I'm so glad you're with us on the Clark Howard Show, where our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life. In today's episode, you may save and save, but you never feel like you have enough. What does it take for you to feel good about your finances? Later, so many scamsters out there taking advantage of people right now who are searching for jobs. There's something I want you to know about how easy it is today to get scammed by fake job listings. Talk about kicking people while they're down looking for a new job when they need one. So opposite extreme here. In the United States, we have the largest number of people that are in the mass affluent category we've ever had. Incomes used to not be as widely skewed in the U.S. as they are now. And we're in a position now where roughly 30% of Americans are doing, when you look at the income side, doing really, really well. and this is going to sound tone deaf to people that are struggling just to pay basic bills every day but I want to address people who are earning what is a really good amount of money from a paycheck or owning their own business or however it is they earn their money at the same time for people who are if I'm talking to you you're one of the people who's making what seems like it would be a great amount of money, and you feel insecure. You feel like, I'm not getting anywhere. What is that about? There's a thing about our culture that has only been magnified by the impact and influence of social media that Americans feel like, even when they're making a lot more money, that they're actually, this is going to sound weird to somebody who really is struggling, but they feel like they're struggling financially. And part of it is illusion and part of it's real. So I want to drill down to you as an individual, wherever you are on the income scale, once you've reached the point that you're making enough to deal with life's basics, From that point forward, I want to talk about something that, although it's not unique to American culture, it's more amplified here, that we tend to have a tendency here that as we make more, we feel like we have to show it in certain ways. What we drive, where we live, where we vacation, all that. you see it in when people that are from more affluent households are looking at where they're going to go or where they have already gone on spring break. And if you're in this category, you know exactly what I'm talking about. Well, mom and dad, they're going to blah, blah, blah. And we're going to that? I mean, there's these expectations that get built up as kids are around kids who have more. There's a certain affluenza that takes hold. And there's also this thing where parents, even if they don't have kids, adults who are making more money, they feel like if they're really going to fit in in their income group, that they got to add on this and this and this and this and this. And could be private club, could be having the fancy luxury vehicle instead of a regular vehicle, could be moving to a fancier house, a bigger house maybe, than you're ever going to need. All these things happen that make us feel like we're losing control. And that control is lost two ways. One, rising expectations. And two, the rising levels of debt. These two things are kind of in parallel, where as our income goes up, you know what should be going up faster? How much money we're putting aside. Because if we've already taken care of life's everyday expenses, the temptation is just too great to amp up life. But if instead, if what you amp up first is paying yourself first, and you don't have the temptation to have to buy a new fancy vehicle that maybe you can't afford to write a check for. Let me tell you something. If you're making big money and you're buying a vehicle, it should be a vehicle that you can hand over a check, pay cash for. It shouldn't involve a loan or a lease. I'm not trying to guilt you here. I'm trying to deal with the insecurity factor where you take control more of your life, what's happening in your life. If you're in a position where you're in really nice earnings years, I want you to act like a bear preparing for winter and hibernation in that I want you to store up extra money to deal away with financial insecurity, to build security in your life. Not that money is like something you should worship, but the absence of money is something that creates a lot of problems in life. And if you're making a lot of money and you're still having to borrow to do this or that or the other thing, you got to rethink what you're doing to create that safe space financially in your life. End of lecture. Was that too guilt-ridden? I don't think so. I love your phrase. You like to say people sometimes want to be all flash and they have no cash. All flash, no cash. You don't want to be that way. And it happens a lot in families. There are a lot of people, the average American would be shocked that people that are living in the fancy neighborhood, driving the fancy vehicle and all that, are having to pay bills just like they do because they've adopted such a high octane lifestyle. Yeah, and it can be very stressful. Okay. Marianne in Pennsylvania says, My Experian credit score is 839. My oldest credit card is a Citibank with no yearly fee. I have an American Aviator slash Barclay credit card with no yearly fee as well. Citibank has told me the Barclay American Aviator account has been acquired by them. I believe this will make me have two Citibank credit cards, which I will be able to link in their system. The new card will have a yearly fee. I don't see a benefit to having two cards from the same bank. If I cancel either card will it lower my credit score I earned points with my American Aviator I can find a lot of information on the conversion other than that the yearly fee will now apply Okay So gosh I been asked about this a lot Not here on the podcast and YouTube show. Not yet. But I guess I've run into so many travelers and airports that they ask me about this. So this is how it works. The Barclays program, as the portfolio was bought by Citi, there were two Barclays cards that had no annual fee. There's only one Citibank conversion that has no annual fee. So if you go to the, I don't know how much you like to fly American, but if you want to earn points on American and be able to fly for free, And American, by the way, has a much more favorable redemption system than the other two full-fair airlines, Delta and United. You just contact Citi, tell them you want to have the other new conversion card that's available to people going from Barclays that you don't get an annual fee. Now, if I remember right, the one that they would have moved you to from the free Barclays that has the fee is a $50 fee. And again, if you fly American a couple of times a year or more, that card may be not the right one to have if you did choose to have a fee. I would go up or down. I would go to the roughly $100 card that has more benefits, or I'd go to the free card, maintain the credit you have available. You've got this great credit score. You don't want to reduce your available credit. And what I don't know from what you said is how many other financial institution credit cards you have. If Barclays and Citi was all you had with one each, I would want you to get another card. It can be no annual fee. We've got a great list of cashback cards from another issuer so you have lines of credit with more than one financial institution other than just city. And that list is at Clark.com. Margaret in Georgia says, I recently had a job change and I have questions about my HSA. Last year, thanks to your advice, I started thinking about my HSA for its triple tax benefit and left my contributions in it. Currently, I can still contribute to make the match contribution for 2025, but my accountant advised me I will not get the payroll benefit. I'm likely to get another high deductible qualifying insurance, COBRA or the marketplace, to continue HSA contributions, again, without the payroll benefits. Is it still the best move to max my HSA contribution even without this benefit? Currently, it's with a, they name the bank, but can I move that money and make new contributions to Fidelity? Yeah, you want to do this without delay. And her question did come in before tax day, so I'm not sure if that was her. deadline for making those HSA contributions for last year. So sorry about that. But with what you said that you want to continue in HSA, you're in a likely a marketplace HSA eligible plan now. The employer provided plan you're in is one of the ones that has a lot of fees that are passed on to you. They don't have good low cost investment options. Move all that money that you have from the legacy employer HSA, move it all to Fidelity. Fidelity will help you with the procedure to move your HSA there. And contributing to the HSA long-term, if you can afford to, is so to your advantage, even though you're not going to get the triple tax benefit, you're still going to get a wonderful double tax benefit in the HSA. And remember to keep your medical receipts all through the years, because if later in life you want to go back and do look back and do a tax-free withdrawal from the HSA, doesn't have to be withdrawn in the same year as the expense. You just have to have proof of the unreimbursed expenses you've had through the years. Ron in California says, I'm writing regarding the notification that Chase intends to reduce the limit on my Visa card to align with my current usage. While my monthly charges, primarily utilities, average around $200, I'm concerned that a significant reduction in my total available credit will negatively impact my debt-to-credit utilization radio and consequently my long-term FICO score of 800+. Given my many years of excellent credit history with Chase, I would like to request that my current limit remain unchanged. Are there any alternatives to increasing my monthly spend that would allow me to maintain my current credit line? Right. So we addressed this six weeks, eight weeks ago. So a lot of the big card issuers, you know, they're very small. They're very small number of banks that dominate credit card issuance in the United States have overwhelming market share. Citi, Chase, Capital One, to name the three. I think they are the three dominant players now in credit cards, but that doesn't mean there's nobody else. But the problem is delinquencies on credit cards and outstanding charge volume is way up. And a lot of the issuers are really freaking out. They're worried people are going to take the very large amount of available credit that they have. They may lose their job. They start paying their bills by just charging up on the credit card and then the credit card companies exposed. So it's not just Chase. We keep hearing from people who do light use of a credit card that they're getting these notices that their credit limit is going to be reduced. If you want to remain with a card with Chase, you have to play the game their way. And so they, to their credit, different based on what you've said from other issuers. They're telling you that if you don't increase the usage of it, they're going to cut your limit way down. If you can and you want to stay with Chase, you start charging more on that card and just pay it off and you'll preserve your limit. Otherwise, while you still have this card, go ahead and get a card from someone else. If you're a member of a credit union, I'd like for you to go grab a credit union card or another issuer other than one of the big three. And then you can close this account. The closure of the account, it'll be okay because look where your score is. As long as you've replaced it, what I call hopscotching, you've gone ahead and gotten a new card and then you close this one, you will preserve your credit integrity and your credit scoring. And this is one that we're gonna hear more and more of as inflation looks like it's the genie's out. We're gonna have more inflation again for a number of reasons, and the economy is slowing at the same time And there a hint of possibility that the economists at these banks are really worried about that I mentioned a few times over the last year which is that we headed towards stagflation. And stagflation is an ugly economic condition with both a sluggish economy and inflation growing. And I don't mean to depress you, but that is actually a decent possibility now that is magnified by deficit spending going on in the country and what we're spending right now on the military is leading to a greater chance of stagflation. coming up ahead. To stick with this theme, job market's tough right now, and there are people out there making it tougher for you. I'm going to tell you what I want you to watch out for and how to deal with it. So you lose your job or you're at a job you don't love, and you're looking for a new one on various multi-employer websites. Maybe you see something on LinkedIn, something like that, you see a job posted is available. So there's a gray area and an ugly area that is unfortunately way too common right now. You'll see a job that is a fake listing, and it actually does turn out to be from a legitimate employer. Why would an employer post a job that doesn't exist? What a great question. There are any of a number of potential explanations, and there's a lot of upset about employers doing this. And then there are the absolutely fake employment listings that are being done by con artists that are trying to either steal your money or steal your identity or some combination of it or to get you voluntarily to pay money because it's part of some kind of supposed background check or employment application fee or whatever fish story they tell you. Now, there's a simple thing that you should be doing with any employer listing that's listed anywhere, social media, I don't care where it is, I want you to not trust and go verify that that job really exists. How do you do that? Simple. You go to an employer's own website and most employers on there will show what jobs they're hiring for at their own website. And if that job is posted who knows where and not on that employer's website, odds are there actually is no job. And it could be the beginning of a con or it could be, I don't know what employers, what reason they want people's information on file. Who knows? But you look there. Second, if you are active on LinkedIn and you have people on there who you know of who work for a particular employer that's got a job listing, contact them and say, hey, what do you know about this job? That's going to be a bit of truth serum. It also may give you a leg up for that job. But when you are looking at a potential job listing and you've met with no one, if you've done anything, maybe you've done some kind of texting with someone who's supposedly with the employer. And then they want to, well, let's proceed with the application. And they're trying to get your social security number, all kinds of personal information. And you have not actually been able to fully verify. you're actually dealing with a real person at that employer who's actually a real decision maker on hiring and you've been unable to verify that job is real, you don't fill out that online application because you don't know who you're really giving that information to that could be used against you. I can't believe I have to say stuff like this. But we live in an era that you'll hear in so many different things how I have to also add or straight on address the element that's trying to separate you from your money or clone your identity. And so you've got to be on your guard because the fake jobless thinks that's just a pretext to be able to get your money or do other harm to you. I hate it when somebody already is like, I'm just trying to get a job here. Okay. We're going to go to questions now. William in Georgia says, how do you feel about this website? I don't want to say that on the show. Is this too risky since it's not FDIC insured? Oh, it's so past not FDIC insured. And I guess. Do you want me to name it? No, I'm thinking through because I don't want people to think this is the only organization doing the MO that I'm going to talk about. So there are a number of supposed opportunities right now where you are promised you can earn double digits on your money. And you're lending into situations your money is being used for generally the generic term is promissory notes. Somebody owes money. They can't pay it. This particular outfit is geared towards people who have defaulted on student loans is their main thing. So these are people who are already in default. But you're promised that if you become part of lending that defaulted person money, you're going to lend it to them at a really high rate. You're going to get this huge amount of interest. And talk about risk. Oh, my goodness. And this is just one of probably hundreds of such pitches going on for different organizations where you can earn far higher than the three point something percent you can earn in savings or CDs right now. that you can earn three, four, five times that. But are you ever going to see that money because you're doing ultra high risk lending with no guarantee you're ever going to see the money you lent back? Perry in California says, I have maybe 18 credit cards, most accumulated by getting card signup bonuses. I use maybe three cards regularly and pay all charges off every month. I imagine many of these cards will be closed due to not being used. Is it better for me to close them instead? FYI I have a credit score of 830 and would not close the oldest card or the card with the largest limit Waiting for your expert advice Just leave them be Eventually, some of the issuers will say, yeah, we're closing this one. What if they have annual fees? Does that make a difference? Yeah, I mean, if you've got annual fees and you've got a score that's near a perfect score and you want to close some that have annual fees that you're not using, fine if you're getting no benefit from them. Do you know that it's now common with people playing the game, Perry, that they have as many as 30 cards now? Wow. I could never keep track. Yeah, but the companies are counting on you not doing the gaming because now a lot of the issuers have restrictions like Chase was the first one as the biggest issuer, biggest financial institution. Chase is now bigger than the next three banks combined. Wow. Anyway, so they have specific rules how many times you can apply for cards with Chase in a so many month period to try to deal with people that are taking advantage of all these rewards. and more and more issuers are mimicking Chase with doing so as well. But it has worked for you. Your score is phenomenal. And the only outside risk you face is that you have a card you're not using. Somehow a criminal gets a hold of the number of and they start charging. But as you know, as long as you notice that those charges are there and you dispute them within 60 days, you're not responsible for those. I don't see any reason for you to do anything different, Perry, because you're benefiting from all the rewards. The banks are, they think they're clever as could be, offering all these things, hooking people. But you've been able to make it work completely to your advantage. And you've got a score that almost nobody has for your credit score. Ben in Wisconsin says, Clark, I have a question about funding flight school. My son is a junior in high school. He should have his private license by the end of this year. We're trying to decide if he should attend a flight school that offers degrees or private flight school separate from pursuing a degree elsewhere. The big issue is funding. Attending a four-year university with flight school would require us to get a loan for $100,000 to $150,000. Is it worth the risk since there is a high earning potential, or is it better to pay as he goes, but possibly limit job opportunities? If you're willing to share, I'd be interested in the path your son is taking. Thanks for the ongoing great advice. Well, Ben, here's my son's path. It's not a straight line. Grant started flying when he was 13, got his private pilot's license virtually the day he was eligible, which was when he turned 17. and he has a lot of hours. He started at a four-year university and their flight school. And then he decided that there's going to come a time, Ben, for your son and mine where he came to me and he said, Dad, they're not going to need me in the cockpit way before I would hit retirement age with the changes in automation. Eventually, planes are going to be fully autonomous, automated. If they need anybody, for a while, until people get comfortable, there will be one person. And he said, I want to change my degree major in college. He's finishing his sophomore year. He's getting a degree in finance. And he's now flying at an outside flight school. Now, outside flight school is expensive. But the biggest problem you're going to have at most universities that offer a degree program, a bachelor's degree in professional flight, is that the students are graduating without a lot of hours. The advantage my son has is also a disadvantage. He's flying a lot of hours, but he's very close by probably like this summer, he'll be able to start flying for money and he'll be earning the remaining hours he needs towards being a professional pilot and flying for one of the airlines. He'll be able to do that getting paid to do so instead of paying for those hours. It's always a difficult mix. Every young person going to flight school has this dilemma that your son is facing. There is no one right answer, whether he would be better served going to an outside flight school or going to a university-based. Now, I'm going to throw in some additional information that you're probably already on top of, but knowing the advantage of going to a flight school that qualifies for 1,000-hour certification versus a flight school that could be a university or private flight school that requires 1,500 hours for your son to fly for an airline. And so if your son has a well-thought-out path to get those hours as a flight instructor or doing other jobs where you get the hours on somebody else's cost instead of his cost, having to get the 500 extra hours once you get a paying job is not that tough to then be able to fly for one of the airlines. You don't need that 1,500 to fly charter. So that's a lot of information for people who are not into this conversation, Ben. But I wanted to tell you that your son, you also could talk to 100 pilots and you get 100 different pieces of advice. So you just take the compilation of advice you get and you or your son or you and your son figure out what is going to be his best path to ending up a professional pilot in the cockpit. It's great. He's found a passion that he loves, just like I've seen with my son. And for my son, he now goes to school 12 months a year because when he's not at university getting requirements completed for his finance degree, he's flying. And for him, the hours he's flying, it's not school. It's a joy for him every time he gets in a plane. And I hope that we had information today that brought value into your life, brought joy into your life today, that you learned something that you can take and use in your life. because everything we do here is for you. Your empowerment with knowledge so you can save more, spend less, and avoid getting ripped off. We'll see you on Wednesday.
