In this episode, we answer another listener question about whether he should invest in a Traditional 401k, a Roth 401k, or both.

If you’re employed, chances are your employer offers a 401k. Normally, this would be a Traditional 401k, but check with HR to see if they offer both a Traditional and a Roth.

401ks allow you to invest your pre-taxed income, and sometimes employers will match up to a certain percent. If they do, take it — it’s free money. However, Traditional 401ks have a yearly limit as to what you can invest. Therefore, some employers will also offer a Roth 401k which allows you to invest after-taxed money from your check — there is also a limit too.

If you can afford to max out both, go for it. If not, go with a Traditional 401k, and anything over the limit to which you can invest, through that in the Roth — hopefully, your employer will do some matching there too.

Show Notes

Health Savings Account (HSA) — This is a savings account you can open to use for health-related costs.

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Are you stuck with a mortgage that is underwater?  We’ll craft an escape plan so you can save money and move on. An underwater mortgage means the balance remaining on the mortgage is higher than the fair market value of your home. 

In other words, you owe the bank more money than your home is worth.

A lot of people found themselves in this situation when the economy crashed in 2008.  Even at that time, interest rates were lower than you will generally average in the market.  And mortgage interest is tax deductible.  Money tied up in a house is inaccessible.  You can pull money out of the market and have cash in hand within a few days.

If you’re underwater, don’t overpay on your mortgage.  You’re only tying up more money.  Invest that money and get your average 7%.

Give some thought to doing what Matt did when he found himself underwater.  He moved in with his brother, paying a very low amount of rent and rented out his condo.  In some cases, you can get more in rent than what you are paying for your mortgage.  You just need a friend or relative willing to give you cheap rent.

A big housing bust like the one we had in 2008 doesn’t occur very often.  If you can afford your mortgage payments, hold onto the house.  Eventually, you will be above water and can sell the house if you decide to.  And maybe live in an apartment for a bit.  Owning a home is not all it’s cracked up to be and not necessarily still a part of the “American Dream.”

Show Notes

Mint:  Track your spending.

Betterment: The easy way to invest.

Vanguard:  Among the lowest fees in the industry.

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You have no idea where all your money goes, huh? I’ve been there before. I know it’s frustrating when you can’t seem to get ahead. If you are in this boat, you probably don’t have a budget or at least one that is working for you.

In order to start to making smart conscious decisions about your money, you’ll first need to get an idea of your overall financial health. Creating a budget will help you do just that. Remember, a budget is not a magic wand. It is a tool that will help guide you but it takes some commitment as well.

Full Article Here

Show Notes

Mint: The easy way to budget.

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We’ve all heard the cliché that if you’re renting, you’re wasting your money. But is that true? Is it better to rent or buy?

 Home ownership used to be a hallmark of the American dream achieved. It showed that you were an adult and that you had “made it.” But that is no longer the case for many young people. Lots of them have decided it’s better to rent than buy.

Earlier this year, US homeownership rates fell to a 48 year low. For those under age 35, the rate of ownership is just 34.1%. That is about half the rate of overall homeownership in the US.

Clearly, Millennials either didn’t get the memo outlining the American dream or they disagree for various reasons that renting means throwing your money away.

Full Article Here

Show Notes

5 Year Adjustable Rate Mortgage:  This is the mortgage that Andrew is leaning towards.

I Will Teach You To Be Rich: A great personal finance book.

The Simple Dollar Book:   Long considered a PF classic.

Betterment: The easy way to invest.

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Every time we make a purchase, we have to decide between using a credit card, a debit card, or cash. They all have their pros and cons. Will there be a clear winner? Credit vs. debit vs. cash: the ultimate showdown.

Those shiny credit card offers with their promises of free flights, and cash back can be seductive. We like our debit cards because they help keep spending under control. And some die-hards still like cash because it can make some purchases cheaper. What and when should you choose when it comes to credit vs. debit vs. cash?

Full Article Here

Show Notes

Mint: You should be using this FREE online software to track your expenses and setting up your budget.

American Express Credit Card: This is the credit card that Andrew uses to get cash back bonuses.

Discover Credit Card: This is the credit card that Matt uses to get cash back.

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Saving money can be hard and sometimes it feels like you’ll never get ahead. But saving money doesn’t have to be hard. We will show you how to save money fast and automate it to make the process easier and less painful. Most of us want to save money fast, and we know how to do it. But there are ways to make saving money faster and easier.

You can’t effectively save money fast without a budget. If you don’t know how much is going out each month, you don’t know where your spending leaks are. So if you want to know how to save money fast, setting up a budget is the first step.

Full Article Here

Show Notes

ZipCar:  Don't have a car? Don't want a car? Join this awesome car-sharing service.

Groupon & Living Social: Group buying coupon site. Get random stuff for at least half off, like restaurants.

Netflix & Hulu: Online movies and TV shows for just $8 a month each. Ditch cable and get one or both these packages.

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Welcome to Listen, Money Matters.  We are a personal finance podcast for people who love beer and swearing as much as they love money!

 Andrew is the finance expert. He’s always been a guy predisposed to ranting about money. His parents taught him the value of a dollar as a little kid. He has managed to build up an impressive portfolio at 28 and plans to retire at 35.

 On the other side of New Jersey, Matt, his co-host, is not very good with money. In fact, as he puts it, “I flat out suck with money and make things harder than they have to be.” But since early 2013, with Andrew’s help, he has managed to get his finances in order.

 There is a lot of personal finance advice out there but none of it spoke to us.  It was either for old people or people who already had some financial savvy.  We wanted a show that would help everyone but would be geared toward issues facing those in their twenties and early thirties.

 We plan to talk about every facet of personal finance, including getting out of debt, how to save money, and how to make more of it. We also want to talk about ways you can improve your life and make it easier.

 Tools to help you automate your finances, tips to improve your productivity, great beers you should drink.  We want to take the intimidation factor out of investing.  It seems complicated and it can be, but it doesn’t have to be.

 We also want to take away the taboos around money.  So many people feel ashamed because they think they’re alone.  Whatever money problem you are facing, there are others out there facing the same.

 So welcome to the inaugural episode.  We hope you’ll enjoy what we do!

 Show Notes

 Mint: The easy way to budger.

Betterment:  The smart way to invest.

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