Ask HTM - Responding to a Rental App Denial, Crummy 529 Plans, and Buying Land as an Investment for Family #961
Mar 24, 2025
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Listeners get savvy advice on responding to rental application denials and the role of credit scores in securing housing. There’s a deep dive into whether state 529 plans, despite higher fees, are worth the tax breaks. The conversation also touches on purchasing land as a family investment, highlighting innovative uses for land and potential pitfalls. Plus, practical tips are shared on balancing 401k contributions with emergency funds, along with the surprising costs of cell phone bills and the benefits of affordable plans for saving money.
Engaging a certified financial planner can help individuals navigate complex financial decisions and set tailored strategies for their goals.
Maintaining a robust emergency fund is crucial, which may require balancing retirement savings contributions to ensure quick access to funds.
Investing in existing properties can be less risky than purchasing undeveloped land due to complexities like zoning and environmental challenges.
Deep dives
The Impact of Asking Questions on Financial Success
Asking the right financial questions can significantly influence one's future. A reliable partner, such as a certified financial planner (CFP), understands the importance of acting in the best interest of clients, providing valuable guidance while navigating complex financial matters. Engaging a CFP can help individuals clarify their financial goals and create tailored strategies to achieve them effectively. This proactive approach to financial planning encourages a mindset of inquiry that can lead to better decision-making and enhanced financial outcomes.
Leveraging Currently Available Financial Resources
Utilizing platforms like Airbnb can offer homeowners an effective way to generate additional income, particularly during peak travel seasons. By joining the Airbnb co-host network, individuals can access support services, including guest communications and preparation, making the hosting experience more manageable. This option not only helps homeowners offset travel costs but can also provide an ongoing passive income stream. The simplicity of setting up an Airbnb listing makes it an attractive opportunity for those looking to monetize their property.
Balancing Retirement Savings and Emergency Funds
Individuals who prioritize retirement savings must also consider the importance of maintaining a robust emergency fund. Allocating a significant portion of income to retirement accounts, such as a 401(k), can limit funds available for liquid savings, posing risks in times of financial uncertainty. Financial experts recommend finding a balance by reducing contributions to retirement plans when necessary to build a sufficient emergency fund. Maintaining quick access to liquid savings allows individuals to navigate emergency situations without relying on high-debt options like personal loans.
Investment in Land vs. Existing Properties
Purchasing land with the intent of future development carries unique risks compared to investing in existing properties. Many pitfalls, such as zoning restrictions or environmental challenges, can complicate the plans for building on undeveloped land. Existing properties may present a more secure investment since they are often already habitable and can generate rental income. When considering real estate investments, it may be wiser to opt for properties with established infrastructure rather than raw land, as this can mitigate financial uncertainties.
Reevaluating Financial Goals After Salary Increases
Experiencing a substantial salary increase often necessitates a reevaluation of financial goals and strategies. Many individuals find themselves questioning their progress towards savings targets when their income significantly changes, but it's crucial to remember that higher income can enhance financial flexibility. Rather than viewing the situation through the lens of being 'behind,' individuals should focus on how to effectively allocate new earnings towards savings and investment. Maintaining a budget that limits lifestyle inflation can allow for continued growth in net worth and greater financial stability.
Let’s dive into the week with some fresh listener questions we have lined up for you! And don't just stand on the sidelines- if you have a question you’d like us to answer, toss your voice memo our way. It only takes about 90 seconds to record and you can find a step by step guide over at HowToMoney.com/ask . Regardless of how random or bizarre you might think it is, we want to hear it!
1 - Should I dial back my 401k contributions to build up an emergency fund or can I just rely on my HELOC?
2 - How should I respond to a denial letter on a rental application I filled out?
3 - I want to purchase some land but what factors should I keep in mind as I consider this investment?
4 - Is it worth going with my state’s 529 plan for the tax break… even if the fees are much higher than average?
5 - “3x your salary saved by age 40”, is this a rule of thumb that I should go with?
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