Personal Finance Archives - Page 4 of 112

Apache is functioning normally

August 22, 2024 by Brett Tams

Kids, it turns out, need their parents even after they’re all grown up.

About 6 in 10 parents say they’ve helped their young adult children financially within the past year, according to a report released earlier this year from the Pew Research Center. The most common forms of assistance? Household expenses, cell phone bills and subscriptions to streaming services.

“Parents have always helped their children, but one of the real questions is, ‘How much is too much?’” says Anne Lester, author of “Your Best Financial Life.” The answer, she explains, depends on how much parents can afford to help, as well as each family’s parenting values.

To navigate the challenge of helping young adults achieve financial independence, money experts suggest these strategies:

Talk about money early

Setting up young adults for self-sufficiency starts when they’re younger and still living at home, says Mindy Oglesby, certified financial planner and founder of Oglesby Wealth Strategies in Watkinsville, Georgia.

To help children become financially independent as adults, she says, “it’s important to help them with the mindset of making small sacrifices for something they want,” she says. For example, kids can earn an allowance by doing chores around the house.

Then, Oglesby adds, once they have their own money to manage, parents can show them how to apply a budgeting strategy and immediately put some of that money into a savings account for the future. They can also use a portion to buy something they want, like a toy. “It teaches them to set goals and work for things,” she says.

Rose Niang, CFP and director of financial planning at Edelman Financial Engines, says it’s also helpful to talk to your children about money steps you’ve taken for yourself, such as paying off credit card debt or saving for retirement. “These are conversations that can be sprinkled in anytime, and it will help them later,” she says.

Consider charging rent

As those kids become adults, living at home with parents is a popular way to delay bigger expenses. About 57% of young adults between ages 18 and 24 live with their parents, according to the Pew report. Most say they contribute financially to the household in some way. That can include paying for groceries, bills or rent.

Charging young adults to live at home is a good way to foster financial independence, Oglesby says, especially if the parent puts those “rent” payments into a savings account for the child to one day use toward their own home.

The ideal amount of “rent” really depends on each individual situation, she says, adding that “not everyone will be able to contribute,” and that’s OK, too. It can be a goal they work toward.

Help with specific purchases

Instead of providing blanket financial support, Lester suggests assisting young adults with specific expenses, such as helping them make a down payment on a first home or covering food and rent while they are looking for a job or in school. “Because if you just have an open checkbook, nobody learns,” she adds.

Niang says it can also be helpful to focus on helping a young adult with their “needs,” such as food and housing, while letting them figure out how to handle “wants,” such as a new car or concert tickets, on their own.

Set realistic deadlines

Niang suggests setting and communicating realistic deadlines so your kids can prepare for when parental support runs out. For example, you could tell your child that as soon as they start their first real job with a steady paycheck, they will be taking over payments for their cell phone bill.

Coinciding with milestones, like a first job, helps greatly, Niang adds.

Elaine King, CFP and founder of the firm Family and Money Matters, says withdrawing financial support is easier on young adults if it’s done slowly. Parents might want to reduce their support of lifestyle costs from 100% to 80%, then 50% before getting to zero. “Don’t do it all at once so they can get an additional job or adjust,” she says.

Help them build their own wealth

Lynnette Khalfani-Cox, a personal finance expert and author of “Bounce Back: The Ultimate Guide to Financial Resilience,” suggests helping young adult children in ways that help them build their own wealth, a technique she calls the “wealth starter kit.”

For some, this approach can include purchasing property for children, which she did for her own kids. When her daughter was in college, she and her husband bought a condo for her to help her establish in-state residency for school. That helped keep tuition costs down while also providing her a place to live and an asset that grew in value over time.

“This investment strategy paid off in spades,” Khalfani-Cox says. It worked so well that she and her husband repeated the strategy with their son. She emphasizes that each child is different and some may need more support than others.

A similar but less expensive way to help adult kids build their wealth could be to help them set up retirement accounts and figure out an ongoing strategy for helping them grow.

Protect your own finances along the way

One of the most important rules for parents is to first make sure their own finances are shored up before offering support to their adult children. According to the Pew report, 36% of parents who helped their young adult children financially in the past year say it has hurt their own personal finance situation at least some amount.

“Try to show them in your own life that you are being financially stable,” Oglesby suggests. “You’re leading by example.”

Source: nerdwallet.com

Apache is functioning normally

August 21, 2024 by Brett Tams

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:

Learn how you could save money by caring less about what other people think and how to weigh the pros and cons of a job offer.

How can you save money by not caring about others’ opinions? How does commute time factor into whether you should take an in-person job? Hosts Sean Pyles and Sara Rathner discuss freeing yourself from the pressures of social validation and adopting smart spending habits to help you understand how these approaches can boost your financial well-being. They begin with a discussion of saving money by “not caring,” with tips and tricks on avoiding unnecessary spending influenced by social media influencers, focusing on purchases that genuinely make you happy, and recognizing the fleeting dopamine rush from new buys. They also delve into strategies such as choosing unique vintage clothing, the benefits of a capsule wardrobe, and making thoughtful car-buying decisions.

Then, hosts Elizabeth Ayoola and Sara Rathner talk to Andrew, a listener in Miami, about his decision to start a new job that would increase both his salary and his commute time. They discuss the trade-offs of job changes, the impact on work-life balance, and questions you can ask yourself to help align your career progression with core values.

Check out this episode on your favorite podcast platform, including:

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Episode transcript

This transcript was generated from podcast audio by an AI tool.

Sean Pyles:

Teddy Roosevelt once said, “Comparison is the thief of joy.” But if you’re not careful, it can also be the thief of your hard-earned money.

Sara Rathner:

In this episode, we’ll help you find ways to save money by simply not giving a hoot about what people think.

Sean Pyles:

Welcome to NerdWallet’s Smart Money Podcast. I’m Sean Pyles.

Sara Rathner:

And I’m Sara Rathner. Later in this episode, I am joined by our co-host, Elizabeth Ayoola, to talk with a listener about how they should weigh the pros and cons of accepting a job offer that requires a big lifestyle change. Is a bump in salary necessarily worth it?

Sean Pyles:

But first, we’re going to talk about how you can save money and probably your self-esteem by not caring what people think or comparing yourself to others. If you are a millennial who was bullied into purchasing crew socks because the TikTok youths made you feel bad about your ankle socks, this segment is for you.

So, Sara, I know this idea of not caring what other people think, not basing your self-worth on how you stack up to others, and using it as a way to save money is something that’s been top of mind for you lately, right?

Sara Rathner:

It actually came up in a Slack conversation with a coworker where we joked about having to Google certain Gen Z phrases to find out what they mean. And I remember being 22 in my first full-time job, and coworkers at the time would ask me to define millennial slang, and now I’m the old. It’s kind of freeing not understanding what people are talking about sometimes.

Sean Pyles:

That’s true.

Sara Rathner:

I mean, part of it is the lived experience. You just let time pass, and you become more comfortable just being you. You’ve just been you for a longer period of time, and you accept your flaws. Also, part of it is just buying stuff over the years and then coming to an understanding as to what purchases will bring me greater happiness long-term, and then which won’t. So if something doesn’t matter to me, I don’t follow the trend. A friend of mine who’s a couple of years older than me once told me that the decade of life I’ve just entered is the FU 40s, where you reach this level of peace. You focus on what’s important to you, and the rest just kind of fades away. And you know what? She was right. The second I turned 40, my ability to care just really went down. It might be because I have a toddler and my ability to care is just pretty low.

Sean Pyles:

Yeah. Your priorities have shifted.

Sara Rathner:

Yeah, mostly it’s just about preventing him from falling off of stuff at this point.

Sean Pyles:

That’s a good thing to focus on.

Sara Rathner:

I don’t have time to care about anything else.

Sean Pyles:

Sara Rathner:

So anyway, my point is this: I am going to continue to use the ankle socks I already own and love. Thank you.

Sean Pyles:

And that is your right. Okay. Let’s talk about how people can vanquish the allure of comparison or caring what people think about you and using consumer purchases to prop up the image that you project to the world. I have a few quick tips here.

First, please remember this simple humbling fact: No one thinks about you as much as you think about you. People are not thinking days later about the new outfit that you wore into the office or the vacation pics that you posted on Instagram because they are too busy thinking about their outfits and their photos that they posted on Instagram.

Next, realize that the dopamine bump that you get from a purchase just doesn’t last. It won’t be long before you are hunting for something else to spend money on that makes you feel good. And put those two facts together, and you can begin to see why spending money on something with the hopes of impressing people just isn’t the best investment.

Sara Rathner:

And again, if something you love is, say, fashion, you’re spending money on something that brings you a lot of joy, you enjoy the creativity of putting outfits together, you enjoy hunting for something that you love in stores, then do it. Just put more of your budget into that and maybe avoid purchases that don’t matter as much so you have more money to fund the things that you love and then also fund your savings because that’s important, but you’re not really spending money to impress people in other areas. I’m not knocking people who like buying clothes. I like it too. Just understand that if there’s one thing you love, you can’t have everything.

Sean Pyles:

Yeah, you’re doing it because you want to do it to make yourself happy, not because you’re trying to impress this vague idea of someone else who might think that you look cool.

Sara Rathner:

Right. And if you’re spending a lot of time scrolling on your phone, you kind of develop these parasocial relationships with social media influencers. They’re not your friends. They’re trying to sell you stuff. They get paid when they sell you stuff. This is a very one-sided relationship, and they’re the only ones that benefit.

Let’s talk about a few specific areas where you can easily cut back on just spending money to look cool. And we’ve talked about fashion and your wardrobe. And the thing is, compared to years ago, clothing quality is total crap even for more expensive items. But on the lower-cost side, you buy a T-shirt or a sweater, wear it once, wash it once, and then it becomes a tissue. Chasing trends, you know, this shape of clothing is in style this season, and this detail is in style that season, and then this color, and constantly buying new and going on these clothing hauls, you are going to have a closet full of garbage after a while.

Sean Pyles:

One of my personal and financial goals for this year was to rethink the way that I consume clothes because I am one of those people that likes to have clothes that make me feel good and that are kind of unique and different. So I set out to not buy any new articles of clothing, as in brand new pieces of clothing from a store. Since I do like getting unique vintage pieces, I allowed myself to shop on eBay where I find a lot of cool stuff or at local thrift stores, and I did let myself purchase things from there. So far this year, I found that I’m spending less on clothing, my environmental impact is lower, and I’m also just much less likely to buy something for the sake of updating my wardrobe to get the latest style or cut of jeans or whatever.

Sara Rathner:

And one thing, if you’re trying to minimize how much clothing you buy as some sort of personal challenge, you could try the capsule wardrobe thing, wear the same 20 pieces of clothing in different ways for a month, and force yourself to be creative, and in a way, that can make you fall in love with some of your old clothing again.

Sean Pyles:

Yeah, God, I have so many pieces of clothing that I’ve not worn in over a year, but I will not get rid of them because maybe one day I will wear them again.

All right, well, let’s talk about another area where you can stop trying to impress people — your car. A lot of people buy or lease a flashy car as a status symbol, but that can be one of the riskiest financial decisions that you can make, especially since the average price of a new car was north of $48,000 in July of 2024 according to Cox Automotive. And new vehicles, which often come with loads of computers and sensors, are also more expensive to repair. So you have an expensive car payment, insurance is not going to be cheap, and repairs will also be pricey. There’s nothing wrong with getting an affordable, reliable used car and just driving it until the wheels fall off. So, Sara, I know that your household recently bought a car, right? So how did you approach that?

Sara Rathner:

Yeah, we bought a used 2022 Honda CR-V hybrid a year ago when prices on used cars finally started to come down somewhat. We traded in a 14-year-old compact car that was worth maybe $1,200 at that point because we needed a car that fit the car seat and the stroller and all that stuff, and the compact car didn’t. We had to push the front passenger seat up all the way to fit the car seat. So, not ideal. It wasn’t great for longer-term family use, and we share one car, my husband and I. So we needed something that worked for all of us—both adults, the baby, and the giant dog.

So I have to say, honestly, this is one of the nicest cars I’ve ever driven. It has all of those fancy safety sensors that are standard now. I have a backup camera for the first time in my life. The thing is, this is not a sexy car; it’s a mom-mobile. The trunk always has reusable grocery bags in it. I’m just in that phase of life, and I hope that we drive this thing long enough that the backseat is eventually filled with my future preteen son and his sweaty friends after soccer practice.

Sean Pyles:

Well, that sounds really well thought out. It’s like the kind of car that fits your needs for where you are in life right now.

Sara Rathner:

Yeah, I was saying maybe one day we’ll hand it to him, and it’ll be his car, and it’ll be like, “This car is older than you.” And it’ll still drive well. That would be ideal.

All right, so Sean, you bought a car a couple of years ago. How did you think about that purchase?

Sean Pyles:

Well, here’s the part where I say that buying a car for the right reasons doesn’t mean that you have to buy a total clunker or something that’s completely utilitarian. I drive a lovely 2016 BMW X1, which I named Bette Midnight after the character Bette Porter from the show The L Word. Maybe TMI, but I do really love my car, and having a BMW might sound fancy and obnoxious, but I got an amazing deal on my car back in May 2020, and my payment is a little under $350 monthly. I justify it however I want to, basically, but here’s why I bought this car.

In high school and in college, I drove a severely busted Honda Civic where the muffler was rusted out and literally dragged on the road behind me. When it came time to get my first big-boy car, I wanted something just a little nicer than that. I will admit that as much as I love my car, I do live with a certain amount of cognitive dissonance where whenever I see a BMW driver on the road, I think, “Wow, that guy’s such a jerk.” And then I realize that that’s me, that I’m the jerk now.

Sara Rathner:

Yeah, I think if every one of us took a moment to really think about it, we’re all the jerk sometimes.

Sean Pyles:

Sara Rathner:

Yeah. So when you see your own face reflected in the window of a BMW that you don’t actually drive, you can just live with that emotion.

Sean Pyles:

Yeah. Give yourself some grace for being a jerk every so often, but within reason.

Sara Rathner:

Yeah, and then just try to be better.

Sean Pyles:

Sara Rathner:

Sean Pyles:

Well, I would say go back to what we talked about in the beginning. Get the car that you want for the right reasons because it’ll make you happy and not because you’re trying to look cool. Also, do a lot of research on the kind of car that you want. When I bought my car back in 2020, I had a spreadsheet, of course, and I listed the models that I was considering, their average annual repair cost, their miles per gallon, among other factors. And then also know your personal numbers, as in how much car you can afford. NerdWallet recommends spending no more than 10% of your monthly take-home pay on your auto payment alone. That’s not including insurance, gas, etc. And if you want to see how much car you can really afford, check out NerdWallet’s Auto Loan Calculator. You can find a link in this episode’s show notes post or by just searching “NerdWallet Auto Loan Calculator.”

Sara Rathner:

Yeah. And once you figure out what you could comfortably afford, then you can just stroll into a car dealership with a bit more confidence. And you should do that because car salespeople can smell uncertainty from several miles away, and they will pounce on you, and then you’ll end up buying the car that is not right for you because of pressure. So you don’t want to deal with that situation. So switching gears…

Sean Pyles:

Pun intended.

Sara Rathner:

Hard joke, right? Pun intended. Let’s talk about one more area where you could save money by not trying to impress people. And that is when you go out of your way to do really expensive stuff just for the goal of bragging about it online. I’m talking meals out where you photograph every dish or taking vacations just so you can post photos of the Eiffel Tower or whatever on social media. And the thing is, if expensive vacations or nice dinners bring you joy, that’s great. I love vacations. I take them as often as I can. That can be a priority in your budget, but just doing it to show off and then going into debt to do those sorts of things isn’t a great idea.

Sean Pyles:

Yeah. I was recently having dinner with a group of people, and one of the folks at the table was talking about their recent travels and how they went to X, Y, Z locale just to check the box and say they’ve been there, not because they particularly cared about the place’s historical or cultural significance. And that struck me as a little bit odd. When you’re traveling, you want to see the important destinations, of course, but that should be because you want to do it for yourself, not because you are impressing people in your social media feed who, again, don’t really care that much about whatever you’ve seen.

Sara Rathner:

Yeah. If you want to go to Venice, Venice is beautiful. You should see it. It’s a lovely city, and I recommend it, but not just for the ‘gram.

Sean Pyles:

Sara Rathner:

It should be because you actually want to go and immerse yourself and get to know people there and just really have a wonderful time and not just hop in for a day, check the box, and run out. Cities deserve our attention. They always do. So this gets to a good question that people should ask themselves whenever they’re making any sort of discretionary purchase, which is simply, why? Why are you spending money on this thing or this experience, and what do you expect it to do for you?

Sean Pyles:

Sometimes the answer is just, “It’ll make me happy.” And that’s actually one of the best answers that you can give. And so far as saving money, there are some really easy ways to have great experiences and not break the bank. Travel-wise, we Nerds often recommend traveling in the off-season if your schedule is flexible. You’re likely to find cheaper airfare, plus you won’t have to elbow your way through hordes of strangers to see the sites.

Sara Rathner:

I think that’s enough on how to save money by not giving a… You could fill in that throat-clearing section with any word you’d like. Before we move on to this episode’s money question segment, a reminder, listener, that we are running another book giveaway sweepstakes ahead of our next Nerdy Book Club episode. Our next guest is Jannese Torres, author of Financially Lit!: The Modern Latina’s Guide to Level Up Your Dinero & Become Financially Poderosa. That means powerful, by the way, which offers tips to young people on how to get started with managing their money.

Sean Pyles:

To enter for a chance to win our book giveaway, send an email to [email protected] with the subject “Book Sweepstakes” during the sweepstakes period. Entries must be received by 11:59 PM Pacific Time on August 22nd. Include the following information: your first and last name, email address, zip code, and phone number. For more information, please visit our official sweepstakes rules page.

Sara Rathner:

All right. Now, let’s get into my conversation with our co-host, Elizabeth Ayoola, and a listener about a big job change that listener is considering.

Welcome to NerdWallet’s Smart Money Podcast, where you send us your money questions, and we answer them with the help of our genius Nerds. I’m Sara Rathner.

Elizabeth Ayoola:

And I’m Elizabeth Ayoola. Now, if you have a money question for the Nerds, call or text us on the Nerd hotline at 901-730-6373. Again, that’s 901-730-NERD. You can also email us at [email protected].

Sara Rathner:

Follow us wherever you get your podcasts. And if you like what you hear, leave us a review and tell a friend. We are back, and we’re joined by a listener, Andrew, who has some questions about the trade-offs of leaving a work-from-home job for one that might pay more. Andrew is 37 years old and lives in South Florida. Welcome to Smart Money, Andrew.

Thanks. Thanks for having me. Big fan.

Sara Rathner:

So before we get into the conversation, a quick reminder that we’re not here to give you individualized financial advice. Our goal is to provide the information you need to make the most informed financial decision for your situation. Does that make sense?

Yes, ma’am.

Elizabeth Ayoola:

All right, awesome. So let’s get into it, Andrew. Now, I know you have some really good questions for us about the trade-offs of leaving your work-from-home gig for one that is in the office but pays more. However, before we get into that, can you talk to us about your financial situation generally right now? Tell us, what are your financial goals, and what are some of your pain points?

Currently, I am building up my emergency fund, which I know you guys are well-versed with that. Three to six months of expenses, erring more towards the six. After that, just looking to automate everything—529, Roth contributions, saving for vacations, saving for a new car. Real estate-wise, we’re all set. We own one, are landlords on two others. Not looking to rent, not looking to move anytime soon. So I’d say we’re stable. We only have the mortgages, no other debt.

Sara Rathner:

And tell us a little bit about your home and family situation. Who else lives with you? Who are you supporting? What are you working for basically?

I got the missus and two little ones. One is in grade school now, so that daycare payment stopped, thankfully, but the other one is still in it for another two years. That’s a pain point just because there’s not going to be any tuition or scholarship until she’s four. So we have at least a year or two of these monthly payments. That’d be the biggest pain point right now.

Sara Rathner:

And you mentioned having a spouse. Are they also working?

She’s a props master, which is a super cool job—gets to make things and see them on stage in theater productions—but that doesn’t pay what I would call a living wage, and that’s also part-time. She’s the primary transporter of the children and making sure they’re clothed and shuttled around to all their activities.

Sara Rathner:

So you got a call from a recruiter about a new job that might pay a decent amount more, might be enough of an incentive to leave the job that you have now, but it’s in an office and you live in a really high-traffic city. So you want to tell us a little bit about that and what questions that potential opportunity has brought up for you?

Definitely. As we know, a couple of years ago, we experienced quite the phenomenon worldwide, which shifted everyone to working from home. Honestly, it was kind of a dream for me, even pre-pandemic. 2016, 2017, I thought to myself, “All I need is a laptop, and I can do almost everything from home” at the job that I was at. And I did do that sometimes, even back then. I’d come home and work more; I’d still have to go to work in the morning.

So post-pandemic, it’s been a blessing for a lot of people. I feel, at least me personally, I’ve gotten to get in shape and hang out in a very pivotal time in the kids’ lives, from zero to six. But Miami, in particular, poses its challenges. One, it’s a high-cost-of-living city. The switching costs of moving closer to our central business districts is not easy. The traffic is pretty bad, but what’s worse is likely the road rage, as Miami is the first and third place road rage capital of the country. So that’s where the stress versus money payoff comes into play.

Sara Rathner:

And I will say this, that I loved your question because Elizabeth and I are both intimately acquainted with South Florida traffic. I’m from Miami originally, Elizabeth is living in South Florida. I learned to drive in Miami, so I know that road rage too well. How long would your commute be, and how much more money are we talking?

So commute minimum would be an hour, and this is 20 miles, maybe less.

Sara Rathner:

And this is each way?

Each way. It’s likely closer to 80 minutes, 90 minutes. And if there’s an accident or something, it might even be two hours each way. And I believe the position when I first emailed you guys was four days a week in the office, maybe five days a week in the office. For where that one was located geographically, it just didn’t make sense to basically give up 10, 12, 14 hours a week just in the car. I’d get to listen to a lot of your guys’ podcast for sure, but I’d run out of that pretty quick. The money, anywhere from $60,000 to $70,000 increase. I tried running an analysis—extra gas, extra wear and tear, oil, increased tax. Given where that one was, I think the resounding response and what all the Redditors told me was absolutely not.

Elizabeth Ayoola:

What comes to mind for me, I always find these scenarios a great way to revisit your core values. I think a good way, especially for listeners who may be in this kind of dilemma, to weigh it out is to think about what your values are and think about what your ideal life looks like. I know for me personally in my career, that has been a guiding light for me. I know before this job, I was working at a job that was pretty comfortable, but I had to go to the office every day, and one of my highest values is flexibility and freedom. So being able to have the freedom to work from home and choose my lunchtime or maybe do a quick workout in between meetings is really important to me. So did you find that you weighed your values when you were kind of making this decision as well? I know you just mentioned things like taxes and other kind of quantifiable things, but did you think about your values as well?

I did. And I don’t know if it’s a faux pas to mention another money expert on this show, but I listened to and read Ramit Sethi, which I’m sure you guys are familiar with him, and he talks about the concept of your rich life. And for the majority of the people he talked to, fixed income is way too high. Their income-to-housing cost is way too high. We’re in an okay position there to where I don’t need necessarily to earn $50,000 more, but part of my rich life, as silly as it may sound, is now Brazilian jiu-jitsu, and the gym is 12 minutes away, and I can go every night or as much as my wife would allow.

If I’m working a downtown job, getting home at 6:45, hungry, have to go to the bathroom, then I don’t know that I’m going to have the energy to then go out and fight. And that’s my primary way of keeping in shape. So I just know that if I take a downtown job where I’m there every day, getting my Chipotle every day for lunch, it’s likely going to cause some health implications.

Sara Rathner:

It’s funny because when you sent us this question, it seemed like you hadn’t yet made the decision, and in that time you have, and in this case, you decided not to pursue this opportunity. But in the future, if you were faced with a similar potential opportunity, a similar decision, is there a number or a type of role that would make you say yes? What in your value system might make you make a different decision in the future?

Interesting you should mention that because a mere 90 minutes ago, I was talking to a recruiter who messaged me on LinkedIn, but she presented a pretty interesting opportunity. The increase in base pay would be about $42,000, which is less than the other job, but it’s also closer. And this one’s hybrid—three in, two home. So despite less money, I do get two days back, and it’s about an hour total, less commuting per day. The role itself is non-managerial, which at this stage, that interests me a little more just with the little ones that I’m already managing at home. I don’t necessarily want a team of five or six analysts under me that I need to manage as well. The talk went fine with the recruiter, and she’s going to pass along my info to the in-house recruiter. So that one’s a little bit more compelling, even though it’s less money, which I guess reveals to me that I really do value the time and the travel more than the dollars.

Sara Rathner:

And I asked some questions about your family life because I think when you have a two-partner household and maybe one person brings in more money, it’s very easy to continue chasing even more money because that’s your role. You’re the one that is largely the financial breadwinner. And I like to hear that you’re also thinking about the effect it might have on everybody that’s at home, not just your children but also your wife, because your greater absence would put more on her plate with no additional income on her part, and it might even interrupt her ability to continue earning an income because there’s just more at home to do while you are not physically there. It’s not just about the money; it’s also about the time, and getting to use your own bathroom is the best.

Yeah, that’s true.

Elizabeth Ayoola:

It is. And I will just add, I personally think there are some scenarios where you may sacrifice convenience a little bit if you have a financial goal. I definitely know last year that was the situation for me. I was behind on my retirement savings, and I basically picked up a whole bunch of freelance work to try to boost my retirement savings. So it did mean that I had less free time. But it’s nice to have a timeframe. If someone else, again, another listener, is in this scenario and decides, “Hey, I really need that extra $60,000 or $70,000,” to maybe have a timeframe to it and say, “Maybe I can do this for two or three years just so I can accomplish my goal.” And then I can circle back to whatever lifestyle I was living before, if that is a possibility.

Yeah. And I think from a long-term goal, my experience has been that whenever I’ve switched jobs, I’ve gotten more, and that more has now become my new floor. I’ve never taken a pay decrease, fortunately. That might not be the experience for everyone, but that’s been my experience. It’d be almost preposterous for me to two or three years from now request $175,000 as a base, getting paid what I’m getting paid now. Whereas this most recent opportunity would put me in striking distance, base and bonus, of the 200s. So there’s also the long-term 5-10 year consideration. But what if we have more children? What if we want private school? What if we want to buy a single-family in the city? That’s at least a million dollars to buy a single-family in the city. Those are some other considerations I’m going through.

Sara Rathner:

Yeah, braces and summer camp don’t pay for themselves, unfortunately.

Elizabeth Ayoola:

Sara Rathner:

As your kids get older, your family’s needs get more complicated. Just when you think daycare tuition is off your plate…

Sara Rathner:

…in come the travel sports.

Sara Rathner:

So Andrew, you mentioned that obviously a really great way to boost your salary over time is to switch jobs. You typically get bigger salary bumps when you switch companies than you would if you were to stay put and just accept periodic raises. But in your current job, in your current industry, your current employer, do you see opportunities to bloom where you’re currently planted and perhaps pursue higher salary positions, promotions, or even just make the case for a major salary bump and not have to switch jobs and start going into an office?

I would say yes. I work for a very, very large bank, which means we have a lot of departments. Fortunately, the powers that be are very pro-horizontal mobility, get experience in this department, this specialty area, and then not necessarily, you could always come back, every department has their staffing need, but you still have those relationships, which is a very cool culture and one of the reasons I like where I’m at. I’ve also been promoted once, asked for a decent raise—nothing out of this world, a couple percentage points—but they’ve been granted.

There is some wiggle room within my position, and then if I’m willing to make sort of a not horizontal, not vertical move, sort of a lateral move, diagonal, that could be $10,000 to $15,000. And lastly, my boss has expressed interest in me taking their job and then them getting promoted. Honestly, that’s not something I’m looking to do right now. Again, don’t want to add stress, but again, I might hit a ceiling in my rank, and that’s the next logical step. So I’ve been thinking about that, but not something I’m really wanting to do within the next six months, I would say. So there is some opportunity where I’m at, but I can’t just come out and say, “Hey, I want a 40% raise. Look what they’re trying to pay me.”

Sara Rathner:

Another thing to think about too is as you move up the ranks in your career and you’re approaching your 40s, for a lot of people, it means management or at least a senior-level position that’s not management, but also recognizing what extra hours are you potentially going to have to work in this new role? Are you still going to be able to cut it at a 40, maybe 50 hours a week position, or suddenly there are going to be increased demands on your time?

Yeah, I think company culture is huge. At my former employer a couple of employers ago, they had what I would call a Wall Street culture, which personally, it just wasn’t for me—the 7:00 to 7:00 minimum and then the ambitious people working Saturday and Sunday. Kudos, I hope you have a yacht by now, but that just wasn’t for me. Fortunately, where I’m at has more of a Main Street culture. Obviously, as a manager, I would be subject to more deadlines and responsibilities to those above me and managing the people below me to make sure that we can fulfill all our deadlines. But I wouldn’t see myself working till 6:30 or 7:00. They’re very big on PTO, and when you’re on PTO, they’re very good on work-life balance, which is another reason I like where I’m at.

Sara Rathner:

So one more thing to think about, if you were to take an opportunity in the future that even is a hybrid role, and this is something that people might realize if they transition from work-from-home to hybrid or a fully in-person position: are there any home tasks that you will need to pay to outsource to make up for the fact that you’re not physically present to help with those tasks? And is that something that you would need to work into your budget to make working away from home possible for you?

For the first one, even though it was even more money than the second one, I thought, “Well, I’m just going to have to hire a maid and a chauffeur.” So what’s even the point when I could do those things and it’d be a wash? I’d be working more, and then I guess I’d stimulate the economy by hiring two people. But I’m not really looking to be an economic stimulant other than through spending. As we free up cash flow from what were former debt payments, we could bring someone in to tidy the home. I think that’s the first thing people usually look to do, at least us upwardly mobile Miamians. If I’m meeting all my investment quotas, then why not?

Sara Rathner:

That’s definitely the first thing I outsourced in the home. Using your money to free up your time is, to me, such a tremendous use of money. It can be used to add convenience, not just stuff, but also the absence of something that you have to do is incredibly powerful. So yes, definitely, if you increase your salary and want to increase your quality of life in some ways by outsourcing some tasks, then that is a great use of money. It allows you to be around for your family more often too.

I think a lot of it is how you frame it as well. My friend, who’s in construction, does it quite well. He’s willing to take a pay decrease if he can work a third less hours because he always calculates on a per-hour basis. Which if someone tells me their hourly salary now, I couldn’t tell you if that’s a lot or little because I haven’t been hourly in years. So him being salaried, he always does that exercise, and he’s like, “Oh, I’m getting paid $6 more per hour, but I have to work 30% more. Absolutely not worth it.” Like, what does $6 get you? But I just did the exercise for role two, and I did it on a monthly after-tax, what it would come out to. And it’s enough to cover mortgage and daycare—just the raise after tax.

So when it’s framed like that, that tells a pretty compelling story. Like, “Oh, would you switch jobs and have to drive eight more hours if just the increase would pay for your mortgage and your daycare?” which are most people’s biggest expenses. That sounds pretty good. But when you frame it, do you want to spend 8 to 10 hours a week in Miami traffic and possibly get rear-ended and have people cutting you off? There’s almost no amount of money that you’d want to get paid to do that. So I think the framing is just a very, very interesting concept as well.

Elizabeth Ayoola:

So Andrew, tell us now, we’ve had this conversation, after this conversation, what are you thinking? Do you feel like you have more tools to consider if or when another tantalizing offer comes along for a new job?

I think I do. And shout out to the NerdWallet website, there’s a tax estimator calculator on there where you can put your filing status, your age, your household income. From a strictly math standpoint, I think it’s easy. From a value standpoint, it’s definitely more nuanced. So thank you guys for your time and your input as well.

Sara Rathner:

Yeah, no, we’re happy to be part of your decision-making journey because this is something that I think a lot of people go through as they progress in their careers and as their lives get more full and potentially more complicated in hopefully good ways, but sometimes hard ways too. So if you’re out there listening and you’re weighing a potential job change or you’re itching to change jobs, it’s absolutely not just a financial exercise, but it is also a values exercise.

Elizabeth Ayoola:

It absolutely is. And for me, values usually take the cake. But I say that knowing that I have certain privileges, and I’m able to choose. I know not everyone has that option.

So on that note, that’s all we have for this episode. Now remember, we are here for you and your money decisions. So turn to the Nerds and call or text us your question at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected]. Visit nerdwallet.com/podcast for more information on this episode. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio. And what happens there is you’re able to automatically download new episodes.

Sara Rathner:

And here’s our brief disclaimer: We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

Elizabeth Ayoola:

And with that said, until next time… turn to the Nerds.

Source: nerdwallet.com

Apache is functioning normally

August 17, 2024 by Brett Tams

When electioneering, the best pledges are catchy enough to get stuck in a voter’s head. During this election, “no tax on tips” seems to be the phrase fitting that bill.

Both presidential candidates are embracing the promise to exempt workers from paying taxes on their tips. But the problem with no-tax-on-tips proposals, experts say, is that they’re clearly a bid for votes rather than a substantive solution to address the fundamental needs of tipped workers.

“This wouldn’t help very many workers, and it could actually be very harmful to millions more, with the real benefits of this policy change going to employers and the wealthy at the expense of working people,” says David Cooper, researcher from EPI Action, a nonpartisan research and advocacy organization.

How a no-tax-on-tips promise entered the election

On June 9, former President Donald Trump made a promise to end taxes on tips in front of service workers in Las Vegas. Last weekend, in Las Vegas, Vice President Kamala Harris made a similar pledge. It’s no coincidence that both candidates made the announcement in Las Vegas — leisure and hospitality is the dominant industry in the metro area, Bureau of Labor Statistics data shows.

On Monday, White House press secretary Karine Jean-Pierre said that President Joe Biden also supports eliminating taxes on tips for service and hospital workers, as well as raising the minimum wage.

The policy is undeniably appealing for tipped workers and the unions that represent them. After all, who doesn’t want a tax break when they can get it? Experts say the message to voters may be effective, but the policy is less likely to be.

“I’d say, thumbs down to the policy proposal; it’s bad tax policy,” says Kyle Pomerleau, a senior fellow studying federal tax policy and reform at American Enterprise Institute, a right-leaning think tank.

How do tips factor into wages?

Tipped workers are some of the most visible workers: They’re taking your coffee order, cutting your hair, serving your meals in restaurants, delivering your groceries and ridesharing you around town. And yet, the Budget Lab at Yale University estimates there are only about 4 million workers in tipped positions in 2023 — about 2.5% of the entire U.S. workforce.

The most typical tipped work is in the service and hospitality industry. Tipped workers also tend to be younger than the rest of the working population — 20 to 34 years old, according to Yale Budget Lab.

In order to qualify as a tipped worker, you must earn more than $20 per month in tips. In tipped positions, workers must receive a subminimum wage, also known as a cash wage, of $2.13 per hour. A subminimum wage is combined with tips in order for workers to earn at least the federal minimum wage of $7.25 per hour. If an employee earns a subminimum wage plus tips less than $7.25 per hour, an employer must make up the difference.

There’s also something called tip pooling that’s often done in restaurants; it’s where the front of the house (servers and bartenders) share their tips with each other, as well as with the back of the house (such as cooks and dishwashers). In this scenario, all employees who receive pooled tips — including the workers who earn the tips — must make at least the federal minimum wage, according to the Department of Labor.

It’s unclear how often restaurants properly adhere to wage rules because tipping is notoriously underreported. Although, that’s less of an issue now since most people pay electronically and don’t leave cash tips as often anymore, says Howard Gleckman, senior fellow in the Urban-Brookings Tax Policy Center at the Urban Institute.

How do taxes on tips work?

Median weekly wages, including tips, are $538 among tipped workers, compared to a median of $1,000 among non-tipped workers, according to 2023 estimates by Yale Budget Lab. Many tipped workers earn so little they already aren’t required to pay federal income taxes; Yale Budget Lab estimates this is the case for about 37% of tipped workers.

It’s likely only a small sliver of the tipped worker population would get the tax advantage that Trump and Harris propose — and that’s without knowing what specific income limits would be set by either candidate’s plan.

“Think about somebody who is a server at ‘Bob’s Diner’ — it has a $9.95 special and [the server] is going to get two bucks,” says Gleckman. “If you’re a server at some fancy downtown steakhouse where dinner is $200, you’re going to get 40 bucks, right? So for those higher income servers, this [policy] can make some difference. But for most people, it won’t really matter at all.”

There’s another important distinction about tips and taxes: Even when workers don’t have a federal income tax obligation, workers and their employers must pay federal payroll taxes, which fund Social Security and Medicare programs. That also means they must continue to report tips, even if federal taxes on tips are eliminated; also, the proposals would not affect state income tax requirements.

Neither Trump or Harris has specified whether their proposals would apply only to the federal income tax. But if the No Tax on Tips Act, introduced by Sen. Ted Cruz (R-Texas), is any indication, the exemption would likely only apply to federal income taxes.

How much would no-tax-on-tips save a typical tipped worker?

Tip earnings are hard to characterize since the amount varies drastically based on the type of service that workers provide, as well as local minimum wage laws. But the Tax Foundation offers an example: Say a server earns $19,000 per year in wages plus $15,000 in tipped income. Their adjusted gross income is $34,000. They take a standard deduction of $14,600, which leaves them with $19,400 in taxable income. Under this example they owe $2,096 in federal income taxes.

With a no-tax-on-tips policy in effect, their adjusted gross income is $19,000 since the $15,000 income in tips isn’t considered taxable. They take a standard deduction of $14,600, which leaves them with $4,400 in taxable income. Under this example, their tax liability is $440. It’s the difference of $1,656 from the previous example.

As the Tax Foundation points out, a cashier who makes the same $34,000 — without tips — would have the same $2,096 federal tax liability in either scenario, and so would be paying vastly more in taxes than the server under a no-tax-on-tips policy.

Experts say no taxes on tips is bad policy

Suffice to say, tax and wage experts are unimpressed with the no-tax-on-tips proposal.

Here are some reasons why experts say exempting tips from taxes could have negative repercussions, depending on how the policy is structured.

Social programs and other tax benefits could be impacted

If a no-tax-on-tips proposal includes an exemption for the payroll tax in addition to the income tax, it could impact both worker eligibility for Social Security and Medicaid, as well as the solvency of the program itself, says Cooper.

This scenario isn’t necessarily likely. Even though Trump has not specified if his proposal would apply to both the federal income tax and the payroll tax, Cruz’s No Tax on Tips Act applies the exemption only to the federal income tax. It’s difficult to see Harris applying the exemption to the payroll tax.

But depending on how the law is written, no-tax-on-tips could make it more difficult for workers to get other tax benefits like the earned income tax credit or the child tax credit, experts say.

“If you’re a household with children, those credits phase-in with earned income, meaning that they are larger the more income you earn, up to a certain point,” says Pomerleau. “But if you were to structure this tax exemption as an exemption from adjusted gross income, it would directly interact with the earned income tax credit in the child tax credit and reduce those benefits for households.”

No matter what, says Pomerleau, no-tax-on-tips would add tax complexity for a population of tax filers that, generally, do not have access to accountants to help them through the process. That could result in more workers not filing taxes or not being able to access the benefits they are eligible for.

High earners could find a loophole

A tax exemption on tips leaves open the possibility of exploiting the system. Some in high-income positions like lawyers, for example, could restructure how their earnings are reported to avoid paying taxes on a portion of their income.

“You could envision a lot of scenarios where this would be really grossly abused by highly paid individuals,” says Cooper.

The Harris campaign told The Washington Post that, under her plan, the tax exemption would only apply to workers who earn below a certain threshold in select industries. This would prevent high earners in nontraditional tipping positions from gaming the system. There is currently no bill from Democrats in Congress that matches Harris’ plan.

Trump’s proposal and the No Tax on Tips Act from congressional Republicans doesn’t narrow industry eligibility or impose income limitations.

It could reduce employers’ need to raise wages

The tax benefit presents a double whammy benefit to owners: a tax benefit that appeals to workers and an opportunity to save money by shifting the pay burden from owners to consumers.

“It’s a win-win for restaurant owners, hotel owners, like, for example, Donald Trump,” says Gleckman. “But it’s much more ambiguous and much riskier for tip workers, particularly low-income workers.”

Cooper says this policy won’t incentivize employers to raise raises for workers because there’s a tax benefit inherent to the job. But it could incentivize businesses to reclassify certain positions as tipped occupations.

“The tipping system, as it currently exists, is rife with wage theft and discrimination,” says Cooper. “It opens up workers to abuse from customers and colleagues because they feel like they have to tolerate bad behavior, lest they put their kids at risk. So this [policy] would grow a system that is problematic in a lot of ways and spread it to more occupations. That’s not something that we should be incentivizing.”

The deficit would increase, although not substantially

Tax cuts lead to a decline in revenue, which could, over time, exacerbate the federal deficit; it’s currently about $1.52 trillion, according to the U.S. Treasury. The Committee for a Responsible Federal Budget estimates the cost of exempting tips from federal income tax would be $100 to $200 billion over a decade. If tips are also exempted from payroll taxes, the total could run to $250 billion.

If the policy makes tips exempt from the payroll tax, it would have broader repercussions for Social Security and Medicaid programs, experts say.

“These programs are already facing a fiscal shortfall and will need to be dealt with, in as little as ten years,” says Pomerleau. “If they were to remove $38 billion, potentially from the face of Social Security and Medicare, I would accelerate this problem.”

It could exacerbate tipping backlash

As the CRFB notes, what’s not included in its calculations are changes in tipping behavior, which could result in consumers giving less than they do now if they perceive tipped workers as getting an unfair tax advantage.

A backlash to tipping culture has already resulted in 7% lower tipping among service-sector workers from November 2022 to November 2023, according to a payroll analysis by Gusto, a payroll provider.

It could fuel worker resentment

On the flip side, excluding certain tipped jobs by field or income could stir the pot among workers and the unions that represent them.

Cooper says, “Why would we be giving preferential income tax treatment to this very small subset of workers when there are lots of other hard working, low-paid workers — people providing daycare, childcare, eldercare — that this would do nothing for?”

Gleckman says the policy violates a “cardinal rule of good tax policy,” which is to tax people making the same income at the same level. “I’m not sure I quite understand why a low wage worker somehow should enjoy more benefits than a low wage worker of another kind who’s getting the same income,” says Gleckman. “If you really care for a bunch of low wage workers, there are plenty of other things you could do.”

Unions and businesses groups support no-tax-on-tips

Despite criticism of the no-tax-on-tips proposal, it would benefit workers who are eligible. Adding limitations by industry and income could prevent the exemption from being a regressive one.

Shortly after Harris’ announcement, Culinary Union Local 226 in Nevada endorsed Harris for president and lauded the proposal without acknowledging Trump’s. The union, along with the Bartenders Union Local 165, represents 60,000 workers in Las Vegas and Reno. The Culinary Union argues that the tax exemption could help millions of workers that earn a subminimum wage.

“The fact that many companies pay tipped workers across the country $2.13 an hour is outrageous and ending taxes on tips for service and hospitality workers would significantly help millions of workers provide for their families, including in Nevada,” the union wrote in its press release endorsing Harris.

Businesses that employ tipped workers also support the plan. At least, Cruz’s plan, which would not limit the exemption by industry and income. Two of the biggest associations for the top tipped industries — the National Restaurant Association and the Professional Beauty Association — both endorsed Cruz’s proposal.

“Tipped employees are a critical part of the restaurant industry, and anything that strengthens their economic condition is a positive for them,” said Sean Kennedy, executive vice president of public affairs for the National Restaurant Association in a press release announcing Cruz’s bill. “The ‘No Tax on Tips Act’ would provide immediate tax relief for more than 2.2 million restaurant employees and their families, putting more money in their pockets at a time when we’re all feeling the squeeze of higher prices.”

Ending the subminimum wage would pack a bigger punch

During the campaign rally in Las Vegas last weekend, when Harris made her promise to end tax on tips, she also said she would raise the minimum wage. What she didn’t promise to do is eliminate the subminimum wage, which would have a bigger impact on tipped workers.

“Why not do something like raise the minimum wage if you really want to improve outcomes for tipped workers in the United States?” says Cooper.

The federal minimum wage for all workers has been $7.25 per hour since 2009. However, 30 states plus the District of Columbia have set minimum wages above that amount. Again, the federal subminimum wage is $2.13 per hour. Right now, 36 states have set minimum wages for tipped workers below the federal minimum wage of $7.25 per hour.

The tipped workers who earn the most, nationwide, are in Los Angeles ($16.78 per hour); Seattle ($17.25 per hour); and New York City, where tipped workers earn $15 per hour with the exception of delivery workers, who earn a minimum of $17.96 per hour.

Other places have eliminated the subminimum wage practice altogether. So far six states have banned subminimum wages for tipped workers, including Alaska, California, Minnesota, Montana, Oregon and Washington.

“It is outrageous that over a million workers in this country are not guaranteed a fair minimum wage in 2024,” the Culinary Union 226 wrote in a release endorsing Harris’ proposal. “Employers across the nation need to take responsibility for paying a real minimum wage and Congress must ensure it.”

Beyond raising the minimum wage, there are other levers that could be pulled to help low wage workers, experts say. That includes expanding income supports like the child tax credit, the earned income tax credit or Medicaid.

Source: nerdwallet.com

Apache is functioning normally

August 16, 2024 by Brett Tams

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:

Learn how to financially prepare for the costs of pet emergencies with firsthand experiences from pet owners and experts.

How much does emergency pet care cost? How much should you budget for unexpected pet expenses? Hosts Sean Pyles and Ronita Choudhuri-Wade discuss the unpredictable nature of pet emergencies and the importance of financial readiness to help you understand how to effectively manage unexpected veterinary costs. They begin by sharing their personal experiences and discussing the emotional toll of pet emergencies, with tips and tricks on setting up a savings account for pet expenses, considering pet insurance, and understanding the wide range of potential costs involved in emergency care. Vivien, a pet owner from Jersey City, New Jersey, also shares her story of dealing with an unexpected pet emergency.

Then, Dr. Angela Beal, a veterinarian based in Columbus, Ohio, joins Ronita to discuss strategies for financially preparing for pet emergencies. They discuss tactics for setting up a dedicated pet emergency fund, the benefits of pet insurance, and practical steps for emotionally and financially managing unexpected veterinary expenses.

Check out this episode on your favorite podcast platform, including:

NerdWallet stories related to this episode:

Episode transcript

This transcript was generated from podcast audio by an AI tool.

Sean Pyles:

Pets are wonderful. Pets are lovely. Pets are simply the best. But pets can also chew on furniture. They don’t know not to wander into traffic. They eat things that they shouldn’t, and all that can land them somewhere nobody wants to be: the emergency room.

Dr. Angela Beal:

Pet owners could expect to pay a minimum of $2,000, probably more, for an emergency situation. I think setting aside maybe $50 to $100 per month in a savings account and letting that account grow would be a good idea.

Sean Pyles:

Welcome to NerdWallet’s Smart Money podcast. I’m Sean Pyles.

Ronita Choudhuri-Wade:

And I’m Ronita Choudhuri-Wade.

Sean Pyles:

And this is episode three of our nerdy deep dive into the cost of pets. And today, Ronita, we are not all sunshine and rainbows and puppies and kittens; it’s time to talk about what to do when the worst happens to our furry family members.

Ronita Choudhuri-Wade:

This is the thing nobody wants to imagine will happen: the accident, the poisoning, or the sudden turn of health, all the things that land you at the veterinary hospital where you’re at risk of making not only healthcare decisions but financial ones too.

Sean Pyles:

I feel fortunate that in all of my years of pet ownership, I haven’t had to deal with a trip to the emergency vet, at least not yet, and I’m knocking on wood as I’m talking.

Ronita Choudhuri-Wade:

Yeah, I can’t say I’m so lucky. We had to take Mo to one of those 24/7 emergency vets after he ate something. We still have no idea what it was, but he got violently ill. He kept puking, and there was blood, and it was like eight o’clock at night. It was all really scary.

But we took him there, and the vet gave him something for dehydration that he was experiencing and then meds to solve the stomach issue. The visit was about 30 minutes, and the total cost was $666.89. We had a deductible, and then pet insurance covered the rest. It’s one of those things that felt so random within a very normal week, but frankly, you should expect or at least prepare for, because pets are, if nothing else, unpredictable.

Sean Pyles:

They are. Sometimes you get happy tail wags. Sometimes you get a large puddle of puke.

Ronita Choudhuri-Wade:

I appreciate the visual, Sean.

Sean Pyles:

Hey, it is a favorite activity of many cats, Argus included. He has a weekly puke at this point, so that’s always a fun surprise whenever we find it. So for those who are wondering what it might cost to get emergency care for your beloved pets, well, it varies widely depending on the species, your location, and the type of emergency.

It’s really hard to generalize. But WebMD says for a large dog, it can be anywhere from 80 bucks for a simple blood test to $5,000 for emergency surgery. No doubt it’s possible to go well beyond that if it’s some sort of catastrophic emergency like getting hit by a car.

Ronita Choudhuri-Wade:

Yeah, it can be a whole lot of money, which sometimes doesn’t seem fair. You may call it a pet peeve.

Sean Pyles:

I see what you did there, Ronita. Yeah, when pets can cost as much as treating humans, well, I guess that’s why a lot of us consider them irreplaceable family members. And the costs keep going up too. The Bureau of Labor Statistics tracks what we spend on veterinary care, and the price of vet services in urban areas rose 6.4% from June of 2023 to June of this year.

Ronita Choudhuri-Wade:

And that’s some inflation right there.

Sean Pyles:

Certainly is. Earlier this year, USA Today released a report that found 91% of 1,000 dog owners they surveyed said they’d experienced some degree of financial stress in the past year related to the cost of pet care. Sixty-six percent of them said that they’ve cut back on personal spending because of that expense.

Ronita Choudhuri-Wade:

I know I would. So it really is so important to go through the worst-case scenario exercise for a reality check on how you would deal with that kind of unexpected situation. Could you afford it if your pet had a major emergency? How would you deal with it? Do you have a number in your head for what you’re willing to spend? All really critical questions when it comes to care for your furry and scaly family members.

Sean Pyles:

I appreciate the shout-out to Ozzie, the Gecko, who fortunately has not had any emergencies in has 22 years of straight chilling. All right, listeners, we want you to bark and meow at us with your stories about your pets and what it takes to keep them in kibble. What are you sacrificing in your budget to have an animal?

We want to hear any and all pet stories over the course of this series. So to share them, leave us a voicemail or text the Nerd hotline at 901-730-6373. That’s 901-730-N-E-R-D. Or email a voice memo to [email protected]. And if you have audio of your pets, all the better. So Ronita, where do we start today?

Ronita Choudhuri-Wade:

Well, first we’re going to hear from Vivien Schweitzer, a journalist and pianist from Jersey City, New Jersey. She and her partner recently had firsthand experience with a pet emergency, and she’s sharing her story with us. Hey, Vivien, welcome to the Smart Money podcast.

Vivien Schweitzer:

Thank you. Great to be here.

Ronita Choudhuri-Wade:

Today we are talking about something that’s a little bit difficult. It’s pet emergencies, and I know that’s something that you’ve gone through.

Vivien Schweitzer:

So my husband and I had been talking about getting either a cat or a dog for a long time, and a friend of ours said to us, okay, so I have a feral cat who’s just had kittens. Are you serious about getting pets because if so, I have to give away some cats? And this was last summer, so 2023. So we adopted two adorable kittens who were then three months old and brought them home, and they’re called Idris and Deshani.

Ronita Choudhuri-Wade:

Why don’t you tell us what happened to Idris?

Vivien Schweitzer:

We were trying to get them spayed and neutered ASAP. After we did that, the place that we got them spayed and neutered said that Idris had a little hernia, and we needed to get that taken care of immediately. So it wasn’t an emergency in the sense of they’d swallowed a bottle of pills or poison or something like that, but it was something that we needed to fix.

Ronita Choudhuri-Wade:

How old was he again? Three months when this happened?

Vivien Schweitzer:

Yeah, I think about four months when this happened. So he was still pretty small.

Ronita Choudhuri-Wade:

Can you walk us through what happened next?

Vivien Schweitzer:

So we’d taken them to this amazing place called People For Animals Affordable Veterinary Care For All. And I’d found them in part because I’d called so many vets just to get a quote for the spay and neuter procedure, and no one could tell me how much it would cost or even give a ballpark figure, which I found really odd and surprising because it’s such a routine procedure.

It was surprisingly opaque, almost like the human healthcare system where you just cannot get a ballpark figure for a really basic procedure. So we found this amazing place, and the reason we didn’t take them back to this place is because although they were fantastic and so reasonably priced, because it’s so reasonably priced, there’s a long wait line. So at that point, we just decided to find a private vet that was closer.

Ronita Choudhuri-Wade:

Did he have any symptoms or was there anything going on like that, was he suffering at all, or was it something more preventative?

Vivien Schweitzer:

It was one of those, it’s kind of preventative, but you really need to do it so that the hernia doesn’t explode or something like that. So again, I think it wasn’t an emergency in the type of sense that you’re rushing them to the 24-hour vet because they’ve swallowed something. But it was more the not knowing what would happen if we didn’t. I think it was one of those you need to get this taken care of so nothing worse happens.

Ronita Choudhuri-Wade:

So then what happened next?

Vivien Schweitzer:

I called around a lot of places, and I was just trying to get a ballpark figure, which was really difficult. And then I found this new vet, women-run, and I liked that too. And they gave us a quote upfront with a minimum cost and the maximum cost, which I really appreciated, and they fit him right in. So we ended up taking him there.

Ronita Choudhuri-Wade:

And so what were those minimum and maximum costs you were given?

Vivien Schweitzer:

So the low estimate was $736, and the high estimate was $874, and they broke down the cost in between that as well.

Ronita Choudhuri-Wade:

Talk me through your emotions during this process, what you thought initially as you went through it and then at the end. And we’re guessing that Idris is fine now, right?

Vivien Schweitzer:

Happy to report, he’s totally fine. Well, I actually felt a little bit guilty at first because, as it turned out, if I had taken him to one of the private clinics, when they were doing the pre-op assessment, they probably would’ve seen that he’d had a hernia and then they could have done the hernia at the same time as they’d done the spay procedure.

But as it turned out, he had to go through the spay procedure and go under the anesthetic, and then three weeks later, he had to go under another anesthetic for the hernia operation. So I actually felt a little bit bad that I’d put him through essentially two surgeries within three weeks.

But I think a lot of the communication isn’t great, and these places tell you they need to do an assessment before the spay neuter, but it’s not really communicated why that is. And if someone had said to me we need to do an assessment first and then we’ll be able to tell you how much it is because, for example, it’s very common for kittens to have a hernia. And if that’s the case, we’ll do both.

All it seemed to me, as the person shopping around for a vet, was it was just very confusing and poorly communicated, but I figured that was better than riding it out to see what happened.

Ronita Choudhuri-Wade:

And hopefully, he doesn’t remember any of it now.

Vivien Schweitzer:

Hopefully not. No.

Ronita Choudhuri-Wade:

Since this is the Smart Money podcast, I did want to come back to the financials. So you paid between $700 and $850. How did you manage to cover the costs?

Vivien Schweitzer:

We put it on a credit card.

Ronita Choudhuri-Wade:

And did you have pet insurance? Is that anything you’ve ever considered?

Vivien Schweitzer:

We don’t have it at the moment, and our reasoning is that they’re still so young and that they don’t go outside. I think in a couple of years we’ll probably end up getting pet insurance just because it’s obviously more likely that they’re going to have some issues, but I also realize that in the meantime they could swallow something, so we might change our mind on that and get pet insurance.

Ronita Choudhuri-Wade:

How did you feel about putting it on a credit card? Was it just more of like, okay, this is convenient, let’s put it on there, or were you just thinking ahead of time pet costs are going to go on the card?

Vivien Schweitzer:

We actually just put a lot of stuff on the card anyway, we get points and what have you, and it’s such a fairly big chunk of change, so that tends to go on the credit card. And I think that was also the thing with the spay neuter. I think with two cats, it was going to be like $2,000 to get both of them if we hadn’t found the discount place.

Ronita Choudhuri-Wade:

Yeah. And so was there any other aftercare required? Did they need any medications, anything like that?

Vivien Schweitzer:

Fortunately, they didn’t. I think he just had a few pain meds, but nothing serious.

Ronita Choudhuri-Wade:

Have you made any changes to how you think about paying for pet expenses, emergency or not?

Vivien Schweitzer:

I’ll definitely still put stuff on a credit card, and I would definitely advise any friends who are considering getting pets also to just shop around for a vet who’s willing to be as upfront as possible with the costs, because I think some vets are, like this vet gave us a very detailed budget summary of minimum and maximum, and that made the process a lot less stressful because you’re not going to get hit with the equivalent of a human surprise billing thing.

Ronita Choudhuri-Wade:

Well, that’s wonderful and we’re so happy to hear Idris is perfectly fine now. I’m going to guess he’s a happy cat and not torturing his sister.

Vivien Schweitzer:

Yes, a very happy and very needy but happy cat.

Ronita Choudhuri-Wade:

Well, Vivien, thank you so much for joining us today and sharing a bit about your pets and your experience with paying for an unexpected expense.

Vivien Schweitzer:

Great. Well, thank you so much for having me.

Sean Pyles:

First off, I’m glad to hear that Vivien’s cats are doing okay. Her story really exemplifies how random pet emergency expenses can be. It does seem like they were smart about how they shopped around for their vet care, though. I’m hoping they were able to pay off that credit card balance quickly, ideally before they paid any interest on their debt, because we know how expensive credit card debt can be and how difficult it can be to get out of it once you’re in it.

Ronita Choudhuri-Wade:

Totally. What I thought was interesting, and something I think a lot of us can relate to, is this idea of looking for something slightly cheaper, but that in the end can actually end up costing more. And a lot of it is about knowing.

If she had known about the potential of a hernia issue, I’m sure Vivien would’ve known to go to a vet, but since they didn’t, the kitty had to have another surgery to remove the hernia in addition to the neutering when it all could have been done at once.

Sean Pyles:

Well, clearly, as we’ve already noted, it is just so, so important to at least think about what you would do if the worst happened and you needed to take your pet to the emergency vet. Even better, set aside some money or, as we’ve talked about in the last episode, consider pet insurance.

Ronita Choudhuri-Wade:

Yeah, I will tell you we were really glad to have it when Mo ended up at emergency care. So next, we’re going to hear from Dr. Angela Beal. She’s a veterinarian based in Columbus, Ohio, and has done a lot of writing about pet care and the veterinary industry. We’re going to hear her recommendations for preparing your finances for if and when you need to get emergency care for your furry family member.

Sean Pyles:

That’s coming up in a moment. Stay with us.

Ronita Choudhuri-Wade:

Dr. Beal, thanks so much for joining us today on the Smart Money podcast.

Dr. Angela Beal:

Thanks, Ronita. I’m happy to be here.

Ronita Choudhuri-Wade:

So we’re talking today about emergency pet care, those unexpected expenses that can come up regardless of how well you take care of your fur babies. In your opinion, why is it so crucial for pet owners to be prepared for unexpected veterinary expenses?

Dr. Angela Beal:

Studies have shown that unexpected expenses are a major stress for pet owners, and as little as actually a $250 bill that’s unexpected can result in really difficult decisions for pet owners. So if a pet owner is not financially prepared, they may not be able to choose the best care for their pet. They may have to opt for second, third, fourth-tier care and maybe just the basics. And in worst-case scenarios, a pet may need to be euthanized because the pet owner doesn’t have the funds for their care.

Ronita Choudhuri-Wade:

So Dr. Beal, why do you think it’s so hard to plan for these expenses, and why do you think many people put off putting savings aside or creating a plan?

Dr. Angela Beal:

I think if people have not experienced a pet emergency before, they may not realize how significant that event can be and how stressful it can be. Statistics show though that the majority of pets will experience some sort of emergency during their lifetime, and I think people probably don’t realize just how common pet emergencies are.

These types of things aren’t happy thoughts, so I think we tend to focus on the good things and the good times with our pets. So we may not necessarily want to think about disaster situations, although that kind of thinking and preparation really is important.

Ronita Choudhuri-Wade:

Can you share some common pet emergencies that can result in significant vet bills?

Dr. Angela Beal:

Sure. Toxicity is a big one. Pets like to get into all kinds of things. They may eat something that’s toxic. Certainly, hit-by-car accidents are quite common with both dogs and cats, broken bones and other sorts of trauma. Even a fight, two dogs fight, and you have significant injuries from that.

And then going over to the medical scene, those are traumatic situations, but over on the medical side of things, a lot of diseases, kidney disease, for example, are very silent and don’t cause a lot of clinical signs until it gets really bad, and then all of a sudden, you have a medical emergency on your hands. And at that point, the disease has progressed quite a bit, and treatment is going to be a significant expense.

Ronita Choudhuri-Wade:

If a pet parent doesn’t prepare, how much more difficult does that make the decisions around what care to say yes to?

Dr. Angela Beal:

I think it makes it very difficult. A pet owner who is prepared can focus on their pet and making sure they get the care they need. If a pet owner is not prepared, then their focus shifts to having to decide what diagnostics can I afford, what treatments can I afford? And it all becomes about the money. They’re focused on their pet as a secondary thought, unfortunately, although everyone would much rather be focusing on their pet.

Ronita Choudhuri-Wade:

In our previous episode, our guest talked about economic euthanasia, the idea that you have to let a pet go because you can’t afford to help it. You touched on this earlier as well. What are some practical tips for pet owners to start saving for potential emergency vet care so they don’t face that kind of decision?

Dr. Angela Beal:

I think ideally, the best-case scenario is that you have a pet savings account that you set up yourself. You budget a certain amount every month and put it into a savings account so that money is there and it’s ready if and when you need it. Other options include pet insurance, very similar to human health insurance. And so that can be a nice safety net for people.

And then another option that can even be combined with the other options is having a healthcare credit card. CareCredit is one that’s very popular in the veterinary world. This is a healthcare-specific credit card, and a lot of people will even pair it with pet health insurance. They can cover the initial bill, the credit card, and then be reimbursed by their pet insurance company and turn around and pay off that credit card bill quickly.

Ronita Choudhuri-Wade:

When you talked about the savings account, what would you suggest or what are your tips on how much to save? And we know that age, breed, of course, type of pet can make a difference, but what are your tips for how pet owners should research how much they should put aside?

Dr. Angela Beal:

I think a good place to start would be with actually the pet insurance company websites. A lot of these websites will list costs for certain types of pet emergencies, and that could give you an idea of how much a particular pet emergency would cost.

I would say just off the top of my head that with rising veterinary costs over the last several years, a pet owner could expect to pay a minimum of $2,000, probably more, for an emergency situation. So I think setting aside maybe $50 to $100 per month in a savings account and letting that account grow would be a good idea.

Ronita Choudhuri-Wade:

I know that when Mo ate something strange, again, what it is, we still do not know. I think that vet bill, just that one instance, was close to $1,000 straight away. He didn’t need very much as far as getting better or anything like that. They gave him something to pass through his system, and then he was fine, but it was just straight away a thousand bucks.

Dr. Angela Beal:

Right. And if you’re talking about a situation where a pet requires several days of hospitalization or intensive care, you can see how that bill would increase significantly.

Ronita Choudhuri-Wade:

Absolutely. What would be your advice on how pet owners can put the money aside? Would you suggest putting it in a separate account, like a separate savings account? Any other ways to structure it?

Dr. Angela Beal:

I would suggest that a pet owner has a separate savings account that is earmarked specifically for their pet’s emergency care. That way, the money doesn’t just get lumped in with everything else and potentially spent, and then it’s not there when you need it.

The other thing I would mention is that when we talk about an emergency savings account, I really would earmark that just for emergency situations. So routine veterinary care like vaccines and parasite prevention, things like that, should not come out of this fund. This fund should be specifically set aside for emergencies only.

Ronita Choudhuri-Wade:

Do you know of any financial assistance programs or organizations that can help pet owners with emergency vet bills?

Dr. Angela Beal:

There are a number of organizations that are set up to help pet owners with vet bills, especially emergencies. I will say most of them are fairly small and potentially connected with local shelters and things like that. Most of them require an application process, which can become really challenging and difficult.

If you’re a pet owner and you are in an emergency hospital with your pet right now and your pet needs care fairly quickly, it would be challenging to have to take time to go through that process. I don’t think a lot of them are probably the best option for pet owners. And again, most of them are small organizations and can only help a small number of pet owners.

Ronita Choudhuri-Wade:

What advice do you have for pet owners who are struggling to find room in their budget for emergency savings?

Dr. Angela Beal:

For those pet owners, I would say that whatever they can set aside is better than nothing. They could also consider an accident-only pet insurance policy, which are the cheapest pet insurance policies, and most companies provide them for around $20 per month or maybe a little more, but that’s pretty affordable for most people.

And that type of policy does not typically increase in price with age. So policies that cover illnesses, the cost of those policies increases significantly as pets age and their likelihood of becoming ill increases. But the accident-only policies typically don’t increase with age.

The other one I mentioned, the healthcare credit card, is another option. Obviously, then you’re paying interest, which is not ideal, but it can be an option to help you deal with an emergency situation.

Ronita Choudhuri-Wade:

And while we have spoken a lot about the financial aspect of emergency situations, do you have any advice for how to deal with the emotional side of something happening suddenly and taking your pet to the vet and then dealing with bills?

Dr. Angela Beal:

Going along with what we’ve talked about, I think again, being financially prepared can take a huge burden off of pet owners. When the pet owner is stuck thinking about how on earth they’re going to pay for this emergency care, that’s incredibly stressful on top of the stress of worrying about your pet and how they’re going to handle the emergency.

So if you can take away that piece, if you can be financially prepared and not have the stress of worrying about how you’re going to pay for that, I think that would help pet owners tremendously.

Ronita Choudhuri-Wade:

Any final thoughts for our listeners on how they can prepare both emotionally and financially for the possibility of their pet needing emergency care?

Dr. Angela Beal:

I think proactively providing excellent care throughout your pet’s life. I realize we’re talking about if we have an emergency, but trying to prevent emergencies before they happen, of course, is always better. So just keeping on top of your pet’s care, making sure they see their vet annually, at least, for checkups and wellness care like vaccines and parasite preventives that can help them avoid emergency situations, is certainly the best situation.

And then on top of that, I think having a good support system in place and maybe even a plan, and no one wants to think about what will I do in an emergency, but just having a plan in mind about how you will take care of that emergency if it happens, know where your local emergency hospital is and know their phone number and how to get your pet there if an emergency arises, so you are not scrambling in those moments any more than would be expected.

Ronita Choudhuri-Wade:

Dr. Beal, thanks so much for joining us today on Smart Money podcast. This is incredibly helpful.

Dr. Angela Beal:

Thank you for having me.

Ronita Choudhuri-Wade:

You know, Sean, I took away a lot of advice from talking to Dr. Beal, and it got me thinking about how important it is to know your options and resources, especially before Mo randomly starts puking on the floor.

Sean Pyles:

Ronita Choudhuri-Wade:

I remember we were frantically Googling that evening, and if we had known where the emergency vet was beforehand, we could have saved time and maybe even had more of a choice of where we could take him, on top of knowing how to exactly pay for the upcoming bill.

Sean Pyles:

Yeah. If listeners take away just one thing from this episode, it should be Dr. Beal’s point about just having some plan, any kind of plan, for a pet emergency. Even setting aside $10 a week into a high yield savings account would put you in a better place than burying your head in your cozy companion’s fur and ignoring the possibility of a crisis. And as Vivien’s story makes clear, this is important no matter the age of your pet.

Ronita Choudhuri-Wade:

So Sean, we’ve spent this episode talking about something that, as we said earlier, nobody really wants to think or talk about, which is their pet having some sort of emergency, but there’s another aspect of pet ownership that is even more difficult.

Sean Pyles:

Yeah, I think I know where you’re going with this. End-of-life issues for our pets are incredibly emotional and hard to deal with, and they can involve a lot of discussions about money. What are we willing to spend to extend their lives even just one more day?

Ronita Choudhuri-Wade:

Honestly, it’s something I don’t even want to think about. Mo is my best friend, and he’s with me here all day. How do you put a price on the life of a pet? That is just pure agony. I know it’s coming one day; I just don’t even want to think about it.

In our next and final episode, we are going to talk about those decisions, how we make them, how we afford them, and how to know what’s best for our animals. And I’ll hope not to cry.

Dr. Fiona McCord:

So what I want and what I want a client to see is that they have a pet who experiences the best possible quality of life for as long as possible. But when that quality falls lower, then we make the right decisions to make sure they get to leave this earth in the arms of their owner or eating a cheeseburger.

Sean Pyles:

For now, that’s all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-N-E-R-D. You can also email us at [email protected]. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

Ronita Choudhuri-Wade:

This episode was produced by Tess Vigeland. Sean helped with editing. Kim Lowe helped with fact-checking, and a big thank you to NerdWallet’s editors for all their help.

Sean Pyles:

Here’s our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

Ronita Choudhuri-Wade:

And with that said, until next time, turn to the Nerds.

Source: nerdwallet.com

Apache is functioning normally

August 15, 2024 by Brett Tams

Wading through unnecessary paperwork is no one’s idea of a good time. Same goes for being forced to hear a dreaded loop of Muzak while waiting on hold for what feels like eternity.

In the hopes of removing some of the suffering from the pain of customer service interactions, the Biden administration announced a new bundle of government-wide actions today nicknamed “Time Is Money.” The administration says the hassles that Americans face are often designed to deter people from activities that could hurt a company’s bottom line, such as refunds or subscription cancellations.

“This work came from scores of conversations with people — consumer advocates and others — about practices that are really designed to get people crazy and, honestly, they’re really designed for you to give up.” says Neera Tanden, director of the Domestic Policy Council of the United States.

During his presidency, Biden has addressed a bevy of corporate-instituted annoyances that everyday Americans face, including things like junk fees. These new actions also provide a glimpse into what areas of consumer protection Vice President Kamala Harris is likely to emphasize on the campaign trail.

The consumer pain points that the administration is targeting include things most people have encountered such as chatbots, doom loop phone menus, fake reviews and enigmatic subscription cancellation practices.

But first, a caveat: When the White House announces any “actions,” it can take a long time to actually happen. Certain actions might require movement through regulatory processes, other agencies or Congress. Businesses may have perfected red tape, but the government invented it.

Stop “doom loops” and connect consumers to humans

The pipeline from consumer-to-human representative is often littered with unhelpful robotic menus that don’t recognize when you’re helplessly yelling “customer service” into the receiver.

“I myself have had experiences where you call and the thing you need is not in the recommended options,” says Tanden. “And then you hit a button that sounds like it’s close — like it could get you access to a human — but it’s not close. And they keep just giving you the same list over and over again. What that’s fundamentally doing is wasting your time in order to make it difficult to realize the choice that you want.”

To combat this frustrating experience, the Consumer Financial Protection Bureau (CFPB) is expected to create a rule that would require companies it oversees — such as banks and lenders — to streamline connecting consumers with human customer service agents.

The Federal Communications Commission (FCC) is considering requiring the same of phone, broadband and cable companies. The Health and Human Services department and Department of Labor are also expected to call on health plan providers to improve this path.

Simplify subscription and membership cancellation practices

The Federal Trade Commission (FTC) proposed a rule that would require companies to make a subscription or membership cancellation as easy as it was to sign up.

The “click to cancel” proposal was first made in March 2023 and is still in the “rulemaking” process, which Tanden says should be completed sometime in the fall. This action doesn’t require congressional approval.

Stop companies from masking bad reviews or creating fake ones

The FTC has also proposed a rule that would ban marketers from deceptive review practices, including suppressing honest negative reviews and propping up fake positive reviews. This rule was proposed in June 2023 and is in the rulemaking process.

Crackdown on customer service chatbots and A.I.

The CFPB is expected to issue rules or guidance against using automated chatbots or artificial intelligence voice recordings as customer service in scenarios when people are led to believe they’re communicating with a person.

Improve health care coverage customer service

The HHS and the DOL are both calling on health insurance companies “to take concrete actions to save people time and money when interacting with their health coverage,” according to a White House press statement. That proposal is as opaque as the next promise that these departments will identify additional ways to improve how the health care system interacts with people.

Tanden says one practice the Office of Personnel Management wants to address is making it easier to submit paperwork online rather than through mail or fax. “Some people don’t really have access to a fax machine,” says Tanden. “These practices really do seem designed to make it difficult to get prior authorization or claim a particular benefit.”

The Office of Personnel Management is also planning to require all federal and postal service health benefit plans to simplify submitting out-of-network claims online, finding information on appealing claim denials and help people figure out which providers are in-network.

Require airlines to provide automatic cash refunds

The Department of Transportation now requires airlines to pay customers back the airfare when a flight is canceled or changed significantly for any reason. A passenger would be entitled to a refund if they do not rebook a flight. All refunds must be automatic. This rule was announced in April and will be implemented soon, according to Tanden.

Streamline communications between parents and schools

The Department of Education is expected to issue guidance to schools to make it simpler and less time-intensive for parents and schools to do things like communicating with teachers and completing required forms and permission slips. It’s unclear what this guidance would look like, but the White House says it would “include new resources for schools to address time-wasting technology and offer more streamlined processes for engaging and communicating with parents.”

What’s next?

Tanden says the administration is hoping to do more to ensure consumer choices “drive the market” and prevent companies from gaming the system at the expense of consumers.
The White House is soliciting suggestions from Americans for how they’d like consumer service to better serve them including things like how refunds are delivered; dealing with human agents instead of robots; canceling subscriptions more easily; and how technological features can actually make their lives easier. You can submit your suggestions here.

(Photo by Jessica McGowan/Getty Images News via Getty Images)

Source: nerdwallet.com

Apache is functioning normally

August 12, 2024 by Brett Tams

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:

Learn to navigate pet insurance options, costs, and smart budgeting strategies for your pet’s health care.

Is pet insurance worth it? How can pet owners afford the rising costs of veterinary care? Hosts Sean Pyles and Ronita Choudhuri-Wade discuss the ins and outs of pet insurance and various budgeting strategies to help you manage pet care expenses effectively. They begin with a discussion of the importance of pet insurance amidst escalating vet bills, with tips and tricks on the potential financial benefits of pet insurance, the low adoption rate of pet insurance in the US, and interesting trivia like the first US pet insurance policy issued for Lassie. Then, NerdWallet pet insurance expert Sarah Schlichter joins Sean and Ronita to discuss the basics of pet insurance. They discuss the different types of pet insurance plans available, common misconceptions about pet insurance, and other critical factors to consider, such as deductibles, co-pays, and policy exclusions. Plus: potential hidden fees and the nuances of claim payouts, key features to look for when comparing providers, and alternative financial strategies such as vet subscription services.

Check out this episode on your favorite podcast platform, including:

NerdWallet stories related to this episode:

Have a money question? Text or call us at 901-730-6373. Or you can email us at [email protected].

Episode transcript

This transcript was generated from podcast audio by an AI tool.

Sean Pyles:

You know you need to insure your health. You know you need to insure your car and your house. But what about your four-legged family members? Is there actual value in pet insurance?

Sarah Schlichter:

These days, there are so many advanced treatment options out there for animals to help them extend their lives, but not everyone has the budget to take advantage of those, and so pet insurance can help with that and really spare your family a heart-wrenching decision about how much treatment you can afford to try.

Sean Pyles:

Welcome to NerdWallet’s Smart Money podcast. I’m Sean Pyles.

Ronita Choudhuri-Wade:

And I’m Ronita Choudhuri-Wade.

Sean Pyles:

This is episode two of our nerdy deep dive into the cost of pet ownership. Last time we walked you through some of the financial considerations before deciding to buy or adopt a pet, and one of the potentially significant expenses is those trips to the vet.

Ronita Choudhuri-Wade:

Yeah. You never know when your dog is going to find something on the sidewalk and decide to eat it, and I am looking at you, Mo. Or your cat decides to jettison one of its nine lives, run up a tree, and somehow not land on its feet coming down. I don’t know. Does that happen?

Sean Pyles:

It could happen. I’m sure it does every day somewhere in the world. But even routine checkups at the vet can be pricey. Immunizations aren’t free. Then, maybe your pet pal needs some special prescription food or medication. Enter pet insurance.

Ronita Choudhuri-Wade:

Yeah, this is a big question for a lot of people. Is pet insurance worth it? And how do I know if a plan is a good one?

Sean Pyles:

I think I just heard Mo in the background.

Ronita Choudhuri-Wade:

Mo has thoughts on pet insurance as well.

Sean Pyles:

Of course. I hope it’s not as complicated as human health insurance, at least in this country.

Ronita Choudhuri-Wade:

Not quite. But there definitely are options that you’ll want to look at and consider before deciding to go with pet insurance, and we’re going to explore those today. Do you have pet insurance, Sean?

Sean Pyles:

I do not. Though, I do have a membership to a vet care service that provides essentially preventative care. I pay around $70 a month for my dog Pepper and closer to $50 for my cat Argus. The price is kind of steep, but both pets have garbage teeth and need annual cleanings, which is included in my membership. I don’t know. I guess it’s kind of worth it. But I do always wonder whether I should switch to pet insurance, especially before my pets develop some preexisting condition that insurance wouldn’t cover. What about you, Ronita? Do you have insurance for Mo?

Ronita Choudhuri-Wade:

So we do. Mo has a lot to say. He’s happy with his pet insurance. We knew we were getting a terrier, and there’s a lot of energy, there’s a lot of curiosity, so we thought we’d look into it sooner, basically as soon as we decided to get Mr. Mo. But really what helped us decide on pet insurance is that my husband’s work provided a discounted premium rate, and that, the money, and the costs, and the discounted rate essentially cinched the deal for us. But while almost 87 million households owned a pet in the U.S. in 2023, only 5.7 million pets were insured, according to the Insurance Information Institute. And those pet owners paid $3.9 billion in premiums. And dogs are insured far more than cats. It’s almost 80 to 20%. Do you want some more pet insurance trivia, Sean?

Sean Pyles:

Oh, yeah. I’m all about the pet trivia.

Ronita Choudhuri-Wade:

Okay. Fun fact, the very first pet insurance policy issued in the U.S. was back in 1982 for Lassie, the actual TV star Lassie.

Sean Pyles:

Wow. I mean, why wouldn’t you? You do have to protect the talent after all. Also, additional fun fact about Lassie, she has a star on the Hollywood Walk of Fame. All right. Well, listeners, we want you to bark and meow at us with your stories about your pets and what it takes to keep them in kibble. What are you sacrificing in your budget to have an animal? Do you have pet insurance? We want to hear any and all pet stories over the course of this series. To share them, leave us a voicemail or text the Nerd hotline at (901) 730-6373. That’s (901) 730-NERD. Or email a voice memo to [email protected]. And if you have any audio of your pets, all the better. Ronita, where do we start today?

Ronita Choudhuri-Wade:

Today we’re talking with fellow Nerd Sarah Schlichter, who is an expert in all things pet insurance.

Sean Pyles:

That’s coming up next. Stay with us.

Ronita Choudhuri-Wade:

Sarah Schlichter, welcome to the Smart Money podcast.

Sarah Schlichter:

Hi, Ronita. Thanks so much for having me.

Ronita Choudhuri-Wade:

We’re very happy to have you here. Now, first question, do you have any fur babies?

Sarah Schlichter:

Yes, I do. I have a rescue lab named Sylvie. She’s very sweet. She’s actually sleeping on the sofa behind me, and so hopefully we don’t get any deliveries and she doesn’t bark through the interview.

Ronita Choudhuri-Wade:

Oh, I love that name, Sylvie. That’s cute. We have you on because you are our NerdWallet pet insurance expert. So let’s start from the beginning. And just tell us, what is pet insurance, and how does it work?

Sarah Schlichter:

Pet insurance is a bit like human health insurance in some ways. It can help you pay your vet bills if your pet gets sick or hurt. Like human health insurance, it often has deductibles and copays. So you should know it’s not going to pay 100% of your pet’s medical expenses, but it can come in handy if something major goes wrong, like God forbid your dog gets hit by a car and needs surgery or something like that. But there are a few key differences between human health insurance and pet insurance. One nice thing about the pet version is that there’s usually no in-network or out-of-network stuff. With most plans, you can just take your pet to any licensed vet. That’s nice. But not as nice is that you’ll generally have to pay the full bill up front and then submit the receipt to your insurance company for reimbursement. There are a small handful of pet insurance companies out there that can pay your vet directly, but in most cases you’ll initially have to foot that bill.

Ronita Choudhuri-Wade:

Can you explain the different types of pet insurance plans available?

Sarah Schlichter:

Sure. The most common type of pet insurance plan in the U.S. is called accident and illness insurance, and it’s just what it sounds like. It’ll reimburse you if your pet is accidentally injured or if your pet gets sick. There is another alternative that’s cheaper and also less common, and it’s called an accident-only plan. That can cover things like a broken leg or a snake bite, but it’s not going to help you if your pet gets cancer, diabetes, allergies, basically any illness. Neither of these plans is going to pay for routine care, so they’re not going to reimburse you for your pet’s annual checkup or a rabies vaccine or even a spay or neuter surgery. Some folks think it’ll cover that, but it won’t. So if you do want those things covered, you want to look for a wellness or preventive care plan, which many companies will let you add to an accident and illness plan. These work a little bit differently. They usually have set reimbursement levels for certain services, so they might pay you up to $50 for a checkup or up to $150 toward your dental cleaning.

Ronita Choudhuri-Wade:

What are some common misconceptions people have about pet insurance?

Sarah Schlichter:

One big one is that you can wait to buy the pet insurance until something goes wrong. For example, say you discover a lump on your dog’s side. You take him to the vet, and unfortunately it’s cancerous and the vet said he needs surgery. You might think, “All right. Well, I’ll just buy pet insurance to pay for the surgery.” Unfortunately, insurance is almost never going to cover problems that your pet had before you bought the policy. These are known as pre-existing conditions. You’ll see them excluded on just about every plan. For the dog that has the cancerous lump, you can still buy pet insurance and it’ll pay for any new problems in the future, but it’s not going to pay for that surgery.

Ronita Choudhuri-Wade:

Sarah Schlichter:

Yeah, that’s right. In addition to pre-existing conditions, there are usually a lot of other exclusions in a pet insurance plan. Some companies don’t cover your exam fees. Say your cat’s throwing up, you bring her in, and the vet gives her some medicine and IV fluids. That plan would pay for the medicine and the fluids, but it wouldn’t pay for the vet’s actual examination fee. Other things that sometimes aren’t covered are prescription food and supplements. There’s also a lot of variation in the way insurance companies cover tooth issues and dental disease. I hate to say this, no one likes to hear this, but you really do need to read the policy because all the details are in there. The nice thing is that most pet insurers offer sample plans on their websites that you can read through before you buy. And if you’re confused, a lot of companies you can either call or even live chat, and they should be able to answer your questions so you don’t buy something you don’t understand.

Ronita Choudhuri-Wade:

Yeah, that’s a good tip. I remember with Mo, when he ate something… What he ate we still have no idea. But he ate something, and then we had to take him to an emergency vet. My husband and I were scrolling through the policy in this kind of high-stress moment trying to figure out what is covered and what’s not. On that point, Sarah, what are some factors that pet owners should consider when deciding if pet insurance is right for them and their pets?

Sarah Schlichter:

The first thing I would suggest is looking at your budget and being honest about whether you’d be able to handle a big emergency vet bill. If your dog needs a $2,500 surgery, could you pay for it or would you end up going in debt? If paying for something like that would be a financial hardship for you, then pet insurance might be a good safety net. Then, you also want to consider your own personal comfort level with risk. The tricky thing about deciding whether to buy insurance is that we don’t know the future. You don’t know whether your new kitten is going to be healthy for his whole life or if he’ll end up developing some expensive chronic issue that you have to keep paying for.

Ronita Choudhuri-Wade:

Right. And what if your pet is mostly healthy?

Sarah Schlichter:

Well, in that case, you could end up paying thousands of dollars for insurance and really not getting much in return. For most of us, it’s not appealing, but some people would not want to buy pet insurance because of that. You might want to just set up a savings account, a dedicated high-yield savings account specifically for pet expenses. That way the money is there if you need it, but you can spend it on other things if your pet never has any major issues. But on the other hand, for some people, having pet insurance can really give them peace of mind. You may never need the insurance, but at least you know you’re not going to have to agonize over whether you have enough money to give your pet the best possible care.

Ronita Choudhuri-Wade:

When we got pet insurance, it was really about that, just having that sense of security. Especially with Mo, because he’s a terrier, right? He is a toy fox terrier, but he’s a terrier, so he jumps and is very active. We just knew that there’s a high chance he might knock into something, eat something, do something with himself, and so that’s why we decided to get pet insurance. On that topic, how could age, breed, and health condition of a pet influence the decision?

Sarah Schlichter:

Well, if you’ve got a young healthy pet, that’s when you’re going to find the most affordable rates. It’s going to be cheaper then. Also, your pet probably isn’t going to have any pre-existing conditions yet, and so that can also make pet insurance more appealing because most things should be covered. For someone with an older pet, especially one who already has a chronic condition, I don’t know, kidney disease, or arthritis, or whatever it might be, insurance is not going to help with whatever they already have. Then, the other problem is for older pets, the monthly cost of insurance can be quite steep. You may decide that it’s just not worth it to you at that point. You’ll just go ahead and keep paying the bills yourself. Then besides age, the type of animal that you have, kind of like what you just said, that can affect how much you pay for insurance and even whether you want insurance. As a general rule, cats are usually cheaper to insure than dogs are. Bigger dogs usually cost a little bit more than smaller ones. But there are certain breeds that tend to have higher rates. One example is a French bulldog. They’re kind of famous for their breathing problems, and that can get kind of expensive. And just in general, the more expensive animals to insure tend to be the ones more likely to need medical care. And that makes sense, right? That’s why insurance companies charge more because they’re higher risk. You’ll just want to weigh that when you’re deciding whether to buy insurance. You may decide, “Insurance for my Frenchie, it’s too expensive. But I know she’s got higher risks, so I’m going to set aside more in savings to self-fund just in case she runs into these problems that the breed is known to have.”

Ronita Choudhuri-Wade:

What are some scenarios where pet insurance would be especially beneficial?

Sarah Schlichter:

One terrible thing I’ve heard about from the vets that I’ve talked to is economic euthanasia. That’s when people have to have their pets put down, even though treatment is available, but they can’t afford it. That’s probably the biggest thing that pet insurance could help prevent. I mean, these days there are so many advanced treatment options out there for animals to help them extend their lives, but not everyone has the budget to take advantage of those. Pet insurance can help with that and really spare your family a heart-wrenching decision about how much treatment you can afford to try. Then, the other scenario really is an emergency, like you were talking about earlier. I mean, most of us don’t plan for our dog to swallow a sock or tear a ligament or whatever, but it happens, sometimes at the worst possible time for you financially. So, insurance can just reduce that unexpected financial hit.

Ronita Choudhuri-Wade:

I see. All right. Let’s get to brass tacks here. What are some typical costs associated with pet insurance?

Sarah Schlichter:

The average cost of accident and illness insurance in the U.S. is about $56 a month for dogs and $32 a month for cats. That’s data from an industry organization called the North American Pet Health Insurance Association. If you want just the accident-only coverage, it’s much cheaper. It averages about $17 a month for dogs and $10 a month for cats. But obviously there’s a ton of variation. For example, our dog is older and we pay about a hundred dollars a month for her. In general, like I said before, you can really expect rates to go up as your pet gets older. Then on top of the premium, you’ll have to pay your deductible before you start getting reimbursed. Then, even once you’ve met the deductible, you’ll usually still have to pay a percentage of your vet bills. That might be 10, or 20, or 30%.

Ronita Choudhuri-Wade:

Could you break down what factors influence the premium costs?

Sarah Schlichter:

Sure. So aside from what I already mentioned, like the breed and the age of the animal, where you live also makes a difference. If you’re in an area where the cost of living is high, you’re probably going to pay more for pet insurance because vet expenses are probably also high in that area. Then beyond that, your cost is really going to depend on how you customize your plan. So if you want a plan that pays 90% of your vet bills rather than 70%, you’re going to pay more for that plan. But on the other hand, if you choose a higher deductible or a lower annual coverage limit, that’ll make the plan cheaper. One last thing to keep in mind is that, as I kind of said earlier, insurers don’t all cover the same things. So a plan from one company might look cheaper at first until you realize, “Oh, it’s going to cost me extra if I want to add exam fees, or physical therapy, or these other types of coverages.” And another plan that might cost more because it includes more of those coverages, and so that might be worth it to you.

Ronita Choudhuri-Wade:

Would you say there are any hidden costs or fees that pet owners should be aware of?

Sarah Schlichter:

There can be, yeah. Sometimes there’s a small fee if you want to pay your premiums monthly instead of paying the full year upfront. Occasionally you’ll see an account setup fee, usually a one-time fee when you first buy the plan. Then, you might also see little things on your vet bill that aren’t reimbursed, like taxes or waste disposal fees, stuff like that. Then, there’s one thing that’s a little bit complicated to explain, but it has to do with the way the insurance company calculates your claim payout. If an insurance company subtracts your deductible from your vet bill before they apply your copay, they’ll actually end up reimbursing you more than they would if they applied the copay first and then subtracted the deductible. It’s complicated. I’m not going to go into all the math, but this can make a difference over time, and it’s something I would recommend checking for when you’re reading that sample policy. Again, you want to see whether the copay is applied first or the deductible, and what you want is for the deductible to be applied first. That’s something we’ve actually been adding to our pet insurance reviews on NerdWallet just so people understand what to look for. We give some examples of the math, how much of a monetary difference it might make.

Ronita Choudhuri-Wade:

That’s really important to look into and could save you some money. Okay, so we’re familiar, unfortunately, with deductibles, copays, and coverage limits in human healthcare. How do those things impact the overall cost and value of a pet insurance plan?

Sarah Schlichter:

Well, adjusting all of those parts of your plan can help you control how much you pay for the insurance. You can usually make your plan cheaper by choosing a higher deductible, less reimbursement, or a lower coverage limit. But if you choose any of those things, the plan is not going to help you as much with your vet bills, so it’s really about how much of your pet’s care you’re willing and able to pay for yourself. I do want to just caution people about the deductible in particular. Don’t choose a thousand dollar deductible if you’d have a hard time paying that much in an emergency. Choose something smaller. But on the other hand, if you’ve got the money in your savings account and you just want the insurance in case of something really catastrophic happening, then a high deductible might make a little more sense for you.

Ronita Choudhuri-Wade:

What should pet owners look for when comparing different pet insurance providers? We know there’s a couple out there, and we see the ads for them all the time. Are there any specific features or services that can make one pet insurance plan, say, better than the other?

Sarah Schlichter:

The biggest thing, really, is what’s included and what’s not included in each company’s plan. There are certain things that one company might include, another will charge extra for, and company B over there is not going to cover at all. Things I would look for include exam fees, dental diseases, alternative treatments, like acupuncture, prescription food and supplements, and behavioral treatments. For example, say your dog is being really aggressive and you bring her to the vet for that. Will the plan cover it? Some will, some won’t.

Ronita Choudhuri-Wade:

I’m kind of blown away at the fact that there’s dog acupuncture. I didn’t know that was a thing.

Sarah Schlichter:

Yeah, I mean hydrotherapy and homeopathy, and chiropractic. There’s all these different things now for pets. And again, some of these depend on where you live, whether they’re going to be available to you. But yeah, some pet insurance plans will include coverage for all of those things.

Ronita Choudhuri-Wade:

Are there waiting periods for some of the plans?

Sarah Schlichter:

Just about every pet insurance plan will have some version of a waiting period. Usually when you buy a pet insurance plan, you can’t make a claim immediately. You may have to wait maybe three days for an accident claim, 14 days for an illness claim. So if I buy a plan on the first day of the month and my cat breaks his leg on the second day, the plan most likely is not going to pay for his treatment. Plus, the condition would be considered pre-existing because it happened before the coverage was effective. So if my cat needs follow-up treatment for that injury, even after the waiting period is over, I’m out of luck because it’s a pre-existing condition. Obviously, with that in mind, shorter waiting periods are better. I would also keep an eye out for companies that have extended waiting periods for things like knee injuries or hip dysplasia. You could have to wait six months or even a year for coverage for some of these things with certain companies. And then finally, you might also want to check how quickly companies process claims. The fastest companies will promise to get most claims turned around within a few days. Other insurers might take a month to pay your money back. Obviously, that could make a big difference if you’re on a tight budget. If you’ve got some big vet bill on your credit card and you need the reimbursement to pay it off, you probably don’t want to wait 30 days. So that’s another thing to check.

Ronita Choudhuri-Wade:

What advice would you give to someone who is on the fence about pet insurance?

Sarah Schlichter:

It’s a tough decision. It’s very personal. As I said earlier, it’s impossible to know in advance whether you’re going to get your money’s worth out of this plan or not because you don’t know how healthy or lucky your pet will be. Personally, my husband and I decided to get pet insurance for our dog for a couple of reasons. First, I would rather pay for the insurance, even if we don’t use it, than not have it if she got really sick. The peace of mind, it really was worth it to me. Then secondly, I guess I could say marital harmony. We didn’t want to have arguments over how much to spend if our dog ever got sick. I actually had a coworker once who spent $20,000 trying to save her sick cat. Unfortunately, the cat died anyway, which was terrible. But my husband didn’t understand how anyone could spend so much on a pet. And I agreed, yeah, that is a ton of money. But if you really love your pet, could you live with yourself if you didn’t do whatever it took to save them? Because we have insurance, we don’t have to have that argument.

Ronita Choudhuri-Wade:

Yeah, and I hear you on that. When we got Mo, we hadn’t really… We knew about pet insurance, but we didn’t know enough. Only when it was offered at a discounted rate through my husband’s work did we actually look into it. We felt similar to you where it’s like, “Okay.” The peace of mind, the security that we have. It makes sense. But there are alternatives to pet insurance, right?

Sarah Schlichter:

Probably the best strategy, other than pet insurance, is to set up a separate savings account for pet expenses. You could even put the money you would’ve spent on insurance premiums into that account instead. That way you’re paying yourself instead of the insurer. And if you have the self-discipline to save that money on a regular basis, it could be a better option. But otherwise, if you don’t have cash on hand, you could end up going into debt, like my coworker did, unfortunately, or having to create a crowdfunding account to help you pay an emergency vet bill. Some vets will work with you on setting up payment plans if you’ve got a really big bill, but it’s not something you can always count on.

Ronita Choudhuri-Wade:

What about subscription services that are offered by some vet companies? Can you explain what those are and how to evaluate whether that’s a better option than insurance?

Sarah Schlichter:

Sure. You’ll sometimes see these offered by bigger chains of vet hospitals, like Banfield or VCA. The plans do vary. But in general, what I’ve seen is that these are more similar to wellness plans than to standard pet insurance. They’re typically going to pay for things like your checkups, vaccines, and preventive screening tests rather than help you with an emergency surgery, something like that. In some ways, they could be a nice complement to an accident and illness policy. The pet insurance will cover you if something goes wrong, whereas the subscription plan can handle the routine stuff that you have to pay for every year. What I’d advise people is, number one, compare the vet subscription service to the wellness coverage you can add to an accident and illness plan. See which one seems like the better value to you. Then second, make sure either of those plans is actually cheaper than just paying for routine care yourself. It’s actually relatively easy to budget for your pet’s annual checkups and shots. It’s not like unexpected injury or something like that. The only real reason to get a wellness plan is if it saves you money. If a vet subscription plan includes services that your pet doesn’t actually need or that you’re not going to use, you’re probably better off just paying for the routine stuff yourself.

Ronita Choudhuri-Wade:

So just to review, what would you say are, say, the top three things listeners should know when deciding on pet insurance?

Sarah Schlichter:

Number one, just know it’s not going to pay for everything. Make sure you understand what is and isn’t covered before you buy the plan, and choose limits and deductibles that you feel comfortable with. Number two, keep in mind that the cheapest plan isn’t necessarily the best value. You may want to spend a little more on a more inclusive policy or a higher coverage limit if that’s in your budget. And finally, I would make your decision with the idea that this might be a policy you have for your pet’s entire life. I mean, with other types of insurance, like your auto or your homeowner’s policy, you might shop around every year or two. And if you see a better deal, it’s pretty easy to switch companies. But with pet insurance, because it doesn’t cover pre-existing conditions, you might end up realistically not being able to switch to another insurer if your pet has already developed a chronic issue. So if you switch, the new company isn’t going to cover that condition. I just really advise you to make sure you feel comfortable with the company and the plan you choose for the long term.

Ronita Choudhuri-Wade:

Sarah, this was so helpful and got us thinking about things that maybe we wouldn’t have considered before, and we know what to look for when looking at a pet insurance policy. Thank you so much for helping us out today.

Sarah Schlichter:

It was my pleasure. Thanks for having me.

Sean Pyles:

Ronita, what I’m thinking about after your conversation with Sarah is just one word, uncertainty, uncertainty about whether your pet will have some injury that would make pet insurance worth it, uncertainty about whether my wellness care membership is a good idea over the long run or if I should switch to pet insurance. The hard part, as ever, is that it’s impossible to predict the future. You just don’t know what’s going to happen with your pet and what your break-even point might be with your insurance.

Ronita Choudhuri-Wade:

There is a lot to consider when looking at pet insurance, and it seems like timing does play a part. Sometimes the idea of getting pet insurance may only pop into mind when something happens. But the fact you usually have to wait until it kicks in makes getting it early a good idea.

Sean Pyles:

Well, I suppose, just like so many other things, you have to weigh the risks of not having insurance and what that means if you end up with thousands of dollars in vet bills. I think on my end I’m going to crunch the numbers and see if I might be better off sticking with my current wellness membership and setting aside some cash into a savings account for future veterinary emergencies or maybe making the jump to pet insurance.

Ronita Choudhuri-Wade:

Yeah, that’s a tough decision, and it’s a good idea to make that call sooner than later. Pet care costs can start to skyrocket as they get older, and then the really hard decisions come in. Are you going to make pet care decisions purely based on cost? And sometimes you just have to. We’re going to talk about that in our next episode. Here’s a preview.

Angela Beal:

A pet owner could expect to pay a minimum $2,000, probably more, for an emergency situation. I think setting aside maybe $50 to $100 per month in a savings account and letting that account grow would be a good idea.

Ronita Choudhuri-Wade:

For now, that’s all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at (901) 730-6373. That’s (901) 730-NERD. You can also email us at [email protected]. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

Sean Pyles:

This episode was produced by Tess Vigeland. I helped with editing. Kim Lowe helped with fact-checking. Sara Brink mixed our audio. And a big thank you to NerdWallet’s editors for all their help.

Ronita Choudhuri-Wade:

And here’s our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

Sean Pyles:

And with that said, until next time, turn to the Nerds.

Source: nerdwallet.com

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August 10, 2024 by Brett Tams

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Sponsor is not responsible for: (1) any incorrect or inaccurate information, whether caused by entrants, printing errors or by any of the equipment or programming associated with or utilized in the Sweepstakes; (2) technical failures of any kind, including, but not limited to malfunctions, interruptions, or disconnections in phone lines or network hardware or software; (3) unauthorized human intervention in any part of the entry process or the Sweepstakes; (4) technical or human error which may occur in the offer or administration of the Sweepstakes, including but not limited to errors in the advertising, Official Rules, selection and announcement of the winners and distribution of the prizes or the processing of entries; (5) any inability of any winner to accept or use any prize for any reason; or (6) any injury or damage to persons or property which may be caused, directly or indirectly, in whole or in part, from entrant’s participation in the Sweepstakes or receipt or use or misuse of any prize. If for any reason an entrant’s entry is confirmed to have been erroneously deleted, lost, or otherwise destroyed or corrupted, entrant’s sole remedy is another entry in the Sweepstakes, provided that, if it is not possible to award another entry due to discontinuance of the Sweepstakes, or any part of it, for any reason, Sponsor, in its sole discretion, may elect to hold a random drawing from among all eligible entries received up to the date of discontinuance for any or all of the prizes offered herein. No more than the stated number of prizes will be awarded. In the event that production, technical, seeding, programming or any other reasons cause more than stated number of prizes as set forth in these Official Rules to be available and/or claimed, Sponsor reserves the right to award only the stated number of prizes by a random drawing among all legitimate, un-awarded, eligible prize claims.

Sponsor reserves the right to cancel, suspend and/or modify the Sweepstakes, or any part of it, if any fraud, technical failures or any other factor beyond Sponsor’s reasonable control impairs the integrity or proper functioning of the Sweepstakes, as determined by Sponsor in its sole discretion. Sponsor reserves the right, in its sole discretion, to disqualify any individual it finds to be tampering with the entry process or the operation of the Sweepstakes or to be acting in violation of these Official Rules or in an unsportsmanlike or disruptive manner. Any attempt by any person to deliberately undermine the legitimate operation of the Sweepstakes may be a violation of criminal and civil law, and, should such an attempt be made, Sponsor reserves the right to seek damages from any such person to the fullest extent permitted by law. Sponsor’s failure to enforce any term of these Official Rules shall not constitute a waiver of that provision

11. Disputes

1. Choice of Law: These Official Rules are governed by the laws of the State of California, without regard to conflict of law principles. Subject to this Section 11, which provides that disputes are to be resolved through binding arbitration or small claims court, to the extent that any lawsuit or court proceeding is permitted hereunder, you and Sponsor agree to submit to the exclusive personal jurisdiction of the state courts and federal courts located within San Francisco County, California, for the purpose of litigating all such disputes.

The parties acknowledge that these Official Rules evidences a transaction involving interstate commerce. Notwithstanding the provision in the preceding paragraph with respect to applicable substantive law, any arbitration conducted pursuant to this Agreement shall be governed by the Federal Arbitration Act (9 U.S.C. Secs. 1-6).

2. DISPUTES RESOLVED BY BINDING ARBITRATION. In the interest of resolving disputes between you and Sponsor in the most expedient and cost-effective manner, you and SPONSOR agree to resolve disputes through binding arbitration or small claims court instead of in courts of general jurisdiction (“Agreement to Arbitrate”).

ARBITRATION AGREEMENT

A) CLAIMS TO BE RESOLVED BY BINDING ARBITRATION. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW SPONSOR AND YOU AGREE TO ARBITRATE ANY AND ALL DISPUTES AND CLAIMS BETWEEN YOU AND Sponsor, AND BETWEEN YOU AND OUR FORMER OR PAST EMPLOYEES, DIRECTORS, OFFICERS AND

CONTRACTORS, IN ALL CASES ARISING OUT OF OR RELATING TO THE TERMS OR THE SERVICES, EXCEPT THAT: (1) EACH PARTY MAY COMMENCE AN ACTION IN A COURT OF PROPER JURISDICTION FOR INJUNCTIVE OR OTHER EQUITABLE RELIEF AS CONTEMPLATED IN SECTION 11(H) BELOW (INJUNCTIVE RELIEF) PENDING A FINAL DECISION

BY THE ARBITRATOR, (2) EITHER PARTY MAY BRING AN INDIVIDUAL ACTION IN SMALL CLAIMS COURT IF THE RULES OF THAT SMALL CLAIMS COURT WILL ALLOW IT. IF EITHER PARTY DOES NOT BRING ITS CLAIM IN

SMALL CLAIMS COURT (OR IF YOU OR WE APPEAL A SMALL CLAIMS COURT JUDGMENT TO A COURT OF GENERAL JURISDICTION), THEN THE CLAIMS MUST BE RESOLVED BY BINDING, INDIVIDUAL ARBITRATION. YOU AGREE THAT, BY AGREEING TO THE TERMS, YOU AND SPONSOR ARE EACH WAIVING THE RIGHT TO A TRIAL BY JURY OR

TO PARTICIPATE IN A CLASS OR REPRESENTATIVE ACTION TO THE MAXIMUM EXTENT PERMITTED BY LAW. THE TERMS EVIDENCE A TRANSACTION IN INTERSTATE COMMERCE, AND THUS THE FAA GOVERNS THE INTERPRETATION AND ENFORCEMENT OF THIS ARBITRATION PROVISION. THIS ARBITRATION PROVISION SHALL SURVIVE TERMINATION OF THE TERMS OR YOUR RELATIONSHIP WITH SPONSOR FOR ANY REASON.

b) ARBITRATOR. ANY ARBITRATION BETWEEN YOU AND SPONSOR WILL BE GOVERNED BY THE COMMERCIAL DISPUTE RESOLUTION PROCEDURES AND THE SUPPLEMENTARY PROCEDURES FOR CONSUMER RELATED DISPUTES (COLLECTIVELY, “AAA RULES”) OF THE AMERICAN ARBITRATION ASSOCIATION (“AAA”), AS MODIFIED BY THESE TERMS, AND WILL BE ADMINISTERED BY THE AAA. THE AAA RULES AND FILING FORMS ARE AVAILABLE ONLINE AT WWW.ADR.ORG, BY CALLING THE AAA AT 1-800-778-7879, OR BY CONTACTING SPONSOR. ALL ISSUES ARE FOR THE ARBITRATOR TO DECIDE, INCLUDING THE SCOPE AND ENFORCEABILITY OF THIS ARBITRATION PROVISION AS WELL AS OTHER TERMS AND CONDITIONS IN THESE TERMS, AND THE ARBITRATOR SHALL HAVE EXCLUSIVE AUTHORITY TO RESOLVE ANY SUCH DISPUTE RELATING TO THE SCOPE AND ENFORCEABILITY OF THIS ARBITRATION PROVISION OR ANY OTHER TERM OF THESE TERMS INCLUDING, BUT NOT LIMITED TO ANY CLAIM THAT ALL OR ANY PART OF THIS ARBITRATION PROVISION OR THESE TERMS IS VOID OR VOIDABLE. HOWEVER IF PUTATIVE CLASS OR REPRESENTATIVE CLAIMS ARE INITIALLY BROUGHT BY EITHER PARTY IN A COURT OF LAW, AND A MOTION TO COMPEL ARBITRATION IS BROUGHT BY ANY PARTY, THEN THE COURT SHALL DECIDE WHETHER THESE TERMS PERMIT CLASS OR REPRESENTATIVE PROCEEDINGS. FOR THE AVOIDANCE OF DOUBT, THE COURT AND ARBITRATOR SHALL BE BOUND BY THESE TERMS, INCLUDING WITH REGARD TO THE CLASS ACTION WAIVER PROVISION BELOW. IN ANY ARBITRATION, THE ARBITRATOR SHALL FOLLOW THE APPLICABLE LAW. THE ARBITRATOR SHALL NOT HAVE THE POWER TO COMMIT MANIFEST ERRORS OF LAW OR LEGAL REASONING, AND ANY AWARD RENDERED BY THE ARBITRATOR THAT EMPLOYS A MANIFEST ERROR OF LAW OR LEGAL REASONING MAY BE VACATED OR CORRECTED BY A COURT OF COMPETENT JURISDICTION FOR ANY

SUCH ERROR. DURING THE ARBITRATION, THE AMOUNT OF ANY SETTLEMENT OFFER MADE BY SPONSOR OR YOU SHALL NOT BE DISCLOSED TO THE ARBITRATOR UNTIL AFTER THE ARBITRATOR DETERMINES THE AMOUNT, IF ANY, TO WHICH YOU OR SPONSOR ARE ENTITLED. IN ARBITRATION, AND TO THE EXTENT OTHERWISE PERMITTED BY LAW, THE PARTIES MAY EXCHANGE “OFFERS OF COMPROMISE” OR STIPULATE TO JUDGMENTS OR AWARDS IN THE SAME WAY THE PARTIES COULD IN COURT, INCLUDING FOR EXAMPLE, UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 998 FOR ARBITRATIONS TAKING PLACE IN CALIFORNIA. SUCH OFFERS OF

COMPROMISE SHALL HAVE THE SAME FORCE AND EFFECT AS THEY WOULD IN A COURT PROCEEDING. THE ARBITRATION PROCEEDINGS SHALL OTHERWISE REMAIN CONFIDENTIAL, EXCEPT FOR PURPOSES OF

SEEKING COURT INTERVENTION (IF NECESSARY).

C) NOTICE AND PROCESS. A PARTY WHO INTENDS TO SEEK ARBITRATION MUST FIRST SEND TO THE OTHER, BY CERTIFIED MAIL, A WRITTEN NOTICE OF DISPUTE (“NOTICE”). THE NOTICE TO SPONSOR SHOULD BE ADDRESSED TO: SPONSOR, INC., 55 HAWTHORNE ST, 10TH FLOOR, SAN FRANCISCO, CA 94105 (“NOTICE ADDRESS”) AND MUST BE SIGNED BY YOU PERSONALLY. NOTICE TO YOU FROM SPONSOR MAY BE TO YOU DIRECTLY, OR IF YOU ARE REPRESENTED, TO YOUR LEGAL COUNSEL. THE NOTICE MUST (A) DESCRIBE THE NATURE AND BASIS OF THE CLAIM OR DISPUTE; AND (B) SET FORTH THE SPECIFIC RELIEF SOUGHT (“DEMAND”). IF YOU AND SPONSOR DO NOT REACH AN AGREEMENT TO RESOLVE THE CLAIM WITHIN 30 DAYS AFTER THE NOTICE IS RECEIVED, YOU OR SPONSOR MAY COMMENCE AN ARBITRATION PROCEEDING PURSUANT TO THE TERMS OF THIS ARBITRATION AGREEMENT.

D) FEES. IN THE EVENT THAT YOU COMMENCE ARBITRATION IN ACCORDANCE WITH THESE TERMS, SPONSOR WILL, AT YOUR REQUEST, REIMBURSE YOU FOR YOUR PAYMENT OF THE ARBITRATION FILING FEE, UNLESS YOUR CLAIM IS FOR GREATER THAN $10,000, IN WHICH CASE THE PAYMENT OF ANY FEES SHALL BE DECIDED BY THE AAA RULES. ANY REQUEST FOR PAYMENT OF FEES BY SPONSOR SHOULD BE SUBMITTED BY MAIL TO THE AAA ALONG WITH YOUR DEMAND FOR ARBITRATION AND SPONSOR WILL MAKE ARRANGEMENTS TO PAY ALL NECESSARY FEES DIRECTLY TO THE AAA. IN THE EVENT THE ARBITRATOR DETERMINES THE CLAIM(S) YOU ASSERT IN THE ARBITRATION TO BE FRIVOLOUS OR BROUGHT FOR AN IMPROPER PURPOSE (AS MEASURED BY THE STANDARDS SET FORTH IN FEDERAL RULE OF CIVIL PROCEDURE 11(B) OR ITS SUCCESSOR RULE), YOU AGREE TO REIMBURSE SPONSOR FOR ALL FEES ASSOCIATED WITH THE ARBITRATION PAID BY SPONSOR ON YOUR BEHALF THAT YOU OTHERWISE WOULD BE OBLIGATED TO PAY UNDER THE AAA’S

RULES. IF YOUR CLAIM IS FOR $10,000 OR LESS, YOU MAY CHOOSE WHETHER THE ARBITRATION WILL BE CONDUCTED SOLELY ON THE BASIS OF DOCUMENTS SUBMITTED TO THE ARBITRATOR, THROUGH A NON-

APPEARANCE BASED TELEPHONIC HEARING, OR BY AN IN-PERSON HEARING AS ESTABLISHED BY THE AAA RULES. ANY IN-PERSON ARBITRATION HEARINGS WILL TAKE PLACE AT A LOCATION TO BE AGREED UPON IN SAN FRANCISCO COUNTY, CALIFORNIA. REGARDLESS OF THE MANNER IN WHICH THE ARBITRATION IS CONDUCTED, THE ARBITRATOR SHALL ISSUE A REASONED WRITTEN DECISION SUFFICIENT TO EXPLAIN THE ESSENTIAL FINDINGS AND CONCLUSIONS ON WHICH THE DECISION AND AWARD, IF ANY, ARE BASED. THE ARBITRATOR MAY MAKE RULINGS AND RESOLVE DISPUTES AS TO THE PAYMENT AND REIMBURSEMENT OF FEES OR EXPENSES AT ANY TIME

DURING THE PROCEEDING AND UPON REQUEST FROM EITHER PART MADE WITHIN 14 DAYS OF THE ARBITRATOR’S RULING ON THE MERITS.

E) CLASS ACTION WAIVER. ANY ARBITRATION UNDER THESE TERMS WILL TAKE PLACE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS AND CLASS ACTIONS ARE NOT PERMITTED. UNLESS BOTH YOU AND SPONSOR AGREE OTHERWISE, THE ARBITRATOR MAY NOT CONSOLIDATE MORE THAN ONE PERSON’S CLAIMS (EXCEPT AS SET FORTH IN SUBSECTION (F) BELOW), AND MAY NOT OTHERWISE PRESIDE OVER ANY FORM OF A REPRESENTATIVE OR CLASS PROCEEDING. THE ARBITRATOR MAY AWARD RELIEF (INCLUDING MONETARY, INJUNCTIVE, AND DECLARATORY RELIEF) ONLY IN FAVOR OF THE INDIVIDUAL PARTY SEEKING RELIEF AND ONLY TO THE EXTENT NECESSARY TO PROVIDE RELIEF NECESSITATED BY THAT INDIVIDUAL PARTY’S CLAIM. ANY RELIEF AWARDED CANNOT AFFECT OTHER USERS. IF THIS SPECIFIC SUBPARAGRAPH (E) IS FOUND TO BE UNENFORCEABLE IN ITS

ENTIRETY, THEN THE ENTIRETY OF THIS ARBITRATION PROVISION SHALL BE NULL AND VOID. HOWEVER, IF ONLY A PORTION OF THIS SUBPARAGRAPH (E) IS FOUND TO BE UNENFORCEABLE, THEN THE UNENFORCEABLE PORTION OF THE PROVISION SHALL BE STRICKEN, AND THE REMAINDER OF SUBPARAGRAPH (E) ENFORCED. ANY CLAIMS

OR CAUSES OF ACTION SEEKING RELIEF NOT SUBJECT TO INDIVIDUAL ARBITRATION UNDER APPLICABLE LAW SHALL BE STAYED IN A COURT OF COMPETENT JURISDICTION PENDING COMPLETION OF INDIVIDUAL

ARBITRATION TO THE MAXIMUM EXTENT PERMITTED BY LAW. NOTHING IN SUBSECTION (E) OR (F) BELOW SHALL PREVENT YOU OR SPONSOR FROM PARTICIPATING IN A CLASSWIDE SETTLEMENT OF

CLAIMS. YOU AND SPONSOR AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN YOUR OR ITS INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS

OR REPRESENTATIVE PROCEEDING.

F) MASS, COLLECTIVE, OR BATCH ARBITRATION. YOU AND SPONSOR AGREE THAT ADMINISTRATION OF ANY MASS, COLLECTIVE OR BATCH ARBITRATION SHALL BE GOVERNED BY THE TERMS SET FORTH IN THIS

SUBSECTION (F). You and SPONSOR agree that a “mass, collective, and/or batch arbitration” includes, but is not limited to, instances in which you and others are represented by a law firm or collection of law firms or legal counsel that has filed more than 150 arbitration demands of a substantially similar nature against SPONSOR, alleging similar or identical claims or causes of action, within 180 days of the arbitration demand filed on your or others behalf, and the law firm or collective of legal counsel/law firms seeks to simultaneously or collectively

administer and/or arbitrate all the arbitration demands together. If more than 150 arbitration demands of a substantially similar nature, alleging the similar or identical claims or causes of action, are filed against Sponsor by the same law firm or collection of legal counsel/law firms within 180 days of one another, each

arbitration demand must be filed, administered, arbitrated, and resolved pursuant to this subsection (f).

Specifically, in order to increase the efficiency of resolution for any mass, collective, and/or batch arbitration, in the event 150 or more similar arbitration demands against Sponsor are filed within a 180 day period pursuant to the above, the arbitration provider shall (i) group the arbitration demands into batches of no more than 150 demands per group; and (ii) provide for resolution of each group or batch as a single arbitration with one set of filing and administrative fees and a single arbitrator assigned per group or batch. You and Sponsor agree to cooperate in good faith with the arbitration provider to implement the aforementioned protocol for mass, collective, and/or batch arbitrations with regard to resolution, fees and administration. If subsections (f)(i)

or (f)(ii) are not enforced, or the arbitration provider refuses to follow these specific mass, collective, and/or batch arbitration protocols, then each arbitration demand must be filed, administered, arbitrated, and resolved individually, or the parties agree to seek out a different, mutually agreeable and widely-recognized arbitration organization agreeable to follow subsections (f)(i) or (f)(ii). If any other portion of this subparagraph (f) is found to be unenforceable, then the unenforceable portion of the provision shall be stricken, and the remainder of

subparagraph (f) and this agreement shall be enforced to the maximum extent permitted by law. Mass, collective, and/or batch arbitrations shall otherwise be subject to all other substantive and procedural terms contained within this agreement.

g) Discovery. Discovery and/or the exchange of non-privileged information relevant to the dispute will be governed by the AAA Rules.

h) Injunctive Relief. Notwithstanding the Arbitration Agreement, you acknowledge that money damages are an inadequate remedy for unauthorized access to or use of the Services or your breach of any provisions in the Terms relating to SPONSOR’s intellectual property rights, and any such breach would result in irreparable harm to SPONSOR. Accordingly, in the event of any such actual or threatened breach, SPONSOR may, in addition to any other rights or remedies available to SPONSOR at law or equity, seek specific performance or injunctive

relief without the posting of a bond.

i) Modifications. If SPONSOR makes any future change to this Arbitration Agreement (other than a change to the Notice Address) after your enrollment in a service or program or your use of the Services, you may reject any such change and require SPONSOR to adhere to the language in this arbitration provision as written at the time of your enrollment or purchase if a dispute between us arises, by sending us written notice within 30 days of the change to the Notice Address provided above. You acknowledge and agree that, in the event you reject any

future change, your account with SPONSOR shall be immediately terminated and you will arbitrate any dispute between us in accordance with the language of this provision as written at the time of your enrollment or purchase.

j) Severability and Enforceability. If an arbitrator or court decides that any part of this Section 11 is invalid or unenforceable, the other parts of this Section 12 shall still apply. If the entirety of this Section 12 is found to be unenforceable, then the parties agree that the exclusive jurisdiction and venue described in Section 11 shall govern any action arising out of or related to the Terms, and that the remainder of the Terms will continue to apply.

12. Entrant’s Personal Information

13. Winners List

Source: nerdwallet.com

Apache is functioning normally

August 8, 2024 by Brett Tams

Fall has always been my favorite time of year, and that feeling only intensified after I became a parent. Summer can feel like pure chaos, with camp, family vacations and back-to-school shopping all adding extra costs.

For me, fall financial planning includes another major component: serious meal planning. With the arrival of school schedules, sports practices and earlier bedtimes, my family uses dinner as a predictable time to sit together. But picky eaters and different preferences can add extra challenges.

Here are are my tips for making meal time work for everybody while staying on budget:

Go back-to-school shopping for dinner

While I’m helping my three children (ages 5, 11 and 14) pick out binders and pencils for their new school years, I also like to use the sales to pick out some new items to help me with dinners. I use a binder to organize our favorite recipes that we make frequently and tabs to separate the categories, like special occasions, weeknight meals and desserts.

Just as with schoolwork, organization is key. With all of my recipes in one place, I plan our meals for the following week by Sunday so I can get the groceries we need before the busy week begins. That helps us avoid the temptation to order takeout at the last minute, which is an easy way to spend almost as much as a weekly grocery run.

Establish new study habits

As with any repeated task, dinner planning can get a little boring, so I like to introduce some fresh meals in the fall when everyone is excited about new routines. Each week, I take a few minutes to check out new recipes from my favorite cooking blogs, Instagram influencers and food websites.

My favorites include J. Kenji Lopez-Alt on Instagram, Weelicious.com and The New York Times Cooking section. I aim to try at least one new recipe each week. Sometimes, as with Lopez-Alt’s caramelized cream of tomato soup, it’s a huge hit, and we make it over and over again. Paired with hearty bread, that soup is an entire meal.

Offer electives

At my house, we have some extremely picky eaters, along with a range of food preferences, which makes finding one meal to satisfy everyone difficult. To address that problem, I’ve come up with the deconstructed meal: I make spaghetti with sauce, but I keep all components separate, so one person can have plain pasta, another can have plain sauce, and the more flexible eaters can combine the two into a traditional spaghetti meal topped with parmesan.

I’ve also long believed that soups are one of the most cost-efficient ways to feed families. For me, Barefoot Contessa’s Mexican Chicken Soup has been a go-to meal, partly because it comes with different toppings, including cheese, tortilla chips and avocado, which people can choose to add or skip themselves. (Soups also freeze well for future meals — another benefit.)

Similarly, make-your-own pizza is a big winner because people can add their own toppings or skip the cheese or sauce altogether.

Enlist a teaching assistant

Within the last year or so, my two older children have started taking charge of cooking dinner one night a week. It’s worked out great for all of us because they get practice cooking and planning meals, and I get the night off.

My 11-year-old son has perfected the art of making grilled cheese and salad. It’s nothing fancy, but it’s something everyone eats — even if my 5-year-old insists on eating his sandwich “raw” instead of grilled, and my 14-year-old only eats the salad.

As long as everyone’s had a reasonably balanced dinner, I consider it a success.

Source: nerdwallet.com

Apache is functioning normally

August 8, 2024 by Brett Tams

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:

Discover strategies for achieving early retirement with the FIRE movement and learn how to maximize your credit card rewards.

How much do you have to save if you want to retire early? Can you double your credit card rewards by paying off one card with another? Hosts Sean Pyles and Elizabeth Ayoola discuss the FIRE movement and maximizing credit card rewards to help you understand how to achieve financial independence and optimize your financial strategies. They begin with a discussion of the FIRE movement, with tips and tricks on understanding different FIRE strategies (Lean FIRE, Fat FIRE, Barista FIRE), adapting financial goals to individual circumstances, and the feasibility of saving significant portions of income amidst rising living costs and inflation.

Then, credit card Nerd Erin Hurd joins Sean to discuss maximizing credit card rewards. She explains the impossibility of doubling rewards by paying off one card with another, effective strategies for couples to maximize credit card points like leveraging multiple sign-up bonuses and using authorized users, and the best and worst ways to redeem credit card points, emphasizing considerations such as point expiration, the impact of inflation on point value, and the importance of having a realistic plan for point usage.

Check out this episode on your favorite podcast platform, including:

NerdWallet stories related to this episode:

Episode transcript

This transcript was generated from podcast audio by an AI tool.

Elizabeth Ayoola:

It’s another day at work doing the best job a girl could ask for, talking about money and hoping I earn enough to retire early.

Sean Pyles:

I feel you, Elizabeth. But given the current cost of living, is early retirement still a possibility? And how can people do that when it can be hard to save anything? Welcome to NerdWallet’s Smart Money Podcast. I’m Sean Pyles.

Elizabeth Ayoola:

And I’m Elizabeth Ayoola. Now this episode we are going to answer a listener’s question about how to get the most out of their credit card points. Are you better off using them to get cash back or booking airline tickets? Speaking of which, I might do that soon. And what about using them at checkout at Amazon? But before we dig into that, let’s chat a little bit about the FIRE movement, one of my favorite topics, and whether it’s still a thing considering how the cost of living has gone up for so many, even though inflation has been cooling lately.

So Sean, you should already know I’m going to be putting you in the hot seat and quizzing your CFP knowledge. For new listeners, Sean is studying for his designation, and he’s almost about to throw up a peace sign after his final exam. So tell us, Sean, what is FIRE?

Sean Pyles:

Yeah, I have just a few more months until I sit for the CFP exam, and the studying is getting very intense. But anyway, it means I know a lot more than I did even a few months ago, which is great. So FIRE stands for Financial Independence Retire Early, and it’s a movement aimed at using different saving strategies to help people, you guessed it, retire early. Early looks different for everyone, but it’s certainly before the Social Security retirement age of 66 or 67 depending on when you were born. The main goal is to save as much as you can to retire at your chosen age. For some people that means saving between 50% and 70% of their income for retirement. That probably sounds extreme, but that’s what it might take to avoid working into your golden years.

Elizabeth Ayoola:

Definitely sounds extreme for the average person, I think. But I do often sit and think about how nobody warned me that I would be spending decades of working or maybe I was too worried thinking about how I was going to stay married for decades and missed that I was going to be at work every single day, anyway. But assuming you start working at the age of 21 and retire at 66 without any career breaks, that’s like 45 years of working. So for people who do not have time for all of that, they tend to subscribe to the FIRE movement. I am people. As much as I love my job, I definitely would love some more flexibility. So anyway, there are various types of FIRE out there to fit one’s savings and lifestyle preferences, so to speak. But the main types of FIRE that are out there include Lean FIRE, Fat FIRE, and Barista FIRE.

Sean, do you quickly want to explain what those are for us? Break those down.

Sean Pyles:

Sure. So Lean FIRE is for people who want to retire early and retire fully, but it requires a steep sacrifice as you’ll likely have to save well over half of your income. It’s also ideal for people who can embrace a minimalist lifestyle and live off of little during retirement.

Fat FIRE is essentially the opposite. People who are high earners and want to continue maintaining that lifestyle in retirement. They have to invest larger amounts of money than Lean FIRE disciples for this reason. Finally, Barista FIRE is for folks who are more focused on choosing the type of work they do and the frequency at which they work. So think of people who want to partially retire and maybe work part-time. They save enough so they don’t need the bulk of their income to come from paid work.

Elizabeth Ayoola:

Love, love, love that. And I love how there’s so many different options for different people, but I personally would love to retire in my 40s or 50s and I’m definitely a Fat or Barista girl. So I want to do all the fabulous things during my retirement and I want to be a grandma and I want to bring my fabulous grandkids along sometimes. And just for the listeners, my 6-year-old son said he wants 10 kids, so who’s going to-

Sean Pyles:

Wow, that’s a lot of grandkids.

Elizabeth Ayoola:

It’s a lot of grandkids. And he said I’m apparently going to help him look after them, so I’m going to need a lot of money here. You know what I’m saying? Yeah, right. But yeah, I will always want to do some sort of meaningful work, that said, but would love more flexibility in terms of when I work and the type of work that I do. So Sean, is early retirement something you think about and where would you fall in between the three?

Sean Pyles:

I would love to retire early. Don’t get me wrong, I really like my job and helping people through my work gives me a sense of purpose and satisfaction, but also I want to do what I want when I want. So I think I would lean more toward the Barista FIRE. Once I have my CFP certification, I can see myself building a portfolio of clients that I manage and that would be my equivalent of Barista work.

Elizabeth Ayoola:

I love that. I love that, I love that. All right, so now I’m wondering how feasible it is to save half or more of your income in this economy. I know I’ve seen a few data points this year about Americans either dipping into their retirement accounts because of inflation or cutting back on retirement savings altogether. So for instance, the 2023 TIAA Institute-GFLEC Personal Finance Index found that 25% of employed adults cut their retirement savings because of inflation-induced financial pressure, and almost half of that group halted their savings altogether. Also, a 2024 Allianz Life Study found that 67% of Americans are more concerned about paying their bills than about their financial future. Another 42% have withdrawn from their retirement savings because of inflation.

So what is my point in all of these data points? The question is, is FIRE even still on people’s radar when they’re trying to survive daily expenses? My assumption is there is still a population of people who are feeling the pinch but can afford to still save more than the average person or make sacrifices to do so. Now, honestly, I was able to do it easily last year saving a big chunk of my income. But this year with new expenses, moving cities, and the cost of living, I’ve had to scale back some. So I’m still saving a decent chunk, I’d say, but certainly not half of my income or more.

Sean Pyles:

Yeah, I mean the truth is the FIRE movement is a pipe dream for most people, but so is the idea of completely retiring for many people, unfortunately. To zoom out, the median retirement savings for folks between the ages of 35 and 44 is $45,000. And for those between the ages of 55 and 64, it’s $185,000, and neither amount would be enough to fund decades of retirement. So for many people, retirement will be funded through some combination of money they’ve saved, Social Security, and some form of work. And a quick aside here, for those who are thinking that Social Security won’t be around when they retire, I say please do not fall for numerous political messaging. We have earned these benefits and we need to fight for them if we want them, but that’s my own little thing.

Elizabeth Ayoola:

I know that’s right because I’ve earned the benefits and I need them when I retire. So we’re in the fight together, Sean. That said, I understand that it’s probably not feasible for the average person to participate in FIRE and save half of their income. In some instances, it might require getting an extra job or a side hustle to fund those early retirement dreams. That’s what I personally did, but it did take a lot of discipline and sacrifice because I was working more than I probably would have wanted to. And I wasn’t able to go on shopping sprees or vacation on a whim because I was like, “Hey, got to earmark this for retirement.”

Sean Pyles:

Totally. So if retiring early really is a priority for you, it is going to take some combination of living off much less than you earn, likely increasing the amount that you do earn, and getting really creative about how you save and invest money. And this does raise the question of how much you even need to retire. For many people, they can get away with living off of 80% of their current salary in retirement. So for a very basic estimate of how much you might need to retire early, figure out what 80% of your salary is, multiply that by your life expectancy, and you have the magic number that you need to save for. Again, that’s at a really simple level at least.

Elizabeth Ayoola:

Right. And I think even if people aren’t with the FIRE movement, it’s still good to think about what your retirement plan is. And I’m often talking to friends, family, and one of my favorite icebreaker questions is “When do you want to retire?” I know I’m not a fun icebreaker, but still, it does get people thinking about “Ooh, when do I want to retire?” And then it gets the ball rolling in terms of starting to do that math to see how much you need to save. So while you may not be able to retire in your 50s or 40s, it doesn’t hurt to see where you are and whether you can even afford to retire at the Social Security retirement age with your current savings and the pace that you’re currently putting away money as well.

Sean Pyles:

Yeah, sometimes seeing that number can be the motivation that you need to get more organized with your money, ask for that raise or even start looking for a higher-paid job.

Elizabeth Ayoola:

Right, and even if you can’t save the amount you want to right now, having a plan in place means as soon as your income increases, you can roll that plan into action. It’s easy to put off thinking about it, but as my mom friends say, the days are long, but the years are short. And I think to whatever extent we can control, we should try and set ourselves up for the best retirement possible. And money plays a huge role in that.

Sean Pyles:

So I think the bottom line here is that yes, the world is expensive, but there are also plenty of people who earn a lot of money and are able to sock away a big portion of that money. FIRE is still feasible for a dedicated privileged few, but for the rest of us, we’ll have to keep working hard, saving our money, and doing what we can to ensure that Social Security pays out when we are in our golden years.

Elizabeth Ayoola:

And playing the lottery. Just kidding.

Sean Pyles:

If you’re lucky.

Elizabeth Ayoola:

Sean Pyles:

Well, before we get into this week’s money question, we have an exciting announcement. We are running another Book Giveaway Sweepstakes ahead of our next Nerdy Book Club episode. Our next guest is Janice Torres, author of “Financially Lit, the Modern Latina’s Guide to Level Up Your Dinero and Becoming Financially Ponderosa,” which offers tips to young people on how to get started with managing their money.

Elizabeth Ayoola:

To enter for a chance to win our Book Giveaway, send an email to [email protected] with the subject book sweepstakes during the sweepstakes period. Entries must be received by 11:59 PM PT on August 22nd, so you’ve got a couple of weeks. Include the following information: your first and last name, your email address, your zip code, and your phone number. If you need more information, please visit our Official Sweepstakes Rules page.

Sean Pyles:

We are back and answering your money questions to help you make smarter financial decisions. This episode’s question comes from a listener’s text message. Here it is. “Hi. I recently got married and I’m wondering about the best way to work with our different credit cards. Is it possible or a good idea to put all of our purchases on one card and then pay off that card with another card, thereby giving us rewards on both cards? We would of course then pay off the card using a checking account to avoid carrying a balance.” To help us answer this listener’s question, we are joined by NerdWallet credit card pro Erin Hurd. Erin, welcome back to Smart Money.

Erin Hurd:

Thanks so much, Sean. Thanks for having me.

Sean Pyles:

So let’s talk about this clever idea that our listener and their spouse have. Paying off one credit card with another credit card to try to effectively double the amount of points that they could get for their purchases. Is that even possible?

Erin Hurd:

Well, I have to say it’s a very clever idea. And so I give a big hats off to this reader for thinking outside the box and also for making a plan to avoid carrying a balance upfront. Because if you’re carrying a balance on a credit card, the interest you’re going to pay will far outweigh any rewards that you’ll earn. However, unfortunately, this strategy is not possible. You cannot pay the monthly bill of one credit card using another credit card, and the rewards that you earn from credit card issuers, they come at a cost for the credit card issuers. And so they would be out of business if they were paying double rewards that way.

If the listener was carrying a balance on another credit card, it would be possible to transfer that balance to a new credit card so they could open up a new card with a 0% intro APR period on balance transfers, and then they would get some extra time to pay off that balance without paying interest. But that’s really the only way that you can essentially pay one credit card with another credit card. And I also wanted to note that you won’t earn any rewards on a balance transfer.

Sean Pyles:

In fact, there’s almost the opposite of a reward because you typically have to pay a fee for the balance transfer.

Erin Hurd:

That’s correct.

Sean Pyles:

So our listeners’ original idea won’t work out, but there are some other clever ways that couples can tag team their credit card points game. Can you talk us through some of those?

Erin Hurd:

Absolutely. I love partners working together in credit cards because two partners mean double the potential for new card signup bonuses. So if you’re thinking about a new card, it could make sense for your partner to also apply for a new card. That could be the same card, they could be different cards, but that way each of you will earn a nice signup bonus. And it can even make sense to double up on some cards that charge an annual fee, which paying double annual fees might give you a little bit of pause. But for example, some hotel credit cards, they’ll offer a free annual night certificate. So if both partners get the card, not only will they get two signup bonuses, but they’ll also get two free hotel nights a year. That way they can have a nice weekend getaway instead of just one night. They will pay two annual fees, but the cost of those two annual fees should work out to be a fraction of the value of what they would pay in cash for a free weekend away at a nice hotel.

Sean Pyles:

But I would imagine this would require the couples to be more proactively managing all of the various points and benefits that they get from their cards, right?

Erin Hurd:

Absolutely. And meeting a signup bonus is an important part of opening a new card. And so if you are not going to be able to meet the spending thresholds in order to earn those bonuses, then think twice about the cards that you’re going to open up and maybe just one card.

Sean Pyles:

So Erin, I know this is something that you and your husband do. Can you talk about how you approach this strategically with your partner?

Erin Hurd:

Absolutely. So first of all, we are going to make sure that we have enough spending coming up in our everyday expenses that we’re going to be able to meet the minimum spending requirements if we’re opening two cards. We want to make sure that we’re not spending more than we would ordinarily in order to hit those bonuses. And for people who don’t spend as much on the cards, they don’t have big expenses coming up, another way to hit a bonus quickly is that you could add your partner as an authorized user on your new card, and that way two people spending on the same account can help you hit that spending threshold a little bit more quickly.

Sean Pyles:

So someone could be an authorized user on their partner’s card even if they have the same card?

Erin Hurd:

That’s correct. And also I wanted to point out that some credit card issuers do allow you to pool points with your partner or even sometimes with other family members, and that can make it easy to amass a big stash of points that you could maybe use for a big trip. Sometimes partners can even refer each other for a new card. So sometimes I could refer my husband and if he uses my referral link to open up the card, then I will get a referral bonus and he’ll get the new card signup bonus.

Sean Pyles:

Oh, very nice, I like that. So this listener’s question got me wondering about all of the different ways that we can use our credit card points when we have accumulated them. Some cards will let you redeem your points to cover purchases or let you redeem them for items in their online stores. Some will even let you redeem your points when you’re checking out at Amazon. And I imagine that your points will go further in some places than others. So how can people determine where is the best place to use their points?

Erin Hurd:

That is such a great question, and it’s one that can be really confusing because these options are popping up more and more. And so first, let me say that your points are best spent however they’re most useful to you. So if you have a bunch of travel points but you don’t have any travel plans on the horizon, it’s okay if you choose to use them for something else, even if they’ll be less valuable. Don’t feel guilty about them. They’re your rewards. You can spend them however you want to spend them.

But if you do want to get the maximum value from your points, the first step is to have an understanding of how much these points could be worth. So when rewards are cash back rewards, they’re easy, 1 cent is worth 1 cent, but travel points can be more difficult. NerdWallet does a deep dive analysis on the current value of many top airline and hotel programs. We can link to that in the show notes, but each different kind of point or mile will be worth different amounts. And so having a basic understanding of the average current value of these points will really help you make some smart redemption decisions.

Sean Pyles:

Well, are there places where people should maybe avoid using their points?

Erin Hurd:

Yeah, so I would watch out for the options we see more and more of these days to redeem your points directly at stores. So at Amazon, for example, when you go to checkout, I’m sure you’ve probably seen the option to pay using your points. They have lots of different kinds of credit card rewards points available, and it makes it really easy. You feel like you’re getting stuff for free if you’re using points instead of actually using your real credit card, and that feels good. Getting free stuff feels good. Sometimes using your points can even be the default payment method at some of these stores without you even choosing it. So I would watch out for that. The good news is it feels like you’re getting free stuff, but the downside is that you’re often getting poor value for the points when you use them this way, unfortunately. You’re paying for the convenience and the store is betting on people not really understanding or questioning the value of your points. So for example, if you use Chase Ultimate Rewards Points at Amazon checkout, they will be worth 0.8 cents each. But those same points can be worth up to 1.5 cents each when you use them to book travel through Chase, depending on which Chase credit card you have. Or sometimes you can even get higher than 1.5 cents if you transfer them to travel partners. And so that’s a big difference there.

Sean Pyles:

Quick note that Chase is a NerdWallet partner, but that doesn’t affect how we talk about them. So Erin, you are a credit card expert. Do you have a hierarchy for maybe the best to worst ways to use your credit card points?

Erin Hurd:

So I have a lot of credit cards. I have a lot of different points in various different loyalty programs. So for me, I’m doing a lot of mental gymnastics, deciding if it’s a good deal or not when I redeem my points. But here are some of the things that I’m considering in my head when I’m deciding. So I’m thinking about the expiration. Are these points going to expire? Thankfully, most points don’t expire as long as you have the credit card still open.

Or for some of the travel points, if there’s some activity in your account every 18 to 24 months, your points won’t expire for the most part. But if you anticipate closing a card, make sure you can use all those points first, even if you’re not getting the best value. Because points in some airline and hotel programs, they can have a hard expiration date even if there is activity in the account. So that’s the first thing I would look at, are these points ever going to expire?

Sean Pyles:

And even if someone’s points won’t expire soon, it’s likely a good idea to use them sooner than later because inflation is decreasing the value of our credit card points, right?

Erin Hurd:

That’s right. Holding onto a whole bunch of points is not really a good investment strategy because you’re not earning any interest and you are definitely going to be a victim of inflation at some point or another.

Sean Pyles:

All right, so what other questions are you asking yourself as you think about what points to use where.

Erin Hurd:

I’m considering if I have a realistic use for these points in the next year or two. It can be really easy to hoard these points, even inadvertently, in order to save them up for a big trip or a big someday aspirational something. But if you’re hanging onto those points for years and years, it really just isn’t a great strategy because the points are worth money. But those points, like I said, they’re not earning any interest, they’re just gathering dust in your account, and really the travel redemption options, if that’s what you want to use your points for, those options are always changing and they’re often getting devalued, and it’s completely out of our control. And so I say it’s better to use them now even if it’s for a lesser value.

Sean Pyles:

Yeah, I recently found myself in a similar situation of inadvertently hoarding some points. I had this credit card that I took out years ago because it gave me a decent amount of points at the pump, but then I eventually stopped using that card as frequently, but I had a bunch of points racked up and they were just sitting there. I would get emails every so often from this credit card saying, “Hey, you want to use your points on something?”

So I went into their online store. When you log in, you can get random things like sunglasses or Stanley Cups or what have you. And I bought myself an Apple TV basically for the sake of using the points, but I did wonder whether I was making the most efficient or optimized use of those points. So I don’t know. I would love to hear how you think about these online storefronts that credit cards have. Do you think these are a good use of credit card points or not so much?

Erin Hurd:

It really depends. Usually they’re not the best value. Sometimes the credit card issuers will run specials where buying items with your points, and usually it’s only specific items, it’s not all the items, but maybe items that no one’s really buying, and that’s why they’re going on sale with the points. Sometimes it can be a decent deal. I’m recalling in recent memory, Chase has offered a 10% bonus on Apple products through their portal on occasion. So that can be a good use of points if you’re in the market for an Apple product anyway. But for the most part, I would say do the math, compare how many points they’re asking to the cash price, and just make sure that you’re getting a decent value.

Sean Pyles:

Any other questions that you ask yourself as you’re thinking about where to use your points?

Erin Hurd:

Yeah, especially in terms of shopping. I’m thinking about can I get more value for myself if I redeem these points for cash instead of using them for shopping? Like we’ve been discussing, some of the options to use the points at checkout are convenient, but you’re paying for that convenience. So here’s another example for you. Citibank issues Thank You Points, that’s their reward currency. And those points can be redeemed through PayPal, if you check out at PayPal, for anything that you’re buying for a rate of 0.8 cents each. Now, in most cases, those same points could be redeemed for cash at 1 cent each. So if you’re going to use them through PayPal for 0.8 cents, you might as well take the couple of extra steps and redeem them for cash and then use the cash to buy whatever you were going to buy for PayPal.

Sean Pyles:

And a quick note that Citi is also a NerdWallet partner, but again, that does not affect how we talk about them. Your example there underlines a certain skepticism that I have about all of these corporate partnerships in the credit card space. Like the PayPal Citibank collab seems like it could be a good deal for customers, but as you just outlined, it isn’t so much. So should people in general just be wary of these deals that they see between different companies or are they sometimes actually a better deal for us?

Erin Hurd:

I rarely would say that they’re a better deal. Sometimes they are as good of a deal as you could get in other circumstances, but oftentimes they’re not. So I would just really advise understanding how much your points could be worth, and if you can take that extra step to redeem them from cash and then use that cash, you’re probably going to be better off.

Sean Pyles:

All right. And as ever, ask yourself “What’s the catch?” Well Erin, thank you so much for talking with us.

Erin Hurd:

Thank you so much for having me.

Sean Pyles:

And that’s all we have for this episode. Remember, listener, that we are here for you and your money questions. So send them our way. You can call or text us on the Nerd hotline at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected]. Visit nerdwallet.com/podcast for more info on this episode. And remember to follow, rate, and review us wherever you’re getting this podcast. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

This episode was produced by Tess Vigeland. Sara Brink, the best audio editor in the world, mixed our audio, and a big thank you to NerdWallet’s editors for all their help.

Source: nerdwallet.com

Apache is functioning normally

August 7, 2024 by Brett Tams

Speculation is now mounting that the Fed — which opted not to lower rates at its July meeting despite slowing inflation — might not wait until its September meeting to make its next move.

While the Fed rarely takes emergency action, some are calling on the central bank to do so in the face of economic uncertainty and renewed fears of a looming recession. The stock market plummeted and the bond market tumbled on Monday. The decline was largely in response to international market plunges and Friday’s jobs report that showed a slowdown in job growth. Unemployment rose to 4.3% in July — its highest level since October 2021.

Today some traders, economists and commentators are calling on the Fed to make an emergency rate cut. The fear is that the Fed has waited too long to take action to lower rates.

Did you know…

An emergency rate cut is an unscheduled action the Federal Reserve takes to reduce the federal funds rate in between scheduled meetings of the Federal Open Market Committee (FOMC). It only happens when there’s a significant economic crisis at hand.

Jeremy Siegal, a prominent economist and professor emeritus of finance at the University of Pennsylvania Wharton School of Business, called on the Fed to make a 75-basis-point emergency cut in the next week and an additional federal funds rate cut at its Sept.17-18 meeting . As of today, traders are projecting a 60% chance of an emergency 25-basis-point rate cut in the next week, Bloomberg reports.

During a CNBC appearance today, Austan Goolsbee, Federal Reserve Bank of Chicago president, declined to answer when asked if the Fed would make an emergency rate cut.

The Fed’s actions on rates — cut, pause or raise — impact banks, markets and consumer products such as credit cards, mortgages, auto loans and student loans.

Even if the Fed doesn’t make an emergency rate cut, it’s near certain that the FOMC will do so at its upcoming meeting. The futures market’s CME FedWatch Tool currently pegs the likelihood of a September rate cut at 100%. It also shows a strong odds — about 80% — that the Fed will make a 50-basis-point cut.

If the Fed cuts rates by 50 basis points in September, or sooner, it would be the largest decrease since the Fed lowered rates at the start of the coronavirus pandemic.

The Fed makes emergency cuts when need arises

There’s precedent for the Fed to take emergency action — it has done so seven times. The most recent was on March 3, 2020 when the market dropped due to panic in the economy due to the rapid onset of the coronavirus pandemic. At the time, the Fed cut the funds rate by 50 basis points, which put rates at 1% to 1.25%. Then at the Fed’s scheduled meeting in March 14-15, 2020, it cut rates again to 0% to 0.25%.

There were three emergency rate cuts during 2001, largely in response to the tech bubble burst, as well as the Sept. 11 terrorist attacks. During the 2008 financial crisis, the Fed made two emergency cuts in January and October of that year. The Great Recession resulted in historically low rates that lasted for several years.

The Fed has made just one emergency hike: In April 1994, the Fed increased rates from 3.50% to 3.75% in response to a rise in inflation.

The Fed’s April 1994 emergency rate hike was the most aggressive upward move it would make until June 2022, when inflation spiked to a 40-year high and the Fed raised rates by 0.75%. It then raised rates at its subsequent July 2022, Sept. 2022 and Nov. 2022 meetings. The Fed continued raising rates until July 26, 2023, when it set the rates to 5.25% to 5.50%. The rate has remained unchanged since then.

(Photo by Andrew Harnik/Getty Images News via Getty Images)

Source: nerdwallet.com

Hanover Mortgages

The Refined Mortgage Lending Company & Home Loan Lenders

Personal Finance

Apache is functioning normally

Talk about money early

Consider charging rent

Help with specific purchases

Set realistic deadlines

Help them build their own wealth

Protect your own finances along the way

Apache is functioning normally

Episode transcript

Apache is functioning normally

Stop “doom loops” and connect consumers to humans

Simplify subscription and membership cancellation practices

Stop companies from masking bad reviews or creating fake ones

Crackdown on customer service chatbots and A.I.

Improve health care coverage customer service

Require airlines to provide automatic cash refunds

Streamline communications between parents and schools

What’s next?

Apache is functioning normally

Episode transcript

Apache is functioning normally

Apache is functioning normally

Go back-to-school shopping for dinner

Establish new study habits

Offer electives

Enlist a teaching assistant

Apache is functioning normally

The Fed makes emergency cuts when need arises