's money move, we talked about opening a separate high yield savings account and to set up one automatic transfer timed to your actually money getting paid.
• 18:45
  So, Juliet, what do you think about this one this week?
• 18:49
  I'm a first.
• 18:49
  Throw it in the chat.
• 18:50
  Like, did you guys also do this money move with me this week?
• 18:54
  I will say I successfully did it.
• 18:56
  I finished it about 10 minutes before the show.
• 18:59
  It was actually super easy.
• 19:02
  Yeah, I said I set right now.
• 19:04
  I set up right now.
• 19:09
  I set up a $10 automatic transfer every two weeks.
• 19:12
  And then I think I talked about this yesterday where, you know, every.
• 19:16
  Every so often as my income.
• 19:17
  My income is a little bit irregular right now, but as it gets a lot more mainstream, hopefully or regular hopefully, I will be revisiting this and then start playing around with the amount of money and then I'll start
• 19:28
  rethinking what my entire, like, savings investment strategy is.
• 19:33
  So let me ask you this.
• 19:34
  What was the honest first friction point in this whole thing this week?
• 19:40
  Well, I just think it's like, you know, personal finance is a very.
• 19:44
  It feels like a chore.
• 19:45
  It definitely feels like a chore.
• 19:46
  Like if you are practicing that muscle at first, it feels like a chore.
• 19:51
  And so my whole thing is like, oh, I just want to procrastinate on this.
• 19:56
  But then after, like going through the process, literally it took less than three minutes.
• 20:00
  And I did it on my mobile banking app, which I will say I never got really into the mobile banking app since a couple of years ago.
• 20:08
  But then once I did it, I was like, oh, now I don't have to worry about it.
• 20:10
  And I know $10, I could definitely do that.
• 20:13
  I'll just revisit it later.
• 20:14
  And so now all I have to do is pencil in my calendar when to go revisit this.
• 20:18
  Nice.
• 20:19
  Yeah, I think come in.
• 20:20
  The friction points that I've seen is the ID verification, but it sounds like you work with the same.
• 20:25
  So you were able to just open up another account sometimes when you're opening up with another bank.
• 20:29
  You gotta do some ID verification.
• 20:31
  You may have to scan a copy of your driver's license.
• 20:34
  Sometimes the first transfer, they make you wait a little bit of time.
• 20:38
  But just this is one of those things where building that behavioral mechanism is what exactly.
• 20:44
  What I think Juliet was saying is once you do it and $10 counts.
• 20:48
  Yeah.
• 20:48
  You know, it's going to be something that's going to help you.
• 20:51
  I see Dutchess put in there, I do need to set up the auto transfer for the savings.
• 20:55
  Yeah, I encourage you to do that, Dutch, even if it's a small amount, because you're building that muscle.
• 20:59
  I know.
• 21:00
  Dutchess and I, we talk on Facebook.
• 21:01
  Dutchess is a early a.m.
• 21:04
  exercise person and she made a comment this morning about keeping it going.
• 21:07
  I don't want to quote it exactly, but as I said to her, I said it's one step at a time.
• 21:11
  It's getting a little stronger every day.
• 21:13
  And that's what this does, too.
• 21:14
  So I really feel like this is a good one.
• 21:17
  Next week we're going to have another one.
• 21:18
  So make sure you join us next week.
• 21:19
  We'll talk about next week's money move.
• 21:21
  I will say that I did $10 because.
• 21:24
  Because of the irregularity.
• 21:25
  That's what I feel comfortable with.
• 21:27
  Right.
• 21:27
  It is small and my goal is to increase it and all of that.
• 21:31
  So it's not like when you're opening your high yield savings account and putting money in, you can start with a manageable amount for you.
• 21:39
  You don't have to shoot for the 200 every single two weeks.
• 21:42
  Like if you don't have that, if you don't feel comfortable with that, anything is better than zero.
• 21:47
  Yeah.
• 21:47
  Think about it.
• 21:47
  What Juliet is doing.
• 21:48
  She's building margin at $10 every two weeks is $260 a year.
• 21:55
  That's margin.
• 21:56
  If something pops up.
• 21:57
  Exactly.
• 21:58
  Plus you're going to earn interest on it.
• 21:59
  So it doesn't matter if it's a dollar, $5, $10, $20.
• 22:05
  Because here's what happens.
• 22:06
  Mentally, you start to realize, I am good with money.
• 22:10
  I can do smart things.
• 22:12
  I can make better decisions.
• 22:14
  And those little things that you start with just become the things that build upon and build upon.
• 22:18
  Because what you're going to find, especially if you set up the automatic, you're never going to miss the money.
• 22:22
  You're not even going to notice that it's gone.
• 22:24
  And then you're going to revisit it and you're going to go, you know what I could probably do $20 every other pay or I could do something different.
• 22:30
  So I really think this is a great way to start.
• 22:32
  But thank you for participating and let's see if we have any more comments in the.
• 22:37
  Yeah, I mean, the auto transfer, to me, Dutch, is really the key though, because if you have to go think about it, most of us, we're going to find a reason not to do it.
• 22:44
  It's a busy day.
• 22:46
  Oh, that $20 or that $10, I could use it over here.
• 22:49
  But when you set it up automatic, I just think you start living in the reality of what you've already created.
• 22:54
  Exactly.
• 22:56
  Well, let's think about this for a second.
• 22:58
  You sold $32,000 of a product last year and you cleared $4,000.
• 23:03
  See, I've done that tax return more than once.
• 23:06
  Most of the time it's not the product that you're selling, it's the shipping costs.
• 23:11
  So this is really an issue for people who are doing those side hustles who are selling products.
• 23:16
  If you're using retail rates to ship stuff, it's costing you money.
• 23:21
  And that's why we have an affiliate relationship with a company called Shipstation.
• 23:25
  Shipstation prints the label at your kitchen table at the rate you can't get standing at the counter.
• 23:30
  And here's the best part of this.
• 23:32
  You get 30 days for free, no credit card, and then $14.99 a month.
• 23:36
  If you're interested in finding out more information about Shipstation, go to becoming financially confident.
• 23:44
  I'm being very careful when I say that because you could get that messed up.
• 23:47
  But again, that's becoming financially confident.com shipstation.
• 24:00
  So it is Friday, which means we are going to look and see what we have in our community mailbag, voicemails, emails, whatever came in this week.
• 24:09
  Remember our house rules.
• 24:10
  No question is off limits and nobody gets judged for what they're where they're at right now or what they did not know.
• 24:16
  Very good.
• 24:16
  So let me go ahead and play the first voicemail we got and then we'll talk about it and I'll give you some comments and Juliet will ask some questions and comments as well.
• 24:24
  Hey, Ralph, I had a financial question for you.
• 24:27
  I have three credit cards.
• 24:29
  I've heard that if you pay one of those off and then use the balance of what you were paying or the monthly payment that you were paying on the lowest one after it's paid off to pay the next
• 24:40
  one and then the next one so on.
• 24:43
  I've heard that was a good idea.
• 24:45
  Would that be a better idea, or would it be a better idea to maybe get like a personal loan and pay them all off at one time?
• 24:54
  That's a great question.
• 24:55
  What do you think, Julia?
• 24:55
  What's your, what's your initial reaction as the non accountant in the room?
• 25:00
  Oh, so my reaction is I want, I want to avoid personal loan as much as possible.
• 25:06
  Like, if I can do it just paying off the credit card, have a strategy to do that, then I would do that instead.
• 25:13
  I guess the personal loan.
• 25:15
  The only reason why I would ever think about a personal loan is like, oh, I just want to speed up.
• 25:20
  And I really have a plan in place.
• 25:23
  But that's my initial reaction.
• 25:25
  Ralph, can you give us a little bit more structure and, like, give people what options to think about when they're thinking about this?
• 25:30
  Sure.
• 25:30
  And I think the feeling here is one that want to capitalize on.
• 25:34
  Because this.
• 25:35
  And this fellow didn't leave his name.
• 25:36
  But the caller, what I felt here is he could see that there was progress.
• 25:41
  And it's like, oh, once I get that first one paid off, then I'll go pay the second one.
• 25:44
  Then I go, what we're really talking about here is either the snowball method or the avalanche method.
• 25:49
  Those are the two methods we've talked about on the show before.
• 25:52
  Snowball, meaning, you know, you go and you find the first one that's got the lowest bounce, you pay that one off first, and then you take the second one with the money you saved on the first one and
• 26:02
  put it to the second one and so on and so forth.
• 26:04
  Avalanche is where you go find the one with the highest interest rate first.
• 26:08
  You pay that one first.
• 26:09
  That's the more mathematically correct one from an empirical standpoint.
• 26:13
  But what I hear this caller saying is they want to feel that momentum.
• 26:19
  And so if your goal is to feel that momentum, I would do exactly what you said.
• 26:24
  Find the one that's the smallest first, pay it off, then take the money now, pay all the minimum payments on everything else.
• 26:30
  Don't forget to miss, don't, don't stop paying those because that'll wreck your credit.
• 26:33
  Right.
• 26:33
  But take the money that you're not paying on card A and shift it to card B.
• 26:38
  Then do the same thing.
• 26:39
  And what you're going to do is you're going to build up that muscle we talked about.
• 26:41
  You're going to build up that momentum.
• 26:42
  The problem with the avalanche method is sometimes people get stuck because most of the time, the one with the biggest balance sometimes has the highest interest Rate as well.
• 26:52
  So you might have to pay for a year on that one.
• 26:54
  And you just feel like you're not getting anywhere.
• 26:57
  That's why, mentally.
• 26:59
  And listen, I'm an accountant mentally.
• 27:00
  I like that method where you're taking the smallest balance first.
• 27:04
  Knock it out.
• 27:05
  Knock it out and put some visuals for yourself.
• 27:08
  I like the idea of putting, like, a picture, you know, maybe a graph on your refrigerator and coloring it in as you go, as you knock out that debt.
• 27:15
  Because a lot of what we talk about in finance is mental.
• 27:19
  It's a feeling.
• 27:21
  It's this emotional side of this.
• 27:23
  Now, as far as getting a personal loan, I think I talked about this the other day on this show.
• 27:27
  My concern with getting a personal loan is, are you then going to go charge up that credit card again?
• 27:33
  That's what I worry about, a personal loan.
• 27:35
  The thing I like about a personal loan is it's going to give you a fixed number of payments.
• 27:39
  You can't negotiate down to the minimum payment if you have to.
• 27:43
  That's the benefit of that.
• 27:45
  Again, it comes down to where you are in your financial journey.
• 27:48
  Remember, like I said, this is a journey, and everybody's going to feel a little bit different about it.
• 27:52
  But the good news about this is I think this caller is seeing the light at the end of the tunnel, and he's seeing how a little bit of effort here leads to a little bit more effort.
• 28:01
  Leads to a little bit more effort.
• 28:03
  You know, when you were talking, I just had this visual come through my head where if I had a lot of debt or loans or something that I'm trying to pay off, I think personally I would want to
• 28:15
  see it visually because then I would be like, ooh, I can see.
• 28:19
  So, like, what I mean is this person said they had three credit cards.
• 28:23
  I would be like, I want to put all the three credit cards, all my existing balance, and then try to identify how much am I spending every single month, right?
• 28:30
  And then I want to visualize it so I can see, okay, if I.
• 28:36
  If I should do Snowball or if I should do Avalanche, and then see how.
• 28:39
  How the graph moves as I make my decisions.
• 28:42
  And that would probably just motivate me a little bit more, which, ooh, I might do that just for fun.
• 28:47
  I don't know.
• 28:48
  I think that's a great idea because I think the visualization is a really important tool for a lot of us.
• 28:54
  And if we see that, and that's why I said it might seem silly, but build something you can look at every day and Say, here's why I'm saving.
• 29:01
  Here's why I'm deciding not to do this, because I can see the value of what's going on here.
• 29:06
  I think it's really important.
• 29:08
  Yeah.
• 29:16
  Well, we got another voicemail, and this one, I'm going to warn you ahead of time.
• 29:19
  I listen to this one.
• 29:20
  It's short and sweet, so we might play it twice, but I'm going to play it once and enjoy it.
• 29:23
  You tell me if you catch it, and then we might play it again.
• 29:26
  Okay.
• 29:27
  I'm 30 years old and have 20k in my 401k from a previous employer.
• 29:32
  Should I withdraw early?
• 29:35
  Okay, so what she's asked, I'm gonna play it one more time so everybody gets a chance to hear it.
• 29:40
  I'm 30 years old and have 20k in my 401k from a previous employer.
• 29:45
  Should I withdraw early?
• 29:48
  So what she's saying is she's 30 years old.
• 29:52
  She has $20,000 in a 401k plan from a former employer.
• 29:57
  So this is somebody she worked for in the past.
• 30:01
  And what she's asking, and this is a question I get routinely, Ralph, what do I do about that money?
• 30:08
  Because what usually happens is you leave an employer and they send you a letter and they say, hey, and yes, by the way, Dutchess, you should call.
• 30:16
  That'd be great.
• 30:17
  Dutchy just put a comment in there.
• 30:18
  I should call.
• 30:19
  We would love the questions.
• 30:20
  We love the phone calls.
• 30:21
  And I'll spill a little beans here.
• 30:23
  We're actually going to be talking about going live with live phone calls here in just a couple weeks.
• 30:28
  So we'll be talking more about that soon, where we're going to open the doors for live phone calls.
• 30:32
  But anyway, what I was saying is a lot of people get this letter.
• 30:36
  My son actually got this letter.
• 30:37
  My youngest son, he had worked at Lowe's, the home improvement place, and he decided to go become a barber.
• 30:42
  So he went to another job.
• 30:43
  And I remember he gets this letter, and he says, Dad, I have $1,800 in my retirement account.
• 30:49
  Now, this lady's got.
• 30:50
  I think she said 20,000.
• 30:51
  20,000, yeah.
• 30:53
  And he says, dad, what should I do with this?
• 30:55
  And I said, well, here's your options.
• 30:58
  Lowe's is telling you that you can't keep it there.
• 31:00
  So that's one option.
• 31:01
  Number one is some companies will allow you to keep the money where it is.
• 31:07
  You're in their plan.
• 31:08
  You're in whatever that is.
• 31:10
  Now, the problem is you don't work there anymore.
• 31:12
  So if the investments are something you don't have control over, that might not be a great plan.
• 31:15
  So that's option.
• 31:17
  If they don't allow you to do that, you really have two options, actually three options.
• 31:22
  One option is if your current business or your current employer allows you to roll money From a previous 401k into your current 401k, you can do that.
• 31:32
  It's what's called a trustee to trustee transfer.
• 31:35
  You can contact the old company, you get the information for the new company and you basically take them and they send their bucket of money to your new 401k company.
• 31:44
  New bucket of money.
• 31:45
  So old bucket to the new bucket.
• 31:47
  So that's an option.
• 31:48
  Another thing you can do is you can take the money and you can distribute it and put it into your own IRA account.
• 31:55
  Right.
• 31:56
  Both of those things do not trigger any tax consequence because you're keeping the money pre tax.
• 32:02
  That's what we're talking about here.
• 32:03
  So money in a 401k is pre tax money.
• 32:06
  And as long as you keep it in a pre tax account, whether that be an Iraq or your new 401k, there's no tax consequence.
• 32:14
  But what this person is saying was, what if I just take the money out?
• 32:18
  What that's going to mean is.
• 32:20
  Yeah, and if you can't see the visuals, Juliet, I'm shaking my head.
• 32:24
  She shook her head and I get it.
• 32:26
  And here's what we're talking about.
• 32:27
  If you take the money out, if you take the money out, you're going to pay tax on that.
• 32:32
  It's what's called so much tax.
• 32:33
  Ordinary income.
• 32:34
  It could be a lot.
• 32:35
  Plus, here's the part a lot of people don't talk about.
• 32:38
  There's also a 10% penalty if you take it out before you're 59 and a half years old.
• 32:43
  I know that's an obscure date, but that's what it is.
• 32:46
  The IRS code says if you take out money from a, from a retirement account that's pre tax before you're 59 and a half, not only do you pay tax on it, but you pay a 10% penalty.
• 32:55
  Now, there are exceptions.
• 32:56
  I'm not going to get into those today.
• 32:58
  It's probably for a good deep dive show.
• 33:00
  We could talk about that.
• 33:00
  There are some exceptions for education and for your buying your first home that you can waive the penalty, but you can never waive the tax.
• 33:08
  Right?
• 33:09
  Here's what I tell everybody.
• 33:10
  You're going to lose about 40% of whatever you're taking out in tax.
• 33:17
  Yeah.
• 33:17
  That's crazy.
• 33:18
  So that's a big deal.
• 33:19
  Now with my son who came to me and said, dad, I have seventeen hundred dollars in this.
• 33:24
  I said to him, I said, here's your options.
• 33:26
  He didn't have a new 401k.
• 33:27
  I said, you can put the money into an IRA.
• 33:29
  I knew my son wasn't going to do that.
• 33:31
  He wasn't going to take the time to go set up the account.
• 33:33
  And Honestly, he was 23 at the time.
• 33:36
  I said, take the money, pay the tax and put it into your emergency savings account.
• 33:42
  So for him, the amount of money, it made sense to do that.
• 33:44
  Sure, he lost some money, but it wasn't as dramatic for him because he was in a lower tax bracket.
• 33:49
  So he had to pay 12% federal tax and 10% state and an 8%, excuse me, 12% state, 10% penalty and 8% states.
• 33:56
  He paid about 30%.
• 33:58
  So he did take a haircut.
• 33:59
  It's kind of funny.
• 34:00
  He's a barber now, so he took a haircut.
• 34:02
  But in his case, it made sense.
• 34:05
  For most people though.
• 34:07
  It doesn't make sense because of that.
• 34:09
  And I've even had people say to me, but Ralph, I'm paying a lot on credit cards.
• 34:13
  I get that.
• 34:14
  But if you're going to lose 40% right from the jump, I don't know of too many credit cards that are charging you 40% interest.
• 34:24
  Right.
• 34:24
  So I am not a huge fan of taking.
• 34:26
  No.
• 34:26
  And that's what you think about.
• 34:27
  But the bigger thing, and this person didn't ask about this, if you leave an employer, don't forget about those things.
• 34:34
  Don't forget about that retirement account that you have.
• 34:36
  Because so many people walk away.
• 34:38
  We talked about that unclaimed money a couple weeks ago.
• 34:40
  I think it was two weeks ago.
• 34:42
  I can't believe it's been that far.
• 34:43
  But that's the thing to be intentional about.
• 34:46
  Yeah.
• 34:46
  So just be.
• 34:48
  I will say I have to double check on my unclaimed money because I've had so many previous employers had to do a bunch of 401k rolling.
• 34:56
  It's hard to keep it up.
• 34:57
  And this is why it's like so important when to have like a spreadsheet of something where you're like, I have talked to this person, I have talked to this, you know, account holder, this account holder or not account
• 35:07
  holder.
• 35:08
  But like, and you know what I'm talking about, like whatever institutions that you have to talk to.
• 35:12
  Right.
• 35:13
  And then do follow ups.
• 35:14
  So I think I have one that's still floating around that I have to chase down.
• 35:18
  So, yeah, I just pay attention.
• 35:20
  Pay attention to what you have.
• 35:21
  I mean, that's the whole thing to this.
• 35:23
  And then make an informed decision.
• 35:25
  It's not hard to set up an IRA account, most of the banks.
• 35:29
  And actually there's a question that we got one question we, I think we have time for, Juliet, if you want to read question one.
• 35:35
  Because it kind of is going to go along with what I was talking about here.
• 35:38
  If you want, I can read it too.
• 35:39
  It's up to you.
• 35:40
  Oh, I'll read it.
• 35:41
  Okay.
• 35:41
  Because this one's kind of short.
• 35:42
  Is an online only bank actually safe?
• 35:45
  That's the one you're talking about, right?
• 35:46
  Yeah.
• 35:46
  So this.
• 35:47
  And it kind of goes along with what I was talking about here.
• 35:50
  This question came in from somebody that said, Ralph, I see all these advertisements because especially when you're talking about high yield savings accounts and we were talking about doing these things.
• 35:58
  Is, Is an online bank actually safe?
• 36:01
  Because there are a lot of places now that you don't see like a, what we would call brick and mortar banks.
• 36:06
  You know, down the road, First national bank, that's kind of changing.
• 36:10
  Here's the couple things you need to be paying attention to.
• 36:13
  And it's funny, I was just talking to the pastor of my church.
• 36:15
  We had a meeting, we have a meeting every Friday morning and we're trying to figure out what to do with some excess money.
• 36:20
  And I said, you know, the bank that you're in is paying 0.3% on the savings account.
• 36:25
  I said, most banks right now are paying at least 3%.
• 36:30
  So he says, well, how can we be sure it's safe?
• 36:32
  Here's how you can be sure it's safe.
• 36:34
  If a bank is FDIC insured, you can go double check this on the FDIC website.
• 36:41
  On the bank website.
• 36:42
  Now, don't always trust the bank website because there are people out there put fake stuff out there.
• 36:46
  But go to fdic, look up the bank.
• 36:50
  If they are a FDIC regulated bank, which means there's regulators that go check on them, you are safe and insured up to $250,000 per depositor, per insured bank, per ownership category.
• 37:05
  I know that sounds kind of silly, but what I'm really saying.
• 37:09
  Yes.
• 37:09
  So if you do a bank find@fdic.gov it takes less than a minute.
• 37:14
  These online banks are sometimes better deals because they don't have the infrastructure cost, they don't have the brick and mortar cost, they don't have all the branch system.
• 37:23
  So sometimes they're actually able to.
• 37:26
  I'll give you an example.
• 37:27
  Like Ally bank is one that I do high yield savings account with.
• 37:30
  They probably have swap is Charles Schwab.
• 37:33
  Is more of an investment company.
• 37:35
  They're more of an investment house.
• 37:37
  And they actually do have physical presence.
• 37:39
  But there are banks out there right now that are paying great rates that are not physically.
• 37:43
  And I get to fear.
• 37:44
  Right, because you're thinking, well, this could go away.
• 37:47
  Like I could try to log into their website and they're gone.
• 37:50
  If it's an FDIC insured bank, unless the whole banking system collapses, unless the entire US government decides that they are defunct, you're fine, you're safe.
• 38:06
  Yeah.
• 38:07
  You're insured of the $250,000.
• 38:10
  Now that doesn't mean that there can't be hassles.
• 38:12
  That doesn't mean that you might have a time when, if the bank fails that you're going to have to wait for the FDIC to come in and swoop down and figure those out.
• 38:20
  Right.
• 38:21
  Here's the thing to be careful of though.
• 38:23
  Some investment companies look like banks.
• 38:28
  If it doesn't say FDIC insured, If you go out there and look that up on the website, like I said fdic.gov and you don't find them, they may not be a FDIC insured bank.
• 38:40
  There are apps out there right now that are trying to get people to give them money that they're going to lend out that are not FDIC insured banks.
• 38:49
  So just be aware of that.
• 38:51
  This is a big deal.
• 38:52
  And the reason I brought that up here is if you are in that position like the lady who called in and you don't have an IRA account, oftentimes you can go find one of these online banks and create
• 39:04
  an IRA account and then you can do a party to party transfer.
• 39:08
  Now let me define what that means because somebody probably said, what are you talking about, Ralph?
• 39:11
  Yeah, yeah.
• 39:12
  What they do is they actually wire the money from company A to company B.
• 39:18
  Yes.
• 39:19
  You can also have them send you a check.
• 39:22
  But here's the problem.
• 39:23
  If they send you a check, oh,.
• 39:25
  I don't like the doing the check style.
• 39:26
  Yeah, I know.
• 39:26
  But some people just like that physical thing, right?
• 39:29
  Yeah.
• 39:29
  If they send you a check, you have 60 days, six zero to make sure that you take that money and deposit it into the IRA account.
• 39:41
  I've had clients that have got the check and then life happens and they forgot about it.
• 39:46
  And then they get this 60 day.
• 39:48
  Then they get to 65 days, 75 days, and they call me in a panic and they say, ralph, oh, I totally forgot about this.
• 39:54
  It was only a couple thousand dollars and I had this old bank account or this old job and I got the ira.
• 40:00
  They sent me the check, but I totally forgot to put it into the ira.
• 40:05
  This is a hard and fast rule, so don't miss that.
• 40:08
  And that's why I love the, what they call the trustee to trustee transfer.
• 40:11
  Because you can't make a mistake with that.
• 40:13
  Yeah, I will say, because I've done a couple of these, I have always bypassed that check stage and just did the trustee to trustee.
• 40:21
  And then I always try to make sure to call the, the institution where my money is at.
• 40:27
  Right.
• 40:27
  Like, so if I'm rolling it into Fidelity, then I'm not, I'm not calling Fidelity, I'm calling the institution that I'm at.
• 40:32
  And I'm like, hey, walk me through these forms because I'm about to fill them.
• 40:36
  I just want to make sure I'm not screwing anything up.
• 40:38
  And it's usually like a day's, not a day's worth, but like maybe 30 minutes worth of work.
• 40:45
  And then it's pretty easy.
• 40:46
  It's a couple of phone calls.
• 40:47
  But, you know, this is your hard earned money and you want to make sure you do it right.
• 40:49
  I act this same situation.
• 40:51
  We have a 401k plan here at my office and we changed the whole 401k plan so we had to roll from one to the other.
• 40:57
  So I went to the current investment advisor and said, here's what I'm getting ready to do.
• 41:01
  Went to the new one.
• 41:02
  I said, what is the paperwork?
• 41:03
  It took a couple days.
• 41:05
  They negotiated back and forth.
• 41:06
  It was a bit of a hassle, but in the end, everything's in one bucket, which is a great thing.
• 41:11
  Yes.
• 41:13
  Did you know 70% of people don't have a will?
• 41:16
  And I think about that for a second.
• 41:18
  70%.
• 41:19
  Probably a lot of people that are watching and listen right now.
• 41:22
  And it's not because you don't want to have one, you just never got around to it.
• 41:26
  But there's a cost by not getting around to it.
• 41:29
  The cost are things like probate court or a judge who's never met your family deciding who gets what and when you pass away.
• 41:37
  And listen, we all got a date with that.
• 41:39
  Without a will, everybody's guessing.
• 41:41
  But Easywill and Trust handles it online in just one sitting.
• 41:45
  For $149, they'll give you an Attorney reviewed account system and they are built for your state's laws.
• 41:53
  So go to becomingfinanciallyconfident.com easywill take a look at this.
• 41:59
  It's really a great product.
• 42:00
  It's becoming financially confident.com easyweel I'm not an attorney, but these documents are reviewed by an attorney so you make sure they're set up for your particular state.
• 42:18
  Right now we are going to go take a look at your auto insurance bill.
• 42:22
  Almost everybody who owns a car has to pay one of these, but almost nobody reads it.
• 42:27
  And I am one of those people.
• 42:28
  Well, you better have insurance if you have a car because that could be a problem.
• 42:33
  Yes, I just, I just never read it.
• 42:35
  I'm just like, I assume you're, you know, all the standard legalese, all that stuff.
• 42:40
  But this is why we have the segment, right?
• 42:42
  We're just going to break it down, talk about it.
• 42:44
  So go get yours.
• 42:45
  It is called the declarations page or the deck page.
• 42:48
  It is a one page summary that comes with every renewal every 6 to 12 months.
• 42:53
  If you have it in an app, it is, you can pull it up there and follow along because we're going to look at three numbers off of it.
• 43:00
  Okay, Ralph, walk us through.
• 43:02
  Yeah, so a couple of things we want to talk about here.
• 43:04
  A lot of people pay these things for years, but have never actually looked at the declaration page.
• 43:11
  It's not like the, you know, it's a declaration of what the insurance company is going to provide you for what you're paying for.
• 43:17
  It's a big deal.
• 43:20
  There's slash numbers on there.
• 43:22
  There's deductible versus premium.
• 43:23
  So let me break it down.
• 43:24
  What three numbers that you really need to look at?
• 43:27
  So if you're looking at your declaration page or if you're going to go look at it later, the first number is what's called the liability limits.
• 43:33
  And that's the number you're going to usually see a slash with.
• 43:36
  So for example, it might say 25,000, 50,000.
• 43:41
  What that means is that $25,000 per person for a claim and $50,000 per accident.
• 43:50
  So what that basically means let's say you're in a car accident, right?
• 43:53
  And you are in a car accident and the car that you hit or hit you has two people in the car.
• 44:00
  Right.
• 44:01
  Basically what this is saying is your Insurance will pay $25,000 per person, but the max it will pay is $50,000 per accident.
• 44:11
  Now you might be saying, ralph, who cares?
• 44:14
  A lot of people don't know this about insurance.
• 44:16
  If your insurance is exhausted, they can come after you for the difference.
• 44:21
  So you might have auto insurance, but you only have a limit of 25, 50.
• 44:27
  So you are going to have to figure that out because the maximum is 50,000.
• 44:33
  So let's just say somebody gets hurt, but then your car is totaled.
• 44:36
  The maximum they're going to pay is $50,000.
• 44:40
  So that's one of those numbers where a lot of people like to keep that number low because it reduces your premium.
• 44:45
  Right, but you know how much cars cost.
• 44:48
  You know how much injuries cost, Right.
• 44:51
  Most people never been told that because all you hear is, okay, what's the minimum limits for my state?
• 44:56
  Listen, when I was.
• 44:57
  When I was young, that's the way I shopped insurance.
• 44:59
  What is the state minimum that I have to have so that I don't get locked up for driving without insurance and the people don't come after me?
• 45:06
  So that's the first one.
• 45:08
  Do you have any questions on that one, Juliet?
• 45:10
  So I'm just trying to make it easier for my brain to remember this.
• 45:14
  So it's whichever comes first.
• 45:17
  Is that fair?
• 45:18
  Basically, the slash means per person, and then the other side of the slash is for the total of that particular accident.
• 45:28
  Got it, Got it, got it.
• 45:29
  Okay, great.
• 45:30
  I'm good.
• 45:31
  Here's the second number that you need to pay attention to.
• 45:34
  We got a couple of these, the deductibles.
• 45:36
  And there's usually two separate deductibles.
• 45:39
  There's a comprehensive deductible and a collision deductible.
• 45:42
  Most people have these between $100 and $1,000.
• 45:47
  What is a deductible, Ralph?
• 45:48
  A deductible is what you pay before the insurer pays anything.
• 45:53
  So if you're in an accident, if Your deductible is $1,000 before the insurance company pays anybody a dime, you're going to have to pony up $1,000.
• 46:04
  Right.
• 46:05
  The way that it works with premiums is the higher the deductible lowers your premium, but it raises the amount you owe on the worst day.
• 46:13
  Another I threw my youngest son under the bus again.
• 46:16
  When he first started driving, he started driving a little later.
• 46:20
  And because he started driving a little later, his premiums were higher because he was a new driver.
• 46:25
  Right.
• 46:25
  When he went out to get insurance, he calls me and he's like, dad, these numbers are ridiculous.
• 46:30
  But the guy on the phone said that I can make my deductible higher.
• 46:34
  And I said, well, what did you do?
• 46:35
  He says, I made My deductible higher.
• 46:38
  And I said, well, how much is your deductible?
• 46:40
  He said, the guy said, I could do $2,500.
• 46:44
  And I said, sure, you can do that.
• 46:45
  I said, but did he explain to you what that means?
• 46:48
  He goes, no, I just figured it'd be cheaper insurance.
• 46:51
  I said, here's what that means, son.
• 46:53
  When you have an accident or somebody hit you or it could be totally not your fault.
• 46:57
  Right?
• 46:57
  Right.
• 46:58
  You've got to have $2,500 in an account so that you can pay this.
• 47:02
  So I said to him, I said, I'm cool with you doing that.
• 47:05
  But what you need to understand is you better have that emergency Savings account with $2,500 in it, because here's the problem.
• 47:11
  You get in a wreck even if it wasn't your fault.
• 47:13
  Right.
• 47:14
  Your car sitting in the auto shop until you can pony up $2,500.
• 47:18
  I think this is such a good reminder is like, as you're thinking about your emergency savings and all of that, take a look at what all of your deductibles for.
• 47:27
  Not just car insurance, but health insurance.
• 47:29
  Things are just tying together in my brain now, Ralph.
• 47:32
  Yeah.
• 47:32
  And you have to also look at does it really have a dramatic effect if you go between 100 or 500 or 1000?
• 47:39
  What I have found is sometimes it's pennies or it's a couple dollars.
• 47:44
  Here's another thing a lot of people don't tell you.
• 47:46
  Talk to your lender.
• 47:48
  If you have a car loan, many lenders require you to have at least this much in deductible.
• 47:55
  My son didn't have a lender, but then he went out and bought a new truck and he had a lender for that.
• 48:02
  And the lender says, oh, no, $2,500 is not acceptable.
• 48:07
  The lender actually requires him to have no more than $1,000 deductible.
• 48:13
  Oh, wait, so that's when your son was buying a new car.
• 48:17
  Right.
• 48:17
  Or a used car.
• 48:18
  If there's a loan against the car.
• 48:21
  If there's a loan on the vehicle, the lender can say the maximum deductible.
• 48:26
  Because here's a lender can do two things.
• 48:27
  The lender can make sure you have insurance because they want to get paid if you get in an accident or somebody hits you.
• 48:32
  Right?
• 48:33
  Right.
• 48:33
  Number two thing, they can.
• 48:34
  They can also.
• 48:35
  They can do three things, actually.
• 48:37
  Second thing, they can say, what is the minimum coverage you have to have?
• 48:39
  Whether it's 2550, 100, 200, as far as the liability, the third thing they can tell you is the maximum deductible is no more than X.
• 48:48
  What I have seen, most lenders are between 500 and 1000.
• 48:52
  Once you go over a thousand, the lender's like, no.
• 48:54
  And here's what happens if that happens.
• 48:56
  The lender gets a little report card from the insurance company.
• 49:01
  The insurance company will send a postcard and says, hey, this particular driver that you have a loan for, because they're going to register with each other, change their deductible and then what happens?
• 49:14
  The lender is going to reach out to you and say, Juliet, hey, we love having you as a customer, but we got a problem here.
• 49:18
  Yeah.
• 49:19
  When you signed a contract for us to lend you money for the car loan, you agreed that you would make your deductible no more than $500.
• 49:25
  Right.
• 49:26
  And we just found out it's now $2,000.
• 49:30
  So you have two choices, Juliet.
• 49:32
  You can either go back to your insurance company and fix this or we're going to do something called forced placed insurance.
• 49:38
  Forced placed insurance is the lender actually goes out and buys a policy that is not for your benefit and they charge you for it.
• 49:47
  In that case, if I get like a forced placed insurance, does that mean I have two insurances?
• 49:51
  Well, you don't have two insurances.
• 49:53
  The lender has bought insurance to make sure they're covered.
• 49:57
  Correct.
• 49:58
  And they're going to charge you for it and it's going to cost five times what it will cost you.
• 50:02
  When I worked in the credit union industry, we used to do this all the time.
• 50:05
  If we had a member who wasn't paying their insurance, we would force place the insurance and we would accelerate the loan and add it to it.
• 50:12
  But these numbers were brutal.
• 50:13
  Like I'm talking about thousands of dollars for coverage just for the fair market value of the vehicle.
• 50:18
  It is not to your benefit, it's the benefit to the lender.
• 50:21
  But pay attention to that.
• 50:23
  Here's the third number that's really important.
• 50:26
  What each coverage actually costs with each coverage.
• 50:31
  So on your declaration page, it's going to tell you what you're paying for each thing.
• 50:35
  In other words, like liability, comprehensive collision, um, something bodily injuries.
• 50:42
  Yeah.
• 50:42
  There's different coverages by state that are required.
• 50:46
  The thing you have to be careful of.
• 50:47
  And I use a particular insurance company, geico.
• 50:50
  And whenever I buy, and I've bought a lot of new cars, whenever I buy a new car, GEICO loves to pile onto the declaration page.
• 50:58
  They like to add in rental Car insurance, they like to add on mechanical breakdown insurance, they like to add on disability insurance, they like to add on a bunch of add ons.
• 51:09
  So like for example, the rental, it's like them saying oh, I don't know if Ralph is going to use your car to Turo, right?
• 51:17
  No, no, that's not what I'm talking about at all actually.
• 51:18
  Basically what I'm talking about is if your car is in an accident, your insurance company will re will pay you so you can go rent a car to use while your car's in this shop.
• 51:28
  Didn't mean to corre you.
• 51:29
  I hope I didn't come across the wrong way there, but that's what we're talking about because a lot of lenders just add that in.
• 51:35
  But what you realize when you look at that declaration page, you might be paying an extra $100 every six months for that.
• 51:41
  Do you really need that those things right?
• 51:43
  Well, yeah.
• 51:44
  Or just don't have it because you might not need it because maybe you're a two car family and if your car is in the shop it's not convenient but we double up or something like that.
• 51:53
  That's the situation with me.
• 51:54
  I've got three cars.
• 51:55
  So between my wife and I, even if one of the cars is in the shop, we've got another car to use.
• 52:00
  Another one they like to add recently is called mechanical breakdown insurance.
• 52:05
  And I'm going to talk about that some next week.
• 52:07
  We're actually going to.
• 52:08
  I want to spill the beans on that one.
• 52:09
  But that's one they like to add.
• 52:11
  They like to add in credit life and credit disability insurance so that if you're disabled it'll pay the loan if you have credit, if you have a death, they'll pay it.
• 52:21
  So there's a lot of little pile on things they will add onto this.
• 52:25
  And that's why it's so important to read this.
• 52:27
  And especially if you're shopping for insurance, you got to compare apples with apples.
• 52:32
  And if you go out to like State Farm that we talked about yesterday and you go to Geico and you go to Progressive, make sure you're looking at the same liability limits, make sure you're looking at the same
• 52:43
  deductible and make sure you're looking at the same coverages because you cannot compare them if you don't know that.
• 52:50
  Yeah, like if I'm shopping for insurance, do you recommend just like going onto their website or actually talking to somebody to see to make sure you are comparing apples to apples?
• 52:59
  I think it's a great idea to talk to somebody, but just be aware that they're salespeople.
• 53:03
  Yeah.
• 53:04
  And they want.
• 53:05
  And I'm fine with that.
• 53:06
  That's their job.
• 53:07
  But just be aware of that.
• 53:08
  But I ask the questions.
• 53:10
  These people are trying to earn your business.
• 53:11
  The thing about auto insurance is most people never change.
• 53:15
  Right.
• 53:15
  And the insurance companies love it because they just keep going and keep going and keep going, and you might be paying higher premiums.
• 53:21
  So this is Ralph's homework.
• 53:24
  Ralph's been with geico.
• 53:25
  I'm talking in the third person.
• 53:26
  I've really lost my mind.
• 53:27
  But anyway, I've been with the same insurance company for year upon year upon year.
• 53:31
  So I think it's time for me to shop around.
• 53:34
  Now, that said, I also have complications because I have multiple properties.
• 53:38
  I have what we talked about the other day, a umbrella policy.
• 53:42
  So I may be getting the best deal.
• 53:44
  But this is a great thing to shop around.
• 53:46
  But.
• 53:46
  But call and ask the questions and actually say to them, here's what my declaration page says.
• 53:52
  I want you to give me a quote for the exact same thing.
• 53:55
  Got it.
• 53:56
  Well, Duchess of NJ says that rental car option has come in very handy.
• 53:59
  And you got to compare apples to apples.
• 54:01
  So that's really good.
• 54:02
  Yeah, it is.
• 54:03
  And it does come in handy because what people don't understand is if you're in a wreck and you can't use your car and you don't have rental coverage on your auto insurance policy, you're paying for that rental car
• 54:14
  out of pocket.
• 54:15
  Even if it wasn't your fault in the accident, if someone hit you now, you might be able to sue them and get their insurance to pay for it.
• 54:22
  But this is one of those things if you're, you know, it's.
• 54:25
  You can be insurance poor, but sometimes insurance makes sense.
• 54:31
  Sounds good.
• 54:37
  All right, so before we get to our wins of the week, I just want to mention this.
• 54:40
  I want to encourage everybody to join us next week for our community mailbag.
• 54:44
  We're gonna have a new money move for next week, and we're gonna answer your question on the show.
• 54:47
  We've got a great week of shows planned for you, so subscribe to our channel so you don't miss it.
• 54:52
  But when I was setting up today's show, I totally forgot to push the button for wins of the week.
• 54:57
  So we are going to go.
• 54:59
  Yeah, this is.
• 55:00
  This is the fun of doing a live show because sometimes, you know, Ralph just forgets that I need to put that transition in.
• 55:07
  But let's go ahead and do our wins of the week, because that's where we are.
• 55:12
  And Juliet, since I'm looking for the slide, I'm going to let you start.
• 55:16
  I'm gonna say chat.
• 55:18
  Do you guys have any wins of the week?
• 55:19
  Please share with us.
• 55:20
  It doesn't have to be monetary.
• 55:21
  It could be like, you know, something good in your life and you feel good about it.
• 55:25
  I would say for me.
• 55:27
  Hold on one second.
• 55:28
  Hold on one second.
• 55:29
  I've got that.
• 55:39
  Okay, there we go.
• 55:40
  Yeah.
• 55:40
  So wins of the week, for me, this is gonna be, like, really, really minuscule.
• 55:46
  But I recently, I have just been really loving when I finish using up a product, because I feel like when I was younger, I would.
• 55:54
  I would have FOMO and Shopaholic, and I'll be like, oh, I just need the new thing.
• 55:59
  And I never.
• 55:59
  It's like there was at some point in my life, I was like, I don't need that many more shoes because I only have two pairs, one pair of feet.
• 56:06
  Like, I can't wear all that.
• 56:07
  So then for me, this week, I finished using up something makeup related, and I was like, oh, that feels really good.
• 56:14
  So there's that.
• 56:15
  And then I got to.
• 56:17
  I got to reconnect with a lot of friends, which is amazing.
• 56:21
  And I have a trip planned up because I'm gonna go meet one of my nephews very soon.
• 56:25
  So that's very exciting.
• 56:27
  Very cool.
• 56:27
  So you used up a product.
• 56:30
  Yeah.
• 56:30
  And it's just like, ah, I bought it.
• 56:33
  It was new.
• 56:33
  It's almost like the circle of life, the circle of a product.
• 56:36
  And then I finished using it, and I was like, I did it.
• 56:39
  I used up something that I spent my money on.
• 56:41
  So it's kind of like that toothpaste tube, right?
• 56:43
  You get all the way to the end.
• 56:45
  You squeeze it all out.
• 56:46
  So you've used it all that you spent your money on?
• 56:49
  Yeah.
• 56:49
  And you're like, oh, I feel satisfied.
• 56:50
  I feel good.
• 56:51
  That's a good thing.
• 56:53
  Yeah.
• 56:53
  What about you?
• 56:55
  So let's see.
• 56:55
  Wins of the week.
• 56:56
  I'm super excited because in the next hour or so, I'm going to see my grandson.
• 57:01
  He is coming down from New York, so we are going to spend a weekend together.
• 57:04
  My oldest son and I are going to a University of Delaware football game tomorrow.
• 57:08
  I guess my big win of the week is I'm really enjoying this show.
• 57:12
  I'm really enjoying the time I'm spending with Juliet, with Abby behind the scenes, and with all of you and Duchess of NJ and the other people who have joined us.
• 57:21
  This is what I want to do, and I really appreciate every one of you because there are things that you do in life because you have to, and there's things that you do because you want to.
• 57:30
  And this is a want to for me.
• 57:31
  And you guys are making my dreams come true with this.
• 57:34
  And I mean that from my heart is one of the things that I want to do in this next chapter of my life.
• 57:38
  Because I'm not a spring chicken.
• 57:40
  Hit 54, I guess it was last week.
• 57:42
  I want to be able to do this for people to make an impact on their lives.
• 57:47
  And I want to thank every single one of you involved with this show because you're helping me be impactful to other people, and that's making me grow as a human being.
• 57:54
  So that's my win for the week,.
• 57:56
  And I'm just going to continue that.
• 57:58
  First of all, shout out to Duchess of nj, girl.
• 58:00
  I'm a shoe girly, too.
• 58:01
  Okay, we can talk about that later.
• 58:03
  I'm a shoe guy, too.
• 58:04
  You don't want to know how many pairs of shoes I have.
• 58:07
  We will talk about that one day as well.
• 58:11
  So as you guys can know, you know, the show is really early on, and we're trying to build a community, but we really want insights from you guys.
• 58:17
  Like, what do you guys want from.
• 58:19
  What do you guys need, you know, on top of just me and Ralph shooting.
• 58:26
  I don't think I can say that on air, but, you know, like, shooting the breeze.
• 58:30
  Right?
• 58:30
  Shooting the breeze.
• 58:31
  That's fair to say.
• 58:31
  On air.
• 58:32
  I got no issue with that.
• 58:35
  Yeah, but, like, what do you guys.
• 58:37
  What do you guys want?
• 58:37
  What kind of conversations do you want to see?
• 58:39
  How do you want to be in community with one another?
• 58:42
  Please let us know because we are here to make sure everybody feels financially confident, not just, you know, conversation between us.
• 58:52
  That's the goal.
• 58:53
  I mean, every day, when I think about what do I want this show to do today is to make people feel financially confident.
• 59:00
  And as I say on the show all the time, it's a journey.
• 59:03
  All of us are on this journey together.
• 59:05
  Some of us are in different places on the journey.
• 59:07
  But I can assure you, all of us are on this journey.
• 59:10
  And we're.
• 59:11
  We're not alone in that.
• 59:12
  We're all togetherness.
• 59:13
  And that's why I love this community.
• 59:14
  So thank you, Juliet.
• 59:15
  Thank you, Abby behind the scenes.
• 59:17
  Thank you, everybody who joined us.
• 59:19
  And again, that's the show for today.
• 59:21
  I'm Ralph Estepp Jr.
• 59:22
  And I'm Juliet and again, if you've got questions for the show, just like the two voicemails we got today, go to our website.
• 59:28
  It's becomingfinanciallyconfident.com you can talk about more of the stuff on the show.
• 59:33
  Make sure you join us Monday for the live show.
• 59:35
  And please invite other people to either join us live or just send them a link to the show.
• 59:41
  Because we want to grow this.
• 59:42
  We want to reach more people.
• 59:43
  Because our goal here every single day is breaking free from money.
• 59:48
  Shame.
• 59:49
  One conversation at a time.
• 59:50
  So have a great weekend.
• 59:51
  I'm gonna go spend some time with my grandson, Carson.
• 59:54
  I can't wait.
• 59:55
  Yeah.
• 59:55
  Bye, guys.