Listen Money Matters - Free your inner financial badass. All the stuff you should know about personal finance.

At LMM we bang the drum loudly in favor of investing over saving. But are there times when it’s better to just save? We’ll find out today. We’ve gotten a lot of questions about when to invest and when to just save so we thought we would dedicate a whole show to the subject for you. One of the good things about Betterment, and why we encourage you to keep your emergency fund there is that there is no penalty for taking money out and you can have it quickly, within a few days. But an emergency fund is for emergencies.  If you’re constantly pulling money out, that’s a problem.  If your time frame of needing to access money is less than a year, that money should be kept in a savings or checking account. The Rule of 72 is a way to determine how long it will take to double your investment.  With a 7% return rate, it will take about ten years to double your money. What do you need to buy soon?  A car in two months, a house in two years?  If you need the money in that time frame, you’re better off just saving it. Unless, you have some flexibility in that time line.  The more fixed your time line, the greater the risk.  Your hard date could be the day the market crashes. If you have a big, non-monthly expense coming up, like paying for your semester, it’s not a good time to invest or even to pay down existing debt.  Outside of this scenario, paying debt almost always comes first. If you’re in a grey area, something low risk like Treasury Bonds are an option.  There is no one answer.  The decision to invest or save is based on your risk tolerance, your time frame, and a host of other factors. Show Notes Penn Dark:  A European style dark lager. Betterment:  The easy way to invest. College Info Geek:  How to save on textbooks. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you’re sick of renting, you might be considering a home purchase. After all, mortgages tend to be cheaper than paying rent — so why doesn’t everyone just stop renting and buy a home? The truth is that buying a house isn’t just a matter of paying the mortgage every month. There are all kinds of hidden costs of buying a home. Today we’ll help you sort them all out. One of the top draws to homeownership, among many, is the fact that mortgage payments are often much less expensive than rent. However, just because a mortgage payment is less than your current rent does not necessarily mean that buying a home would be cheaper. There are numerous costs to consider when deciding to buy a new home. Loan origination fee To start, there will be a loan origination fee whenever you take out a mortgage. This is what you pay the lender for doing the work involved with making the loan. Because this fee can be a large one and it is required to be paid upfront to your lender, it’s important that you figure this origination fee into your total cost calculations. Although the exact amount you pay can vary based on the amount of your mortgage loan and the specific lender with which you work, you can expect to pay between .5 percent and 1 percent of the total value of your mortgage to cover this fee. Working with a real estate agent If you choose to consult a real estate agent, you’ll have to pay that person’s fee, as well. Not all agents have your best interests at heart — the more you pay for your home, the bigger their fee. Hiring a real estate agent is not the right choice for everyone, and you should consider your specific circumstances before moving forward. If you want to minimize your home buying costs as much as possible, and you feel confident in your ability to navigate the real estate market in which you’d like to buy, you may be just fine without an agent. On the other hand, if you are not well versed in buying real estate and you are feeling a little overwhelmed by the process, it can be well worth it to work with an agent. The amount you will have to pay toward a real estate agent’s fee can be tough to calculate. In most cases, the home’s seller is on the hook to pay the fee of both his or her agent and the agent of the buyer. You will still see this fee, although it will likely be absorbed into the listing price of the home. While you won’t be able to avoid the ultimate cost, you can make sure that you get your money’s worth by working with a reputable agent. Be sure to ask for references, read reviews online and check any relevant credentials of an agent before you hire someone. Insurance fees Another one of the commonly overlooked costs associated with homeownership comes in the form of insurance fees. Renters insurance is a relatively inexpensive form of coverage that you might not even need to cover, depending on where you live.  When you purchase a home, however, you sign up for several new insurance requirements.  You will be buying lots of different kinds of insurance, including title insurance, homeowners’ insurance and (possibly) additional flood insurance. None of them are break-the-bank expensive, but they can add up in the long run. Homeowners’ insurance may cost you upwards of $1,000 annually, although this amount can be much more depending on the extent of your coverage and where you purchase your home.  As we mentioned above, you may have to spring for additional insurance coverage if you live in a flood or natural disast... Learn more about your ad choices. Visit megaphone.fm/adchoices

Deciding whether or not to have a baby is probably the biggest decision you will ever make.  Today we’ll discuss how to prepare financially for baby. Stephany Kirkpatrick from LearnVest is our guest to discuss the financial aspects of having a baby. Having a baby doesn’t have to derail your financial goals.  It does change your financial priorities.  Good bye to five star resorts and hello to camping!  To raise a child to age 18, it will cost nearly $250,000. Retirement needs to stay front and center.  There are more ways to fund a college education than there are to fund retirement. Ask around about child related expenses.  What are people paying for child care, for school, for after school activities.  The numbers won’t be firm but you can at least have a sense of what you’re in for. Check into your maternity/paternity benefits.  If you are lucky enough to have paid leave, and many people are not, it may not be as long as you want or need to stay out of work.  You need to have money set aside to get you through a period without two incomes. Babies need stuff, but not as much stuff as you think.  And they don’t really read labels so the stuff they need doesn’t have to be top of the line. Before the baby comes, work out what would happen if one parent decides to stay home.  How can you make that work?  In the long run, it may be cheaper but then one parent (usually mom) has their career track derailed.  Short term savings could have long term consequences. Can you transfer your office skills into something you can do at home?  A teacher could tutor for example.  Just don’t forget the tax implications for working for yourself.  Working part time can be an option too.  Even if you only break even financially, there are benefits to keeping one foot in the work force. Having a baby is a big change but it doesn’t have to wreck your financial goals, just go in with both eyes open. Show Notes LearnVest:  Get a personalized financial plan. Learn more about your ad choices. Visit megaphone.fm/adchoices

We’re talking all things treasury today on Listen, Money Matters. Treasury bills, notes, and bonds.  Which, if any should you invest in? Were you given bonds as gifts when you were a kid?  It may have seemed like a lame gift at the time but there probably aren’t many other gifts you still have decades later. A Treasury Bill has a maturity date from 91-364 days.  A Treasury Note, from 2, 3, 5, or 10 years.  And a Treasury Bond, 30 years. Buying a bond is buying debt. Buying bonds is less risky than buying stock because bond holders are among the first to get paid even if a company goes bankrupt.  The yield is low though, less risk equals less gain. Because it is unlikely that the US government will go bankrupt, these are among the safest investments you can make. A bill doesn’t pay interest but is bought at a discount and when mature, pays at the full value. A note does pay interest.  When it matures, you get back what you paid for it but you are getting interest payments in the meantime. All of these investments are very liquid so if you need it, you can have cash in hand very quickly.  You also don’t have to pay state or local taxes on gains made through Treasury buys, still pay federal taxes though. The younger you are, the less heavily weighted you should be in bonds as opposed to stocks.  You can afford to be more risky when you’re younger.  Hold off on going deep into bonds until you are nearing retirement age. We want some ideas from you all.  LMM needs to start making money so Andrew can work on it full time.  E-mail us at listenmoneymatters@gmail.com and give us your suggestions. Show Notes Treasury Direct:  Where you can buy the things discussed in today’s episode. Betterment: Start investing today. Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you guilty of one of the seven debtly sins?  Find out how sinful you are and prepare to repent your sins in the church of Listen, Money Matters. There are seven deadly sins if you subscribe to ancient fairy tales.  You can commit those sins in the realm of personal finance too. Come forward and be bathed in the blood of personal finance, all you sinners out there. Let’s start with lust, possibly the most fun of the sins!  Lust is when you long for something to perhaps an unnatural degree.  A new car when you have a perfectly good one. I’ll disagree with Thomas on high thread count sheets.  They are totally worth it and there is no going back.  Buy those. Gluttony is over-consumption to the point of waste. Wasting food is probably the best example.  If you plan your meals, you’ll waste less.  Don’t buy a bag of carrots, roast two and let the rest rot.  Learn what else you can do to use the other carrots. Greed is wanting more, more more.  You have ten million and you want eleven. If you have enough and your pursuit of more harms others, that’s greed.  Also, you’re a dick. Sloth is being lazy.  It’s easy to get lazy with finances and also easy for that to allow things to get away from you.  If you build your systems, so many of your finances can be automated, allowing for a little sloth. Wrath can mean making snap decisions in terms of personal finance.  When we’re angry, we don’t always make the best choices. Envy can make you buy a flat screen because your friend has one.  Keeping up with the Joneses is a big problem for some people. You don’t know how deep in hock someone might be for all the accouterments of their flashy lifestyle. Pride can make you think you’re a special snowflake who deserves only the best.  But a Honda Civic gets you from Point A to Point B just as well as a BMW. So which are you, a personal fiance saint or sinner? Show Notes Keegan Ales Mother’s Milk:  A dark, creamy, milk stout. Buffalo Sweat Sweat Oatmeal Stout:  A sweet, smooth stout. Mint:  The easy way to track spending. Learn more about your ad choices. Visit megaphone.fm/adchoices

We mentioned margin and a previous episode and only touched on it.  A lot of you wrote in with questions so we’re doing a whole show to explain what it is. Simply put, margin is borrowing against your investments without selling your investments. You can pull money out of your brokerage account on margin by setting a toggle on the account.  You’ll pay interest and if you don’t pay back the loan, the brokerage firm takes your investment.  It’s like borrowing money against your house.  If you don’t repay it, the bank takes the house. There isn’t a monthly payment, the interest gets added to the total margin you have out. The trick is to grow your investments faster than the rate of the interest.  Playing with margin can be really good or really bad. Margin is the reason people like Warren Buffett gets huge returns and the rest of us don’t. You can use margin to do whatever you want, go to Vegas, buy a house, or invest in more stocks. We are doing this episode for informational purposes.  Margin is a risky thing and not something novices should be fooling with. So why not use your low risk investment to margin?  You can expect about 7% returns, the interest on margin would be so close to or above that, it wouldn’t be worth it. A margin call happens when the value of your account falls to value calculated by the broker’s formula.  You would then be required to either deposit more money into the account or sell off some assets. Again, LMM is not recommending this strategy.  Just putting it out there for everyone to understand. Show Notes Shipyard Black IPA: A rich, malty beer. Betterment:  The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

Living with roommates can be a minefield.  Particularly when it comes to splitting shared expenses.  Here are a few tips to navigate the situation. One of the best things about roommates is splitting the expenses.  But it can also be one of the most fraught aspects.  Learn how to do it so everyone feels they’re being treated fairly. Thomas is currently living with three roommates even though they are all done with school.  So he knows something about how to make this situation work.  They have individualized leases which not everyone may be able to get but is worth asking about. The utilities are shared and you’ll have to decide in who’s name to open the accounts.  That person should automate the payments to ensure that nothing is ever paid late. Thomas uses Stripe to breakdown the amounts everyone owes and they pay him through it. Some stuff is just not worth fighting over.  Breaking down who takes longer showers or works from home using the most electricity is petty and probably doesn’t make a huge difference money wise anyway.  This is easier when all of you get along well and none of you are on a starvation budget. Using a whiteboard to list who was the last one to buy shared things like paper towels and trash bags is an easy, fair way to track things.  Having evidence will cut down on arguments. When a problem does come up, don’t approach it as, “Hey, you should pay more.”  That will make the other person defensive.  Approach it as a shared problem that you will solve together. Sometimes it’s just better to overpay a little if it avoids a lot of stress.  Saving a few bucks is not always worth the head ache. This attitude can relax the dynamic in the home for everyone. If you’re moving into a place where the roommates have already been living, you have a right to ask to see the rent and utility bills before negotiating how much you will be paying.  Otherwise you may get into a situation where you are subsidizing everyone because you just paid what they asked. Living with roommates can be a great way to share expenses but go into a situation carefully. Show Notes Shipyard IPA:  A single hopped IPA. Kronenbourg 1664:  The premiere beer of France. Stripe:  Automated bill pay. SplitWise: Perhaps the best utilities sharing app for roommates. Found out about it after the fact and wish it existed years ago! Learn more about your ad choices. Visit megaphone.fm/adchoices

How much real fun do you have compared to not that fun distractions? Those distractions are the reason for your lack of fun.  Learn how to get rid of them. Do you wish you had more time to see friends devote to your hobbies, knock a thing or two off your bucket list?  Well, you would if you stayed the hell off Facebook when you should be working. That kind of stuff is low-density fun.  It’s a little fun and it’s spread out through the day.  But it’s not the same kind of fun as hanging out with friends or playing your favorite video game. That is high-density fun, fun that is really fun and takes a few hours. This kind of fun is so important that you should schedule it.  You have to work when you should be working of course but you should have fun when you should be having fun too. And if you are getting rid of the dumb, low-density fun activities during your work time, you will get more done.  Then when it’s fun time, you won’t have unmet obligations in the back of your mind haunting your good time. So close the social media tabs, close your office door, put your cell phone in your desk drawer with the notifications muted. America has that puritanical worth ethic beat into us.  But we work hard enough.  Even if you love your work and work for yourself, a balance is important.  Few people look back at their life and think they should have spent more time working. While Netflix or gaming time are perfectly legitimate types of high density fun, aim to spend part of your fun time with actual 3D people.  And don’t check your phone every five minutes while you’re with them. So have more fun!  Work hard play hard is a trite phrase but you should be doing both. Show Notes Rescue Time:  Helps you understand your habits so you can focus. Stay Focusd:  If you have no will power, this will lock you out of your favorite time waster sites. Learn more about your ad choices. Visit megaphone.fm/adchoices

The life success triangle has three parts, learning, value creation, and relationship building.  We’ll see how they fit together to help you make money. Thomas came up with this concept for college students and it was the Student Success Triangle.  But it can be applied to your post-college life as well. All three points of the triangle are equally important and support each other.Full Article HereShow NotesCIG:  Thomas’s original post. Betterment:  The smart way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you want to start buying individual stocks and make your money work for you, Google Finance is a great place to conduct thorough research and learn more about stock investment strategies that will help you reach your financial goals. This article gives you key information about Google Finance, and how you can maximize its data.Full Article HereShow NotesBetterment:  Investing made better.Google Finance:  Research at your fingertips. Learn more about your ad choices. Visit megaphone.fm/adchoices