Good morning and happy October!

Here’s a few Q4 money maintenance tasks to check off your list…

O pt out of useless subscriptions 🙅‍♂️
C ontribute just 1% more 👌
T ally up your net worth 📝
O pen a new rewards card ✈️
B eef up your e-fund 💰
E mbrace more frugality ♻️
R un around the house in the nude!… 🫣

(…because, why not? Just make sure the blinds are closed so you don’t accidentally flash your Amazon delivery person)

It’s going to be a great end of year financially —> Because YOU are doing the right activities to finish strong. 💪

TO DO

Rack up those reward points 💳…

We’re entering the most expensive months of the year. Holidays, presents, travel, etc…

So it’s even more important to make sure you’re using the right credit cards for the right transactions to maximize cash back and rewards! Use gas cards for gas ⛽️, travel cards for travel 🛬, and be sure to use an Uno Reverse card 🔄 when you want to stick someone else with the bill 🤣.

Now might also be a great time to open a new rewards credit card. With bigger than usual spending you can hit minimum spends quicker for welcome offers. Check out our CC search tool —> just sort by which cards are offering the biggest bonuses.

SAVING MONEY

How Power Couples Save Money

As the saying goes… “Two average people working together → will outpace one genius working alone.”

I firmly believe this to be true, especially when it comes to saving money and building wealth!

You and your partner might be very successful as individuals. But if you can figure out ways to complement each other even further, it’ll push you both to a whole new level…

Here are a few ways couples working together can crush their money game…

• Setting team goals: The more often couples discuss and hone in on specific goals, the more clear and vivid the next steps and action items become. Teamwork makes the dream work.

• Merge budgets / expense tracking: This doesn’t mean each partner can’t have separate personal “play” money… But merging budgets helps couples eradicate useless crap from their spending and funnel that money towards more mutually exciting pursuits.

• Maximize each other’s work benefits: Married couples can choose the cheapest/best insurance option, and list the other as a spouse for benefits. They can also choose to prioritize better retirement account options if one employer offers superior options than the other. Spousal IRAs (and Roths) are options for non-working partners too.

• Consolidating and crushing debt: The quicker a couple can squash bad debt (no matter who originally incurred the debt), the quicker they can start building a massive pile of wealth together. Join forces to ditch debt faster!

• Thoughtful gift giving: Instead of buying each other expensive gifts, financially smart couples give gifts that are tied directly to their shared hopes and dreams.

• Cheap and frugal hobbies: Spending time with each other doesn’t have to mean pricey outings or spendy dates. There are so many free and cheap things to do in every city, indoors or outdoors. You just need to find them and try them.

• Celebrating money wins: Celebrating milestones together (big or small) creates a positive atmosphere around money. It boosts morale and reinforces the beautiful reality that you are a team.

If you’re in a relationship and *not* working together on finances, this is your reminder to at least try. It can be more efficient, which is good. But it can also be more fun!

Related stuff:

• 🧑‍💻 Full Blog: How to Save More as a Couple

• 📚 Book Rec: Smart Couples Finish Rich, by David Bach

• 👩‍❤️‍👨 Merging Money: 3 Strategies to Combine Your Finances

TOGETHER WITH BETTERMENT*

Put your money to work

Betterment’s financial experts and automated investing technology are working behind the scenes to make your money hustle while you do whatever you want. Learn more

INVESTING

Target Date Funds — 101 📈

We talk about index funds a lot on the podcast.

But we don’t Target Date Funds (TDFs) quite as much and how they can also be a great fit for hands off investors.

Here’s how TDFs work at a glance:
They are very much a “set it and forget it” investment option. You just pick a single fund (based on the approximate year you plan to retire) and put all of your money into it over the course of decades. That’s right, just one fund. Easy peasy.

Over those decades, the fund will automatically rebalance, slowly morphing to become less aggressive with each passing year as you edge nearer towards retirement.

Here’s an example of what’s inside Vanguard TDFs 👇👇👇

Age 20 —> 40:
Early in your career, a TDF will have a very heavy stock position. The fund will often have an allocation of 90% stocks and 10% bonds.

Age 40 —> 60:
For the mid-late section of your career, the fund will slowly start to move you into more bonds and fewer stocks. Once you reach age 60, you might sit around the 60/40 stock/bond split position.

After 60:
Things get even more conservative from there as you approach full retirement age and start to make withdrawals and begin to live off your investments. The goal is to preserve capital and have much less volatility.

TDF Expense Ratios:
Some Target Date Funds are actively managed, so they come with a higher cost (like 0.5% - 1.5% expense ratio). That’s not good because fees like this will eat up your growth over years.

But there are many out there that are passively managed (like at Vanguard, Fidelity, and Schwab) so their expense ratios are typically closer to 0.05%. This is very close to most low cost index funds!

TDFs vs. Index Funds:
So, why would you choose to invest in Target Date Funds vs. Index Funds?

The biggest benefit is putting asset allocation and rebalancing on auto-pilot. You don’t ever have to review/change your stock/bond ratio, because it’s all done for you within the fund. It’s as simple as it gets and can make a lot of sense for hands off investors.

You also only need to toss your money into a single ticker symbol. You pick the TDF that’s closest to your likely retirement age and that’s it.

All in all, if you find index funds confusing or you’re constantly stressed about which funds to pick, maybe a Target Date Fund is best for you.

Related stuff:

• 📺 Vanguard TDFs: Here’s a list of all the Vanguard TDFs based on age group. Click the fund to read more about it.

• 📊 3 Fund Portfolio: An easy “index and chill” strategy via Bogleheads 

• 🎧 Podcast #341: How Matt & Joel Invest Their Money (approx 50 mins)

ICYMI

In other news…

85k Points! ✈️
Our favorite airline credit card has a killer welcome offer right now. If you fly Southwest a lot, this is the deal to jump on.

Hidden Fees 📈
Pretty revealing chart from the WSJ comparing different brokerages and their hidden fees for options trading etc. Turns out Robinhood is the worst offender for hidden fees, which is funny because they tout themselves as a rock bottom fee broker!

Underwater 🚘
A new report from CarEdge shows that 31% of American drivers who financed cars are now underwater on their loans, sadly. They owe more than what their car is worth! If you need to finance a car purchase, always choose a shorter finance term!

Cycles 🔄
A great read from Morgan Housel: Cumulative vs. Cyclical Knowledge… “Reading old finance articles makes you feel like the ancient past was no different than today”.

No Goals 🤷‍♀️
Ryan Holiday shares why he has “no goals”, and how he measures success instead. Basically, instead of attaching success to meeting specific milestones, true winning is when you actually enjoy the process and work your hardest, no matter the outcome.

iPhones 📲
Apparently 9 out of 10 American’s think iPhone’s are overpriced, according to WalletHub’s newest survey. But that doesn’t stop folks from forking over their hard earned cash to buy them, with 2 in 5 people willing to go into debt to upgrade to the latest model 😬

Change Rolling 🪙
Spare change hack: Don’t use those coin counting machines or pay fees at the bank to cash in your coins. Instead, many self-checkouts accept coins, so just dump all your spare change into those to pay for your groceries! (Cheers to Adriane for sharing this video in the Facebook group! 🙏)

ASK HTM

“Should I pay down my mortgage or make home improvements?” 🏡

This question popped up in the HTM Facebook group recently.

The short answer is: Paying down a mortgage will almost always have a higher ROI vs. making home improvements.

That’s because the most home improvement projects cost more money than the value they add to your house. Whereas paying down debt principal provides immediate and guaranteed savings.

Here’s the longer answer!

That’s it for now! Catch y’all next week!

Best friends out 🍻