Pod Insights The Clark Howard Podcast 07.08.26 The Clark Smart Way To Buy A Mattress / Student Loan Update About this episode The mattress industry is in chaos, and major brands like Sleep Number are facing bankruptcy. Clark breaks down how the mattress market became incredibly oversaturated and why traditional mattress stores have seen their business models become obsolete. While online shopping and warehouse clubs have revolutionized how we buy beds, the wave of recent bankruptcies poses a risk to consumers. Clark reveals his ultimate rule for buying a new mattress safely. Also, Clark addresses the looming crisis in higher education as federal student loan interest rates spike to 6.5%. With college costs and inflation stretching family budgets to the limit, Clark explains why you should never sacrifice your own retirement savings or saddle your children with a lifetime of crushing debt just to attend a "dream" school. Clark delivers a heavy dose of tough love and practical strategies for parents.
Plus, Christa shares your #AskClark questions and Clark gives his take. All this and more on the July 8, 2026, episode of The Clark Howard Show. Submit your questions: Ask Clark.
Buying A Mattress: Segment 1
Ask Clark: Segment 2
Student Loans: Segment 3
Ask Clark: Segment 4
Mentioned on the show:
The Best Place To Buy a Mattress - Clark Howard
Best Online Banks: Free Checking and High-Interest Savings Accounts
Fidelity vs. Vanguard vs. Schwab: Which Brokerage Is Best?
How Long Do You Need To Keep Tax Documents? - Clark Howard
Education Dept Updates Key Student Loan Guidance In Advance Of July Changes - Forbes
NYTimes: Education Dept. Lowers Student Loan Rates for Borrowers in Auto Pay
The Trump administration says it is cutting student loan interest. Here are some facts and context
The Right Way & Wrong Way to Use a 529 Plan That Doesn't Cover the Full Cost of College
Best 529 College Savings Plans By State
Trump Accounts: What You Need To Know - Clark Howard
Clark.com resources:
Episode transcripts
Community. Clark.com / Ask Clark
Clark.com daily money newsletter
Consumer Action Center Free Helpline: 636-492-5275
Learn more about your ad choices. Visit megaphone.fm/adchoices
Transcript 0:00 Speaker 00 This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed sponsored jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs.
0:35 Speaker 01 It's my pleasure to welcome you here to the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you to make better financial decisions in your life. In today's episode, I'm going to start with something we all use, unless you sleep on a mat on the floor, a mattress. Today, I want to tell you what a deal it is for you to buy a new mattress and why this opportunity also comes with hazard. Also in this show, there's been a lot going on with student loans, how the programs work,
1:18 Speaker 01 what the interest rates are, and what's happening with college tuition. So I want to make sure you are up to date. If you have a kid in high school, or you have a kid already in college, there's some things I want you thinking about because the old thing of being able just to borrow unlimited amounts of money for college, that is over. Right now, I want to talk about something that is a great opportunity for you. In an era of so much inflation.
1:56 Speaker 01 The cost of a mattress has been going down, down, down, down. Because flat out, the industry is going through a shakeout. There's way too many providers of mattresses, and not just in the United States, just around the world. The mattress market is overwhelmed with manufacturers, and it's why the industry is in bankruptcy court so much right now. Sleep Number Bed recently filed for bankruptcy. That's a well-known brand, but a lot of brands that have some recognition in the marketplace,
2:39 Speaker 01 not a lot, have gone insolvent just because the process of how a mattress is made and delivered was revolutionized by Casper. Casper was the company that developed the process, or at least popularized the process of making a mattress in the factory and then essentially putting it in the shrink ray machine so that it could fit. The whole idea was that you could drive home a mattress from a store in a Honda Civic.
3:20 Speaker 01 Think about before, the redesign of how mattresses were produced, what a hassle it was to get a mattress. So mattresses now can be purchased so many ways, online, delivered right to you by somebody like UPS or FedEx, by Amazon, at the warehouse clubs which sell massive volumes of mattresses now. Traditional mattress stores, so many of them have gone bankrupt because their method of selling has become essentially obsolete. The key in the mattress business now, because the normal mattress buyer is not going to
4:01 Speaker 01 a store, laying down on a mattress and saying, "That one's not quite right." And then you go try another one, try another one, try another one. Now you're buying something that may or may not suit you. So mattresses now are overwhelmingly sold with the right to return for a refund for a period of time, usually three months, because you just don't know, buying one of these shrink raid mattresses, if it's going to work or not. Now, there's a new risk with that, because with a lot of the mattress companies folding, you could buy one, think, "I really don't like this."
4:42 Speaker 01 "Oh, but great, I got three months to return it for a refund." And then, you find out they've gone bust, there's nobody to return it to, and you're out your money. So, one of the things I want you to think about is buy at a place that in addition to the manufacturer, has a right to return for a refund. Think of the warehouse clubs, where you have the period of time you can return an item, no questions asked, for a refund. Costco, with most things, there is no time deadline. So you have the ability to return an item within reason, for a full refund.
5:27 Speaker 01 And so the betting market offers what I always call hazard and opportunity. The price is so good right now, unless you conspire against yourself, and somehow you think you're going to get a better night's sleep if you spend a zillion dollars on a mattress, not my game at all. The hazard is, you get this great deal on one, that you hate sleeping on, and then you can't return it because the company's gone bust. So remember, that you want the double layer, the manufacturer's right to return for a refund, layered on top of the retailer's right to return for a full refund. And by the way, what does return mean?
6:13 Speaker 01 A lot of the companies say, well, go have fun disposing of it. We don't want it back. Cause what are they going to do with it?
6:23 Speaker 02 Right. All right. You ready?
6:25 Speaker 01 I'm ready.
6:26 Speaker 02 All right, let's go to questions that came in at Clark.com/ask. Joshua in Virginia says, I'll be receiving about $30,000 from an inheritance.
6:36 Speaker 01 Well, Joshua, I'm sorry about losing a loved one.
6:39 Speaker 02 Mm hmm. I'm looking to put it in a high yield savings account, HYSA. When I look at different HYSA's, they want to pay the interest rate up to a certain amount, like on $5,000. Is there a better option or will I have to ladder this money?
6:55 Speaker 01 Yeah, Joshua, there are organizations, there are banks, online banks that offer teaser rates on high yield savings accounts, but only do so on a small amount of money to try to attract larger deposits. Just ignore those and look for ones that want as much money as they can get from you and never more than quarter million in a single institution. You're not going to have to worry about that at 30. So if you go on, there are several lists, we've got one at Clark.com. There are many others out there where you can see who's offering the best deals right now. And they're not going to be the ones with the gotcha that only up to so much money.
7:39 Speaker 01 And because inflation has gotten worse, I'm going to throw in a little confusion. You may make more money right now if you have an account through Schwab, Fidelity, or Vanguard. If you're willing to put the money in a CD for a period of time, instead of in a savings account, if you can tie the money down for a while, you'll likely get more money through a brokerage. It's known as brokerage play CD with one of the big three.
8:12 Speaker 01 Low-cost companies to invest with. If you have an investment account with any of them, though, you also have the option of going into a money market fund with them that may outearn what you can earn in a high-yield savings account at shockingly low risk. In fact, if you go in a Treasury money market fund with one of them, it will be slightly lower risk than even what you get with FDIC insurance.
8:41 Speaker 02 Ed in Georgia says, "I'm the guy who has retained and filed all financial statements from the late 80s."
8:47 Speaker 01 I remember that. I remember we were talking about that.
8:51 Speaker 02 It was fun to hear that you had a good chuckle out of that one. I enjoyed it, too. I do have a follow-up question. How long should I retain all tax returns? I'm asking because I started a new job this year and I had to submit some W-2s from the early 2000s.
9:06 Speaker 01 You did not.
9:07 Speaker 02 As part of my background check, as proof that I was employed with a couple of companies that are no longer in business.
9:13 Speaker 01 Seriously? From more than 20 years ago? Who could do that?
9:17 Speaker 02 Lucky me. You already know I had those W-2s.
9:22 Speaker 01 All right. So you were a candidate of one for a job with this organization. Who else would be able, other than you, to produce W-2s from 20-plus years ago? Wow. Okay.
9:39 Speaker 01 So, tax returns. What I do is I keep all supporting documentation and my returns going back six tax years. And then past six tax years, I have copies of my returns going back to, gosh, the 1980s, I guess? You want the returns themselves because the IRS has no limit on when they can come back and say you failed to file. So having the return itself is valuable. The supporting documentation is worthwhile for the last half dozen years. And your situation is such an outlier.
10:21 Speaker 01 With you actually needing those W2s from out of business companies. Um, I would say that you're more likely to be hit by a meteor than to have to produce W2s from a generation ago. But you were the one person who said, see, see, I keep everything. It paid off.
10:49 Speaker 02 All right. Susan in Georgia says, here's another way to track subscriptions that you haven't already mentioned. Put them all on the same credit card, preferably not your everyday card. You'll have a complete list of them on every monthly statement.
11:03 Speaker 01 Susan, I love this. I love this so much. It helps with what I've talked about with the subscription creep and all the different things and trying to figure out what you've got that you don't really need. And you know how I go through our credit card statements? So there was a subscription for a streaming service called Fubo, which is one that sports nuts absolutely love.
11:36 Speaker 02 Mm hmm. I think you might've told this when you were doing the subscription thing, but tell it again.
11:41 Speaker 01 No, no. I just saw this.
11:43 Speaker 02 Oh.
11:44 Speaker 01 This week.
11:45 Speaker 02 Oh, uh oh.
11:47 Speaker 01 Hundred and nine dollars, 99 cents. So I clicked through.
11:51 Speaker 02 Ooh, wow.
11:52 Speaker 01 A month.
11:53 Speaker 02 Wow.
11:54 Speaker 01 So I clicked through and it's on a card that we have for our son for emergency expenses. And I said, Grant, what in the world is this Fubo thing for a hundred and nine dollars? He said, I don't subscribe to Fubo. I said, did you ever do like a free trial to watch some game you couldn't get elsewhere? He said, No? So I said, I need for you to figure this out. So he tries, he's got three different email addresses. He tries all three, none of them are Fubo.
12:35 Speaker 01 So we think that maybe somebody got his number and used it to subscribe. But I've been bugging him for the last two days to call Fubo and try to track this down.
12:50 Speaker 02 Wow.
12:50 Speaker 01 But if I wasn't checking the credit card statements, I wouldn't have known. But Susan's idea is awesome to use one particular card. Think of it using one of your back of wallet cards, the ones that you used to use, but you still have, but you don't really use anymore. And then you can put all your subscriptions on that and then you have an easy way to track them. Great suggestion.
13:16 Speaker 02 I love it. The only thing I couldn't do though is a couple of my cards offer me discounts on subscriptions or free. If I subscribe, I get money back. But I think you can, you know, that's one exception, but.
13:28 Speaker 01 Yeah, because your American Express pays for which one?
13:31 Speaker 02 I don't use American Express, but they do give you a digital entertainment credit on American Express. But a couple of my other cards, I get money off of my Peloton subscription. I get money off of my Apple TV. I get like actually a free Apple TV, stuff like that.
13:45 Speaker 01 But those things that are free, it's fine.
13:48 Speaker 02 Yeah, yeah.
13:48 Speaker 01 You don't have to track those.
13:49 Speaker 02 But you know, you never know. Maybe the deal goes away with that credit card and then you're stuck with a subscription you didn't realize you're paying for.
13:55 Speaker 01 Right. So again, Susan, this is part of being a member of Team Clark. I love it. Coming up ahead, oh man, something that's expensive. College. We're going to talk about how the rules of the game have changed.
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15:38 Speaker 01 So, college costs. Bad, ugly. The cost of borrowing money for college used to be really pretty friendly. Not anymore. The changes with the federal student loan program have become really tough on families. The interest rates that are in effect for this fall started about 6.5% on federal student loans. That's a lot of carry cost. And subsidized loans, you're not having to worry about that till you complete your studies. But most borrowing is unsubsidized federal, and that's over 6.5%.
16:20 Speaker 01 So, it's kind of like the mortgage thing. Home price is up, mortgage rates up, double whammy. Student loans, tuition costs were going steadily upward, and now the student loan rates going up. But there is some good news. One thing I've been happy about that's counterintuitive. I've been really happy that the amount you can borrow on parent plus loans or student loans, both has been capped. It used to be there was unlimited money available to borrow.
16:58 Speaker 01 And schools would manipulate parents and students into just signing, signing, signing for loans. And now that can't happen anymore because the amount you can borrow is capped. And that is forcing a change in colleges. That for more than a generation have been raising tuitions at three times the rate of inflation in the general economy. That is so over. But it means that if you have your heart set on sending your child to a school that is a zillion dollars and you don't have the resources to pay that.
17:42 Speaker 01 And you just want to do it. You want your kid to be able to go to his or her dream school. You are creating what can be a terrible hangover for your son or daughter later in life borrowing to the max that they can borrow. And then maybe even dipping their toes or fully jumping in for private student loans that often come with variable rates and get really ugly over time. Or you as a parent, sacrifice your own financial future to pay that money. What I'm trying to say is that parental guilt can be a self-destructive motivator.
18:26 Speaker 01 And there are so many college options at so many different tuition levels. And going to the it dream school that would create a massive amount of borrowing or parents who stop contributing to their own retirement accounts. So their kid can go to that school. And then way down the road, when the parents are in retirement and don't have enough money to live on, then the then adult children are like, gosh, mom and dad should have done a better job saving for retirement. With amnesia about what got them to where they don't have enough money.
19:10 Speaker 01 All right, I'm getting right here with brass tacks with the emotional things that are involved in decision making. And it is okay for you as a parent to say to your teenager, "We cannot afford that college." Period. Now, the compromise, the compromise is freshman and sophomore year at a far more affordable college. And the competition is generally much less to be a junior transfer than a freshman applicant anyway. So freshman year,
19:52 Speaker 01 even at expensive schools, a lot of times, you're in these factories of these big classes for the 100 level, what are they called, prereqs, or whatever they are, the classes you gotta take when you're first in school. Take those at a much more affordable place, and then go away for junior and senior year to where the dream is. Nobody really cares where you attended. They only care where your diploma is from. But truthfully, after you're out of school a while, nobody even asks where you went. Nobody cares unless
20:33 Speaker 01 your team's winning some sport. So be honest with yourself. Be honest with your son or daughter. Be careful with how much debt you're signing up for. And if it involves digging deep into the well that you have to go past these new federal limits of borrowing and dip into the private loan pool, I think it's time for a different priority in where you pick for a school. Every parent, every child, every family has to make this decision on their own. Because I'm getting into value judgments here. And it's not for me to decide. I'm trying to get the conversation in a different place.
21:18 Speaker 01 And one place is from very young, if you can afford it, funding a good 529 plan. Money grows tax-free, it's spent tax-free, and up to 35 grand. If a kid doesn't go to college, or doesn't need the money, or scholarship's out, well, it becomes a tax-free exchange into a Roth IRA, which gives your kid such a head start on having a comfortable retirement, with that money having had an opportunity to grow from being a single-digit age forward. Fantastic.
21:56 Speaker 02 All right. Thomas in Florida has a question, actually, about 529 plans. He says, I started a 529 account for my granddaughter that now has over $150,000 in it.
22:08 Speaker 01 Wow.
22:09 Speaker 02 But she does not want to go to college and has no further educational plans.
22:13 Speaker 01 Oops.
22:15 Speaker 02 Other than gradually transferring $30,000 to a Roth for her, what else will happen to this money? Over the next 20 years, there will be a huge amount of money that is locked in an inaccessible account. Help.
22:26 Speaker 01 Okay, so we got a few possibilities here, Thomas. That's a lot of money in a 529. That's not normal that somebody would have that much. But the Congress specifically made, you said 30, I had mentioned 35. Set this cap of 35 grand for money to transfer tax-free from the 529, unused into a Roth IRA for the benefit of your granddaughter. That will be a huge boost to her through life. The Congress set that limit because they were worried about really wealthy families using the 529 as a massive tax dodge to move money into a kid's hands,
23:11 Speaker 01 because the 529 contribution limits are quite large. And then allow money to grow tax-free in large amounts, I mean mega amounts, like your amount, I'd say. For many people would be considered to be a mega amount, 150,000. So Thomas, you have the option, you have another grandchild or great niece, great nephew, whatever, who needs help paying for college and you like to help them. You can change the beneficiary designation and use it for that person's college. That's in many families, what happens is when one child scholarship's out, doesn't go to college, whatever, it's moved to the benefit of another.
23:54 Speaker 02 But you don't want to do that until you've transferred that 30,000 in terms of that account.
23:59 Speaker 01 So do you know the IRS still has not issued the rules on how that works? If you change beneficiary designation on part of the money in a 529? It's still not clear at this moment. So on that issue, I can't answer that yet because the regulations still are not out.
24:20 Speaker 02 But I would say if you definitely want to transfer the 35,000 to her Roth, I would do that first, just in case, right?
24:27 Speaker 01 You can't, you can't right now. So with the Roth thing, you can, you don't get to do the 35 all at once.
24:33 Speaker 02 Right, it's seven or whatever a year.
24:34 Speaker 01 Seven, seven something each year. But if, let's say, there's nobody else you'd want the money to go to or anything like that, after you've done the 35 into the Roth for your granddaughter over the roughly five years it takes to do that, you could then distribute the rest to her and she would have to pay tax on the earnings plus a 10% penalty. But being in her twenties, odds are she won't be in a really high tax bracket. And so it would not be a brutal tax hit, except for the 10% penalty.
25:16 Speaker 02 Okay, Allison in Georgia says, "I have two sons, a rising sophomore and a rising eighth grader, and we are not many years away from college." So, we're not many years away from college. "I've been saving in their 529 accounts since each one was born. My question is, since you've already had kids in college, did you find the cost of attendance posted by your kids' schools to be in the ballpark for costs? Thank you for all your advice. I listen every week."
25:41 Speaker 01 Well, thank you very much. And two of the three kids, the college cost estimates for where they went were accurate. One who went to college in California, it was way more expensive than the estimate. And so, it generally will be in the ballpark on the costs. And speaking of costs, I forgot to mention, I said upfront, a good 529 plan. What makes a good 529 plan? You buy it direct from the 529 plan. No high commission salesperson
26:18 Speaker 01 involved. Two, there are good 529 plans and bad ones, even those sold directly. Although there are very few bad ones anymore that are sold commission-free. We do a guide that we revise continually on what are the best plans in the country, and we have a decision matrix for you in picking a 529 plan for your child, your grandchild, whoever it is you're setting up the 529 plan for.
26:49 Speaker 02 And Chase in New Mexico says, "I have two kids, a one-year-old and a three-year-old. I've been thinking about how to best set them up financially because right now, the biggest asset they have is time for investments to grow. I am on track for my own retirement. I've been saving a little bit of money for each of them in a 529, and that will be worth about 30K each when they reach 18. I also plan to open Roth IRAs for them when they have an earned income. But I would like to also start investing a little bit for each of them to use as a down payment or further boost their retirement. Should I open Trump accounts or open brokerage accounts in my name earmarked for them? Neither are eligible for the free Trump account money."
27:33 Speaker 01 You know, because of the way the Trump accounts are taxed, you are better off doing investment accounts for the kids when they're not eligible for the free money. Because the Trump accounts are taxed at ordinary income tax. So that's the highest possible tax. Where if you open investment accounts, they're taxed at the investment capital gains interest rate, which for people when they're first financially independent, they're not your dependent anymore, but they're in their twenties, usually will be at 0% or 10%. So it's far preferable to do an investment account than do a Trump account,
28:17 Speaker 01 unless you're getting the free money for the Trump account. Now, free money doesn't necessarily have to come just from being eligible under government rules. It also could be an employer that provides free money to the dependents of their employees. That would make it worth having a Trump account. But here's the downside potentially to doing the investment account, is that if you have a child who reaches adulthood and is quite immature, they have the ability to spend that money, which they don't easily in the Trump account, because of the way the controls work on it. So the investment account,
29:02 Speaker 01 truthfully, what a lot of parents do is they don't even tell their kids they have a custodial account that's an investment account. And they, they keep it just a little, a little secret. Not a bad secret, but a little secret. And wait till a young adult is mature enough to say, "Hey, by the way, we put this money aside for you long ago, and it's your money to do the down payment on your house or whatever." You gotta know the kid too, because some kids have spent every dollar that ever existed, and other kids are wired differently. So the maturity level and the outlook with money that varies from child to child,
29:47 Speaker 01 that's a key consideration when you let them know this money exists.
29:53 Speaker 01 And I want to thank all of you so much for being with us today. Thank you for joining us. This is an opportunity for us all to learn together, to be empowered together with knowledge, so that you can save more and spend less and avoid getting ripped off. And Friday, our next podcast, is when we get to hear how people feel ripped off by me. How bad is that? Anyway, that's when we do Clark Stinks. And you get to hear where I disappointed you, let you down, or misled you.
30:31 Speaker 01 And so, it's how I learn, how I can do a better job serving you on Clark Stinks. And if there's ever anything you're like, "Well, you really do stink, Clark." Just go to Clark.com/ClarkStinks and post away. And you get to maybe hear it coming up or see it this Friday. See you then.
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