519: HSA vs. FSA and When to Drain Your Emergency Fund to Pay Off Debt

BiggerPockets Money Podcast

BiggerPockets

Investing, Education, Business

4.6 • 2.9K Ratings

🗓️ 12 April 2024

⏱️ 40 minutes

🔗️ Recording | iTunes | RSS

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Summary

Want to know how to avoid capital gains on your next home sale? If you tune in, you may dodge a quarter-of-a-million-dollar bullet (or more!). What about investing in one of the most tax-advantaged accounts that almost EVERYONE should have but most people don’t? What do you do when a family member asks to borrow money from you but has a bad track record with keeping their personal finances together? We’re getting into it all and more on this finance FAQ with Amanda and Scott! We get a ton of personal finance questions through the BiggerPockets Forums and our Facebook Page, so we decided to round up some of the most common ones and answer them for you. First, we’re talking about how to dodge capital gains tax when selling your home. Then, a concerned listener asks whether they should take out a loan on a family member’s behalf. A high-income earner wants to know whether renting or buying is their best bet, and we share whether paying off your mortgage early is a mistake! Got a medical expense coming up, or just want to boost your retirement investing? We’ll answer whether an HSA (health savings account) beats an FSA (flexible spending account)—but make sure you get this one right. If you invest in one of these accounts the wrong way, you’ll be throwing money away. Finally, a debt-free chaser asks whether they should use their emergency reserves to pay off debt or keep slowly slogging away with the snowball method. In This Episode We Cover How to avoid capital gains tax when selling your primary residence HSAs (health savings accounts) vs. FSAs (flexible spending accounts) Whether or not to use your emergency fund to pay off credit card debt Why you may want to reconsider loaning a family member money Whether to buy or rent in today’s housing market (EVEN with low money down) Pay off your mortgage early or invest the rest of your money? And So Much More! Links from the Show BiggerPockets Money Facebook Group Network with Other Investors on The Path to FIRE Through the BiggerPockets Forums Finance Review Guest Onboarding Join BiggerPockets for FREE Mindy on BiggerPockets Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Money Moment Find an Investor-Friendly Agent in Your Area Find Investor-Friendly Lenders Fidelity Investments She Wolf of Wall Street Website Emergency Fund: How Much Do You Really Need in 2024? How to Pay Off Credit Card Debt FAST ($30K+ in 1 Year!) Renting a Home Is Financially Better Than Buying—Wait, What?! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-519 Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	On today's episode we're going to be pulling your questions from the bigger forums to your trademark on that particular term.
0:06.8	Love it made it up just now and the Facebook group.
0:09.2	That's right Scott. I love doing these episodes because we get to really zoom in and get under the hood on a couple of real life and sometimes complicated financial situations.
0:18.0	And today we'll be covering health savings accounts versus flexible savings accounts. What are they? Is one better than the other? Should you have both? All those types of questions.
0:27.0	We're going to get into all kinds of fun stuff, like Amanda said. That will also include things like how to avoid defer or deal with capital gains taxes.
0:37.0	We're going to talk about when it's acceptable to put no money down on houses.
0:40.0	We're going to talk about lending money to friends and family and whether you should do that or not.
0:44.4	And we're also going to talk about credit card repayment and emergency funds and when it's proper to do one or the other.
0:51.2	So it's going to be a fun episode. All
0:53.0	fun topics, all controversial topics. So stay with us, you're going to
0:55.4	want to listen to this one. Hello hello hello and welcome to the
0:58.1	BiggerPockets Money Podcast. I'm Scott Trench and with me today is my co-host
1:02.2	Amanda Wolf.
1:03.0	Hi Scott, it's always great to be here.
1:05.0	As always, we're here to make financial independence less scary
1:08.0	and less just for somebody else.
1:10.0	To introduce you to every money story because we truly believe financial freedom is attainable for everyone
1:14.0	no matter where or when you're starting.
1:17.0	Okay, let's get started.
1:18.0	The first question we have here comes from our forum and it reads,
1:21.0	my partner is planning on selling her condo, However, I am in the midst of purchasing my first property and we plan on living together. So where can she move her money after selling in order to avoid capital gains taxes. What do you think
1:34.4	Scott? All right a couple of frameworks that we have to work through to
	...

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