How to Finance Home Schooling Your Children – Kiplinger’s Personal Finance

Ryan Ermey: If the pandemic has you weighing the costs and benefits of homeschooling your children you’re not alone. It’s a complicated and personal decision though. And Kiplinger.com online editor Andrea Browne Taylor is here to help you weigh the pros and cons in our main segment.

Ryan Ermey: On today’s show, Sandy and I discuss what to do with a 401(k) if you’re leaving your job, and we also get into a new batch of our wackiest PR pitches. That’s all ahead on this episode of Your Money’s Worth. Stick around.

Ryan Ermey: Welcome to Your Money’s Worth. I’m Kiplinger’s associate editor Ryan Ermey joined as always by senior editor Sandy Block. Sandy, how are you?

Sandy Block: Good, Ryan.

Ryan Ermey: And today, we are going to be — in our main segment, anyway — talking to Andrea Browne Taylor, because it’s become obviously much more in the front of people’s minds, the possibility of homeschooling their children, and so that will be the topic of our main segment today.

Ryan Ermey: And something that dovetails into that is that lots of people are staying at home with their kids. If their kids are home doing school remotely, one of the parents has got to stay home. So, and a hat tip here to Daniel Milan of Cornerstone Financial Services, and Nick Fecorai, who sent the pitch. We do have to give credit where credit is due when we receive good pitches. But the pitch here is all about what are you supposed to do with your 401(k) plan if you leave work to stay home with the kids?

Sandy Block: Right? And this comes up, this isn’t a unique situation. This comes up often when parents decide they need to step out of the workforce. Often it’s the woman, but not always, and parents want to step out of the workforce for a while. Maybe they’re leaving their jobs for a few years until their kids are older.

Sandy Block: And, obviously, this has accelerated now, because for some people it’s not a choice, the kids are home and so maybe they don’t have a job that allows them to work from home so they have to quit. And the question is, what do you do with your 401(k) when that happens?

Sandy Block: And as I said, we got some great tips from the folks at Cornerstone, but the first thing I will say is avoid at all possibility — unless you’re absolutely broke — cashing it out, which a lot of people without very large balances or young people are inclined to do.

Sandy Block: If you cash out your 401(k), you will pay taxes on it, plus a 10% early withdrawal penalty if you’re under 59 1/2, and if you have little kids, you probably are. And that will take a quarter to 30% of your 401(k), not to mention that you will permanently reduce the amount that you’ll save for retirement. So really, really try very hard not to cash it out.

Sandy Block: Another option that makes a lot more sense is to roll it into a traditional IRA. Financial services firms will line up to help you do this. They love to do this, do a rollover. They’ll do all the work for you. One of the nice things about a rollover is that it will give you maybe more investment options than you had in your company 401(k) plan.

Ryan Ermey: Right. You don’t have to choose from the menu anymore.

Sandy Block: Right and the other thing it will avoid — I think this probably applies more to smaller balances — is having an orphaned 401(k). We’ve written about this before. People who change jobs a lot just forget they have all these 401(k)s at old employers. If you roll it into an IRA, it’s yours, you’ll get the mail, you won’t forget about it. So that’s one good option.

Sandy Block: Another one is just to leave it in your current plan. Unless your balance is less than $5,000, they can’t force you to take it out. And if you like your 401(k) — a lot of times 401(k)s have really low fees; lower fees than you can get on your own — just leave it there until you’re ready to move on. Or maybe you go back or something like that, but as long as you keep track of it, there’s nothing wrong with doing that.

Ryan Ermey: Right. And one of the interesting things is you mentioned that a lot of the time you’re going to have institutional versions of mutual funds in a 401(k). So those will come with lower expense ratios. Now, you do have to weigh that against fees that whatever company that your firm uses to manage the 401(k), they’re going to charge you some kind of management fee. So you’re going to have to decide whether it’s worth it.

Ryan Ermey: It certainly may be worth it if you have access to funds that are closed to new investors or that are even closed to all investors. Since your company is an investor in this case, you have access to it. So for instance, if you’re in prime cap, Odyssey Aggressive Growth, which is a tremendous, tremendous fund that’s closed that I would have invested in if I had the chance, but it’s closed — it might be worth it to keep it in there.

Ryan Ermey: So, certainly worth weighing your options when it comes to the menu of funds available in your 401(k), versus what you can get in an IRA. You can also wait. If you leave it there, there’s nothing stopping you from then once you do reenter the workforce, you can transfer your old 401(k) into the new 401(k), at your new employer.

Sandy Block: Right. And now, not all companies allow you to do this, but in recent years more companies have made that possible. The appeal to this strategy is, again, you’re consolidating your accounts in one place. If you really like your new employer’s 401(k), then you can move that money in there and invest in those funds.

Sandy Block: As you mentioned, it might be institutional, have really low fees. Again, you’ve got it all in one place. So if you think you might be reentering the workforce, you might want to leave it alone. You might want to leave it in your 401(k), until you find a new job.

Ryan Ermey: Now, one thing I did want to ask about here. You had mentioned off the top, rolling it into a traditional IRA. Now, that’s the case if you have a traditional 401(k). Now, some companies offer a Roth 401(k), which is what I have at our company. In that case, you can just roll it right into a Roth IRA, right?

Sandy Block: Right. And that’s a nice option because, as you know, when you have a Roth IRA, you don’t get an immediate tax deduction, but your earnings grow tax-free. And, if you wait until you retired to take your money out, all withdrawals are tax-free. You can always withdraw the amount of your contributions with no penalty or tax, which is why a lot of financial advisors say a Roth is a good source of emergency funds, because you can always take out what you put in. So, yeah, if you’ve got a Roth 401(k), that might be a smart thing to do with that as well.

Ryan Ermey: And the last thing I would point out is that if you are going to roll it into some kind of IRA — whether it be traditional or Roth, depending on the status of your 401(k) — go ahead and shop around among the brokerages: A) to find one that you will like, and we do have a ranking that I did on online brokerages that’s available on Kiplinger.com. We discussed it on the last episode of the podcast without you, Sandy. I know you were devastated.

Sandy Block: I missed all the fun. Online brokers, I live for that.

Ryan Ermey: Yeah, me too. The other thing to shop around for if you’re more or less agnostic to where you’re going to hold the IRA, which is fair enough. If you’re someone who’s going to leave it there, set it and forget it, a lot of brokerages have offers depending on how much money that you transfer in.

Ryan Ermey: If you have a substantial amount of money in a 401(k), and you’re transferring over, a lot of brokerages will give you a cash bonus of some sort . . .

Sandy Block: They will pay you. They will pay you, yes.

Ryan Ermey: . . . depending on how much money it is.

Sandy Block: Yes.

Ryan Ermey: Look, I think you can get up to $2,500 at some places for transferring in a million dollars, so it’s not necessarily going to be great.

Sandy Block: It’s free money.

Ryan Ermey: But look, if you’re transferring money anyway.

Sandy Block: Yeah.

Ryan Ermey: In gambling circles, sometimes people say, “If a hundred dollar bill was on the other side of the street, you’d probably cross the street to pick it up.” Right?

Sandy Block: Yes.

Ryan Ermey:  I think. Free money is free money, so if you’re going to do the rollover, shop around, see what you can get, make sure you can compare brokerages, go ahead and head to kiplinger.com and read my story about that.

Ryan Ermey: Thanks again to Cornerstone Financial Services for the pitch. We really appreciate it. And if you are leaving your job, make sure you weigh your options in terms of what you’re going to do with your 401(k).

Ryan Ermey: Coming up, find out what it will likely cost per kid to set up a school at home. That and more next.

Ryan Ermey: We are back and we’re here with Andrea Browne Taylor. She is the online editor of kiplinger.com and she has a story up on the website now about the finances of homeschooling your kids, which will also appear in the November issue of Kiplinger’s.

Ryan Ermey: Andrea, thank you so much for coming on.

Andrea Browne Taylor: Thank you for having me on.

Ryan Ermey: So, and a note to the listeners here, Andrea and I are both recording in Washington, D.C., which is undergoing an enormous thunderstorm right now. So if it sounds a little like a Vincent Price background, that’s what’s going on. So let’s start with this top line question here. What is the average cost per kid to homeschool, and what is likely going to be as a parent, your biggest expense?

Andrea Browne Taylor: Well, the average cost for homeschooling a child — it typically ranges from about $700 to $1,800. And what that includes is your school supplies, the curriculum plan that you buy for your child, which is an age-appropriate education plan, any field trips you may decide to go on, as well as extracurricular activities.

Andrea Browne Taylor: Now, that price really is going to depend on your child’s age, because obviously older kids and teens are going to need school supplies that costs more than what you would need for a preschooler or a child that’s in the first or second grade.

Andrea Browne Taylor: And some of the things that we’re talking about here are a scientific calculator so your teen can do their algebra homework or computer software they may need like Microsoft Word to write a book report.

Andrea Browne Taylor: When it comes to the biggest expense, I would say that definitely what some parents might be surprised by is the cost of the curriculum. And what that is, it’s essentially a detailed outline — and it usually comes in a book form — of various educational strategies that help guide Moms and Dads throughout the teaching process.

Andrea Browne Taylor: And some of these books, they’re all-encompassing, meaning that they include multiple subjects, such as math, language arts and history, all in one book, while others focus on a single subject. Now, in addition to suggested lesson plans, they also include suggestions for cognitive development activities for younger kids, as well as social skill recommendations.

Andrea Browne Taylor: So if you’re planning on buying a curriculum plan that covers multiple subjects, you can definitely expect to pay more compared to a version that covers just one topic. So if you’re interested in homeschooling or you’re seriously considering it, I would definitely recommend doing just a simple Google search using the term “homeschool curriculum,” because that’s a pretty popular one, and you’ll find a wide range of options that will pop up at various price points.

Andrea Browne Taylor: For example, in the story that I wrote for the website, I found a plan for children ages five through seven that covered five different subjects and it costs $710 by itself.

Andrea Browne Taylor: And then, there was another one that focused solely on math for first graders that costs $660. So just taking that into consideration, things can get expensive pretty quickly, especially if you’re planning to buy everything new and not secondhand.

Sandy Block: So, Andrea, you mentioned buying things new. What are some ways that parents can reduce the costs of some of these expenses, because it really does sound like it could add up?

Andrea Browne Taylor: Yeah, it definitely can add up. So, again, taking the curriculum plan in mind, when you’re buying things brand new from specific homeschool publishers, such as Bookshark or Moving with Math, which are a couple of pretty popular ones, the curriculum is a pretty big chunk of your annual homeschooling cost.

Andrea Browne Taylor: So what a lot of seasoned homeschool parents will do to help cut down on the cost is they will buy a used curriculum plan from somebody, or from other families who may have children that are moving up to the next grade level and they no longer need those materials.

Andrea Browne Taylor: You can try finding used books by connecting with these parents through, there are a ton of online Facebook groups, or on your neighborhood listserv with other homeschool parents.

Andrea Browne Taylor: Another expense that I think is definitely worth mentioning that can take a really big bite out of your budget is textbooks. For children who attend public schools, they’re provided textbooks for the entire school year free of charge, but for homeschooled families, the parents have to foot that bill themselves.

Andrea Browne Taylor: So textbooks are definitely another item to consider buying secondhand. And if you’re talking back and forth with another parent on one of these listservs who has books that they’re trying to sell, you definitely want to make sure that the books are still in very good condition before any money is exchanged. Don’t feel like you can’t ask them to see pictures of the books from multiple angles while you’re discussing the details of the transaction via e-mail.

Andrea Browne Taylor: If you’re purchasing from someone in your neighborhood — someone who’s the next block over or something like that — you could simply ask to make the payment in-person and have it be contingent upon an in-person inspection of the books. You want to make sure that all the pages are still intact and that the books are actually in the condition that the seller says they’re in.

Ryan Ermey: That’s like my old college days. I swear half of my bookshelf still has those little yellow used saves stickers on all the books.

Andrea Browne Taylor: Yeah, for sure. For sure.

Ryan Ermey: So not to step on Sandy’s toes here, but let’s talk about taxes. Now, are there tax breaks for homeschoolers — and one that a lot of people are probably curious about, can you avoid paying taxes for public schools if you’re not sending your kids to them?

Andrea Browne Taylor: Okay. Yeah. That is a hot topic for sure in the homeschooling community. When it comes to that, there are a couple of things that you want to keep in mind. Number one is that even if you decide to pull your kids out of your local public school system, you still have to pay the local school taxes if you own your home.

Andrea Browne Taylor: So someone who rents their home and sends their kids to public school doesn’t have to pay the local school tax, but a parent who homeschools and is a homeowner does. This has been a very longstanding point of contention for parents and families in the homeschool community, because those local school tax fees are included as part of the overall property tax bill. You can’t simply pick and choose what you are and what you are not going to pay.

Andrea Browne Taylor: Another thing with taxes is that there are no federal tax breaks for homeschool parents, but there are a very limited number of states that do offer tax breaks. And those states are Illinois, Indiana, Louisiana and Minnesota. Each has their own stipulations for parents to follow in order to qualify for these particular breaks, so you really want to do your research on those guidelines based on the state in which you live.

Andrea Browne Taylor: And just a quick example of how specific these particular qualifications are based by state, in Minnesota in order to qualify for their K through 12 education credit, your child must be attending kindergarten through 12th grade at a qualifying homeschool, and the related expenses must be for non-religious materials required for what they deem a normal day of school. And all that really entails are things like textbooks, school supplies, things of that nature.

Sandy Block: So, Andrea, this is something that I’ve seen cropping up since the pandemic is that groups of parents are setting up learning pods for their kids. What are they, and are they a good idea?

Andrea Browne Taylor: Oh yeah, learning pods or homeschool co-ops, they are definitely top of mind right now, but they have really been a thing, so to speak, in the homeschool community for many years. The reason why they’re getting so much attention now is essentially because of the pandemic, and for parents who would normally send their kids to public schools, having to suddenly figure out what they were going to do once the school year started, if their local district resumed in-person classes and they just simply were not comfortable sending their kids back.

Andrea Browne Taylor: So, again, with the learning pod, this is where I would say about maybe three or so families with children who are around the same age agree to split the costs and the burdens of teaching their kids collectively.

Andrea Browne Taylor: And the participating families will generally divvy up the hosting duties from week-to-week, set guidelines for movement outside of the pod that everyone, and this includes any outside tutors that these parents may choose to hire to help educate their kids, because some families do decide to do that, everybody must follow these guidelines to help limit everyone’s exposure to COVID.

Ryan Ermey: So in the story, you mentioned that some parents can save through a Coverdell Education Savings Account. How can parents qualify for one of these and, in basic terms, how do they work?

Andrea Browne Taylor: Okay. So, yeah, this can get pretty technical, so I’ll try to keep it as basic as I can. But, essentially, the Coverdell ESA is a custodial account that is offered by the federal government, and parents who file a joint tax return and make less than $220,000 annually can set one up for their child who is under the age of 18.

Andrea Browne Taylor: They can contribute to it. They can make tax-free withdrawals throughout the school year to help cover elementary and secondary school expenses. Family members and friends who make less than $110,000 a year can also make contributions to these accounts, so there are definitely income limits in terms of who can and cannot contribute to one.

Andrea Browne Taylor: However, the really important thing to know is that the annual contribution limit for this type of account is just $2,000. So once you’ve hit that amount, you’re done for the rest of the year. So homeschool parents can use a Coverdell if they meet certain criteria that qualify their homeschool as an elementary or secondary school in their state.

Andrea Browne Taylor: So for example, in Maryland in order for a homeschool to qualify as a state-approved school, it has to be registered with the state-approved school umbrella program. And what that involves for parents in that state is that their local elementary or secondary school must assign a school-based teacher to assist with grading papers and tests, as well as issuing progress reports.

Andrea Browne Taylor: There definitely may be some hoops to jump through, depending on where you live. A good resource that I found while researching this piece that parents should definitely check out is the Homeschool Laws by State tool on the Home School Legal Defense Association’s website. It lists the homeschool requirements for all 50 states and the District of Columbia. And you also want to be sure to check out your state government’s website just to get further clarification on the homeschool requirements where you live.

Sandy Block: So, Andrea, what’s something from your reporting for this story that surprised you and you think parents might not be thinking about if they’re considering their options for homeschooling?

Andrea Browne Taylor: Well, I would say one of the overarching sentiments that many of the parents that I talked to who have been homeschooling multiple children for years, is that if you’re hesitant about homeschooling simply because of the perceived lack of social interaction your kids might experience, you shouldn’t be.

Andrea Browne Taylor: And they say that’s where the extracurricular activities that you plan for in your homeschool budget come in handy. And what we’re talking about are things like signing up your son or daughter for a youth soccer league, or having them volunteer in their neighborhood with other teens that are around their age, or having your little kids participate in regular story time or play groups with other families in your neighborhood.

Andrea Browne Taylor: You’ll likely find that, by default, this will become more of a priority — especially since your child won’t be sitting in a traditional classroom with 20 other kids every day. So it will be more top of mind for you to seek out these opportunities for them to socialize with other kids their age and it won’t be as much of a hassle as you think it is.

Andrea Browne Taylor: One more thing that I want to mention is that a lot of them said, you really don’t have to go broke to homeschool your kids. Take advantage of any of the deals that you might come across along the way. For example, if you’re taking children on a field trip, be sure to frequent places that either offer free or discounted rates for homeschooled children and their parents, because those types of establishments do exist.

Andrea Browne Taylor: And if you become partial to a particular homeschool publisher when you’re looking for textbooks and curriculum plans and things of that nature, definitely keep an eye out for sales throughout the year. Some of them do offer sales, maybe once or twice a year, either during Black Friday or right at the end of the school year, as they’re trying to clear out their inventory to make way for new books for the upcoming school year. You want to be sure buy all your materials then so you’re not spending a small fortune on those items.

Ryan Ermey: Well, all fantastic advice. Homeschooling, obviously, a much more prevalent option these days, given what the pandemic has done to the whole picture for education. Be sure to check out Andrea’s story on the website and in the November issue of Kiplinger’s Personal Finance, which contains all of the information that you just heard and much, much more. And, Andrea, thank you so much for coming on.

Andrea Browne Taylor: Thank you.

Ryan Ermey: Are you really in danger of fraudsters electronically stealing information straight from your pockets? Nope. It’s Wild Pitches next.

Ryan Ermey: We are back. Before we go, it’s our favorite segment Wild Pitches. Tales of our wackiest pitches from PR professionals. And, Sandy, what do you have for us?

Sandy Block: I have one that falls into our favorite category — wild pitches with dubious surveys, Ryan.

Ryan Ermey: Ah, yes.

Sandy Block: This one was sent for some reason, and you’ll see what it’s about, it makes some sense to me, but it was sent by a company that said it would save you money on WiFi.

Ryan Ermey: Okay.

Sandy Block: WiFi phone calls or something. But it’s to pegged to National Financial Awareness Day, and I’m not quite sure what day that is, we may have missed it.

Ryan Ermey: Why not?

Sandy Block: And this survey is, as I said, it’s by the leading pioneer of money, saving WiFi-first calling, is about how much people hate to pay taxes. I don’t know what that’s got to do with WiFi, but . . .

Ryan Ermey: It’s like three different things.

Sandy Block: I know.

Ryan Ermey: WiFi, financial awareness and taxes.

Sandy Block: So remember we used to get these all the time? What young people would give up to get rid of their student loans.

Ryan Ermey: Right. Drew Cloud.

Sandy Block: And they were standing on a pile of fire ants, it got worse. Well, this is almost as bad. This is what people would do if it meant they never had to pay taxes again. It says, and you’ve got to weigh in on these, Ryan, if you agree. It says 42.5% of Americans said they would give up watching sports.

Ryan Ermey: No. Nope. Sorry.

Sandy Block: 37% would give up alcohol.

Ryan Ermey: No.

Sandy Block: No, okay.

Ryan Ermey: 0 for two.

Sandy Block: 12% would give up sex.

Ryan Ermey: Nope. 0 for three.

Sandy Block: No. Hit the IRS. 12% would give up TV. Only 6.2% would give up their cell phones.

Ryan Ermey: Wow.

Sandy Block: So twice as many would give up sex than give up their cell phone if it meant they never had to pay taxes again.

Ryan Ermey: Wow. That might be the story right there. People like their phones more than they like . . . I guess some people, it just dries up after a certain age.

Sandy Block: Well, how often do you use your phone is all I want to say.

Ryan Ermey: Yup.

Sandy Block: So I was digging through this press release. Who are these people? And I never found a methodology. Never. What I found was a fun interactive quiz which asked me the same questions. And that, apparently, is how they came up with these numbers. People took the quiz and said, “What would you give up to never have to pay taxes again?”

Ryan Ermey: So 62% of people who were bored enough to take this quiz.

Sandy Block: That’s right. But I believe — maybe you can tell me a little bit more about WiFi-first calling, Ryan — and I’m a little clueless on it, but I’m assuming this is a younger crowd. And if you’re young, honestly, your taxes are not that high. They’re certainly not high enough that you would give up watching sports, having a cocktail or giving up sex. If people legitimately said they would do this, I think they’d think they’re paying a lot more in taxes than they actually are is my takeaway here.

Sandy Block: And I guess the other thing I would just throw out is, even though it’s September, I’m already starting to think about our year-end tax guide, which will tell you how to save on your taxes and is going to be particularly complicated this year, because some folks are going to have to file in two states because they worked somewhere else during the pandemic.

Sandy Block: But we will tell you how to save on your taxes both in December, and again, we will revisit it at tax season, so you don’t have to give up TV or sex or sports, or even think about doing it. Just pay your taxes.

Ryan Ermey: Yeah, we never advocate avoiding your taxes, but we certainly do advocate . . .

Sandy Block: Legally reducing them, and then you can have the best of both worlds. You can pay your taxes and you can still have fun.

Ryan Ermey: Exactly right. So I have a pitch that any journalist can really clock what’s going to be a bad pitch if the PR person is selling it way too hard, and this person makes about 15 jokes in the first paragraph.

Ryan Ermey: Safe and healthy morning. Good morning is officially banished to 2021, along with combing hair before zoom calls. It’s already, that’s three off the bat. With such doom and gloom in the news, I thought I’d brighten your day with something fun and stupid. Why are you sending me anything stupid? This is my job.

Sandy Block: Yeah, ugh.

Ryan Ermey: And I learned about this and began packing my bags for Canada. In short, a new nightmare that isn’t orange, which once again.

Sandy Block: That’s making an assumption that I think is dangerous.

Ryan Ermey: Who do you think I am?

Sandy Block: Yeah, yeah. Right, right. Yeah.

Ryan Ermey: Contactless skimming.

Sandy Block: Okay.

Ryan Ermey: It’s a new method criminals are using to steal your debit and credit card numbers simply by aiming a device toward you. This devious little gadget can read your account info wirelessly, as if we needed something else to worry about, huh?

Sandy Block: So I’m moving to Canada because of contactless? I’m just lost already. I don’t know why I’m moving to Canada or why she’s moving to Canada.

Ryan Ermey: Because of the pervasiveness, Sandy, of a new pernicious form of identity theft, contactless skimming.

Sandy Block: I just want to say here that taxes in Canada are really high, so.

Ryan Ermey: Yeah. The choices really abound here. So obviously this person is working for a company that is aiming to prevent contactless skimming, and is selling a card that you put in your wallet called SkimSure, which sounds like a weight loss . . .

Sandy Block: . . . or a shark bracelet.

Ryan Ermey: Right. Well, doesn’t it sound like a . . .

Sandy Block: It does sound like a weight loss . . .

Ryan Ermey: . . . dietary . . .

Sandy Block: “Yes, with SkimSure, you too . . .”  — does sound like a white box . . .

Ryan Ermey: . . . meal replacement thing. SkimSure.

Sandy Block: Get your body in time for the beach.

Ryan Ermey: So it’s selling at Best Buy for $25, and it’s saying that it fits in your wallet and it jams the signals of these devices.

Sandy Block: It is like the shark bracelet.

Ryan Ermey: It really is. Instead of jamming up sharks, it jams up these devices that criminals, I’m assuming, wearing fedoras, and sunglasses, and trench coats are aiming at your pockets to steal your, your credit card information.

Ryan Ermey: Now, I did investigate this a little bit, just in case it was legit, and here’s what Visa says. “One common concern around contactless,” because I should know that this relates to the contactless credit cards, the ones that you can-

Sandy Block: . . . which are booming now. We’ve written about this because of the pandemic, they’re safe.

Ryan Ermey: Right, that you can tap rather than swipe or . . .

Sandy Block: People feel they’re safe. Yeah.

Ryan Ermey: Yup. So, “One common concern around contactless relates to the possibility of fraudsters using mobile payment terminals to skim the details from your card. In reality, this is extremely unlikely. Firstly, initiating a transaction while a card is in someone’s wallet is very difficult in practice — particularly, since a fraudster would need to know precisely where you keep your card and stand extremely close to you.”

Sandy Block: And during a pandemic that is just not going to happen.

Ryan Ermey: Like six feet, buster. Secondly, “Any money that is taken from a card needs to go somewhere. Visa payments can only be processed by terminals that are registered and audited for security compliance. To obtain an authorized merchant account a fraudster would need to take several steps that include registering with a bank or payment processor, providing their personal information, and meeting other know your customer requirements. Even if they did all this, it would be possible to trace the stolen money back to the recipient. At Visa, we are not aware of a case where a contactless card has been cloned to create a physical counterfeit copy of card. The details that can be, quote, skimmed, simply aren’t sufficient to enable this.”

Sandy Block: Okay.

Ryan Ermey: So look. I am certainly quoting the Visa company line here, and maybe I’m a sheep, and I’m in the pocket of big credit card. Who knows? Maybe I’m on the dole, but in reality, I think that you can probably skip the SkimSure, and . . .

Sandy Block: I think there are worst things to worry about.

Ryan Ermey: Yeah.

Sandy Block: And I think it is like the shark bracelet, because if you buy this card and nobody ever steals, it’s like if you have the shark risk and you never get bit by a shark, you think, “Well, it must work.” Right?

Ryan Ermey: It works.

Sandy Block: You buy this thing and nobody ever gets real close and steals your information, You think, “Well, I protected my information with my $25 slim card,” or whatever

Ryan Ermey: Well, if you bought this and the shark bracelet, you could be safe on both land and sea from . . .

Sandy Block: Sharks of all kinds.

Ryan Ermey: Sharks. Yeah, I was going to say, for all sorts of sharks. So look, nevertheless, you should monitor your credit account for suspicious charges and dispute any that you don’t remember making. And the other thing is that credit companies are really good about this. I’ve been contacted . . .

Sandy Block: Oh, me too.

Ryan Ermey: . . . by my credit card . . .

Sandy Block: Me, too.

Ryan Ermey: . . . any time that there’s been suspicious activity, even when that suspicious activity is me. So I’ve had some suspicious run-ins over the years. Well, sports gambling is legal in D.C., now, Sandy.

Sandy Block: I know, I know.

Ryan Ermey: I learned to not put that on your credit card, because you get a cash advance charge. Word to the wise out there, folks.

Sandy Block: Yeah, okay. Don’t do that.

Ryan Ermey: Gamble on sports with debit. But yeah, I think everyone can skip the $25 fraud blocker — and if any PR people are listening out there, we’re professionals. One crack, one clever thing, sure. But if you feel like you got to do a whole stand-up routine . . .

Sandy Block: That’s right. That’s what I thought. This person really wants to do stand up and has got another job and hates it and thinks he’s killing it. He’s just killing it.

Ryan Ermey: Best of luck. Head over to the Comedy Cellar if they’re opened back up skip the financial PR pitches. We’re not interested.

Ryan Ermey: And that will do it for this episode of Your Money’s Worth. For show notes and more great Kiplinger content on the topics we discussed on today’s show, visit Kiplinger.com/podcast. You can stay connected with us on Twitter, Facebook or by e-mailing us at podcast@kiplinger.com. And if you liked the show, please remember to rate, review, and subscribe to Your Money’s Worth wherever you get your podcasts. Thanks for listening.