S1: Take care and be on your guard against all covetousness,
S1: for one's life does not consist in the abundance of
S1: his possessions. Luke 1215. Hi, I'm Rob West. In a
S1: culture of instant gratification, it has never been easier to
S1: get what we want when we want it, even if
S1: we can't afford it, but at what cost? Today we'll
S1: explore the hidden dangers of buy now, pay later programs.
S1: Then it's on to your calls at 800, 500, 25, 7000.
S1: This is faith in finance. Live biblical wisdom for your
S1: financial decisions. Well, we've talked before about buy now, pay
S1: later options, BNPL for short and how they often lure
S1: folks into debt. But what was once reserved for large
S1: purchases is now showing up in surprising places like your
S1: next fast food run. Believe it or not, DoorDash now
S1: allows users to split food orders into four equal payments. Yes,
S1: your cheeseburger, fries, and drink can now be financed. If
S1: that reminds you of the old Popeye cartoons and the
S1: character wimpy saying, I'll gladly pay you Tuesday for a
S1: hamburger today, you're not alone. The difference is, wimpy was
S1: a joke. DoorDash is real, and the idea that you'd
S1: need a payment plan for a sandwich that's not just humorous,
S1: it's alarming. Buy now, pay later has moved far beyond
S1: furniture and electronics. It's baked into the apps we use
S1: every day, from fashion retailers to grocery delivery. Klarna, Afterpay, affirm, zip,
S1: Sezzle and PayPal are just a few of the major
S1: players fueling the rise of pay later options. In fact,
S1: according to Experian, more than 80% of U.S. shoppers have
S1: used some form of buy now, pay later programs. The
S1: Consumer Financial Protection Bureau has already warned that users who
S1: buy now and pay later are more likely to carry
S1: multiple balances, overdraft their accounts and experience financial stress. Why? Well,
S1: because it feels easy. It doesn't feel like debt when
S1: you're just approving four easy payments, but multiple purchases across
S1: several platforms can quickly stack up, and you don't realize
S1: the wait until it's too late. And make no mistake,
S1: these programs aren't interest free forever. Many of these services
S1: charge interest rates as high as 36% if payments are
S1: missed or extended. Let's look at a practical example. Say
S1: you order $60 of takeout through DoorDash and choose the
S1: pay later option. Well, that's $15 every two weeks. But
S1: if you're doing this with multiple meals a week and
S1: a couple of other online purchases, well, that adds up fast. Suddenly,
S1: your affordable splurges are competing with your rent. Or imagine
S1: buying a $3,000 couch through a buy now, pay later service.
S1: If you miss a payment, interest kicks in and now
S1: you're making minimum payments at 25% interest, that couch could
S1: end up costing nearly $8,000 after all is said and done.
S1: So what does Scripture have to say about this? Well, first,
S1: the Bible repeatedly warns us about the dangers of debt.
S1: Proverbs 22 seven tells us the borrower is the slave
S1: of the lender. And that's not just financial. It's emotional
S1: and spiritual too. Debt can bring unnecessary stress to your life.
S1: Distract your heart, and divide your devotion to God. Second,
S1: we must examine why we're tempted by these offers. Do
S1: we really need the item or are we just chasing convenience, comfort,
S1: or status? Are we acting from faith or impulse? In
S1: Philippians 411 through 13, Paul writes, I have learned in
S1: whatever situation I am to be content. I have learned
S1: the secret of facing plenty and hunger, abundance and need.
S1: I can do all things through him who strengthens me.
S1: True contentment isn't found in the ability to purchase. It's
S1: found in trusting God to meet our needs. So how
S1: do we respond? Well, practically build margin. If you want
S1: something like a couch, a new laptop, or even a
S1: nice meal, budget for it. Save in advance. Set up
S1: an automatic transfer into a want category and pay with
S1: cash when the time comes. You'll enjoy the purchase so
S1: much more when it's not followed by regret. And for
S1: those everyday cravings like takeout or impulse buys, try setting
S1: a weekly cash limit. Once it's gone, it's gone. The
S1: second way to respond is spiritually. Ask God to help
S1: you examine your heart. Are you trusting him with your
S1: provision or trying to manufacture your own comfort? Is your
S1: spending a reflection of contentment or a cover for something deeper?
S1: So the next time you see a pay in four
S1: button under your cart, pause. Ask yourself, do I really
S1: need this? Am I able to pay for it in full?
S1: And most importantly, does this reflect trust in God or
S1: trust in a payment plan? Avoiding unnecessary debt isn't just
S1: about protecting your finances, but also about protecting your freedom
S1: to live generously. All right, your calls are next. The
S1: number 800 525 7000. That's 800 525 7000. This is
S1: faith in finance. Live. We'll be right back. Stick around.
S2: The opinions offered during this program represent the personal or
S2: professional opinions of the participants, given for informational purposes only.
S2: Any information provided is not intended to replace advice from
S2: a financial, medical, legal, or other professional who understands your
S2: specific situation.
S3: Thanks for joining us today on Faith in finance live
S3: here on Moody Radio. I'm Rob West. As you can tell,
S3: my voice is a bit scratchy today. I feel great. Uh,
S3: just don't sound great, but nevertheless, looking forward to taking
S3: your calls and questions so long as my voice holds
S3: up today. You can call right now with your question.
S3: Whatever's on your mind today, 800 525 7000. Again, that's
S3: 800 525 7000. You can call right now. Um, before
S3: we head to those phones in the news today, uh,
S3: two Republican proposals could change how Americans save by offering
S3: tax incentives to encourage more savings. They're called MAGA and
S3: USA accounts. MAGA, supposedly short for money, account for growth
S3: and advancement and USA for universal savings account. Now, what
S3: are these in a nutshell? Well, the Well. The MAGA
S3: account proposes a $1,000 contributions from the federal government for
S3: every baby born between 2025 and 2028, whose parents have
S3: Social Security numbers. This is intended to foster financial literacy
S3: and encourage early investment in the stock market. Additional contributions
S3: of up to $5,000 annually could come from family, friends,
S3: and nonprofits. Funds could be used for qualified expenses like
S3: education or business startups, or home purchasing, while earning tax
S3: at lower rates. Uh Magas could be an alternative to
S3: a 529 plan, offering a bit more flexibility for withdrawals. Now,
S3: the Universal Savings Account, or USA account would offer tax
S3: advantaged savings to all US citizens, resembling perhaps a Roth IRA,
S3: but with fewer restrictions. Contributions could be made up to
S3: $10,000 initially, with a $25,000 annual cap. Supporters believe both
S3: plans could increase savings participation, though critics argue they mostly
S3: benefit the wealthy, although we've heard that before. Of course,
S3: the one big, beautiful budget bill you're hearing so much
S3: about will have to be passed with those provisions still
S3: in it for the president to sign it into law.
S3: So still a long ways to go, even though we've heard, uh, recently,
S3: in the last few days that that's been making some
S3: progress through the house. A lot remains to be seen
S3: about what happens when it gets to the Senate, and ultimately,
S3: what might get to the president's desk. We will certainly
S3: keep you posted, but very interesting. And I love the
S3: idea of additional vehicles to foster savings and investments. All right.
S3: We're ready to take your calls. Again, uh, sorry about
S3: my scratchy voice, but delighted to be with you today.
S3: Here's our goal to help you see money as a
S3: good gift from God. To give, to enjoy, to invest,
S3: to use for God's purposes, to bring him glory. To
S3: see God as your ultimate treasure, but also to help
S3: you heed the counsel of Scripture and apply that to
S3: the very practical decisions you're making on a daily basis
S3: in your financial life. So do you have a call?
S3: Excuse me? If you have a question, call right now.
S3: 800 525 7000. Let's begin today in Jonesboro, Georgia. Hey, Howard.
S3: Go ahead.
S4: Hey, Rob. Thanks for taking my call. Sure. The question
S4: I have is that, uh, my spouse and her brother
S4: are in the process of receiving an inheritance from an
S4: aunt that passed away in Jamaica. And, um, the question
S4: that I wanted to ask of you is, will the
S4: funds that they'll be receiving be subject to inheritance tax
S4: here in the US?
S3: Yeah. Good news. There is no inheritance tax at a
S3: federal level in the United States. Uh, so when it
S3: comes to inheritance. Um, you know, there could be, uh,
S3: estate tax. Although if they're in the state of Georgia,
S3: there would not be. But essentially, um, you know, the
S3: estate would be the one responsible. So this would be
S3: the person that passed away, the estate of the person
S3: that's providing the inheritance for any taxes due, uh, on
S3: the Jamaican property. But as far as an inheritance tax,
S3: there is none. Uh, so essentially, your wife and her brothers,
S3: $125,000 inheritance, uh, is free from U.S. federal and Georgia
S3: state inheritance taxes, if that's where they reside. Uh, the estate,
S3: you know, handles those, uh, those taxes before distribution. Now,
S3: what you would probably want them to check on is
S3: there's probably a filing that would need to be done
S3: with the IRS because the inheritance exceeds $100,000 in one
S3: particular year. This is not, you know, anything that has
S3: to be filed because there's a tax due. It's really
S3: more of a reporting. Uh, you know, document, I believe
S3: it's 3520. And it has to do with receiving that
S3: foreign gift. But again, no taxes due as a result
S3: of that. So they should be in the clear.
S4: Excellent. And what is that phone number you said form.
S3: Yeah. 3520. Um, and again you'll probably want to consult
S3: with a tax professional to ensure that that uh, is,
S3: is filed properly and then verify if Jamaica deducted any
S3: taxes from the estate side before the distribution.
S4: Right, right. Okay. Thank you so much, Rob. I appreciate.
S3: It.
S4: You're welcome.
S3: I hope she gets better. Thank you. Howard, I appreciate that.
S3: God bless you, sir. Uh, 800 525 7002 Spokane. Hey, RJ.
S3: Go ahead.
S4: Hey.
S5: Sorry I had to take you off loop there.
S3: No problem.
S5: So the situation is, my fiance and I were about
S5: to get married and we're trying to figure out what
S5: to do about, like merging the two homes, right? Two
S5: sets of households, two different houses. Um, but the disagreement
S5: comes where, um, I'm relatively debt free. I just have
S5: my mortgage. Um, I want to sell the second house
S5: and use that to pay off a lot of the debts.
S5: Like her HELOC, her two cars, some credit cards. Um,
S5: but she wants to keep the home and use it
S5: as a rental. So I think she's maybe looking at
S5: it as more of a long term investment, where I
S5: guess the disagreement that's happening right now is that I
S5: would rather get everything paid off and then take that
S5: extra money that's no longer going towards those payments and
S5: start pushing it towards retirement.
S3: Yeah. Yeah. Well, it's a it's a great question. And
S3: I think this kind of um, surfaces perhaps an initial
S3: bigger Conversation, which is just to make sure as a
S3: part of your premarital process, you guys are talking through
S3: a whole host of issues, but certainly related to finances,
S3: recognizing that, you know, we come with different backgrounds, different
S3: bents and wirings money was handled differently growing up, invariably.
S3: And that informs how we handle money today. And so
S3: merging that involves a lot of conversation. I think just
S3: to get on the same page about what is our
S3: lifestyle going to look like and how are we going
S3: to approach debt, and what about saving, and what about
S3: our giving and generosity? And how does that fit in?
S3: And certainly this would be one of those conversations. So
S3: I'm delighted to hear your thinking through that. Um, you know,
S3: I would be more inclined with you guys starting out,
S3: especially with there being a couple of mortgages on this
S3: potential rental that increases financial risk. And, you know, if
S3: you all don't have the means by which to fund
S3: retirement in a tax deferred environment, Apart from selling this
S3: house and freeing up that additional those additional resources, and
S3: given that we may be headed into a recession and,
S3: you know, that could affect your ability to put a
S3: renter in there. I mean, the last thing I would
S3: want is for you all to be starting your marriage
S3: with some financial stresses and clearly taking on a second home,
S3: even though I have no problem with rental properties. I
S3: love real estate as an investment, but you've got to
S3: be ready for it, both from a cash flow standpoint
S3: in terms of funding your lifestyle and other expenses, and
S3: covering the debt service if you don't have a renter. Um,
S3: but also just the elevated risk that comes from having
S3: a couple of mortgages on it. So I would lean
S3: more in your direction. Let's do this though. We've got
S3: to take a break. So I'll give you some follow
S3: up questions to ask after this. Stay with us. Great
S3: to have you with us today on Faith in finance. Live.
S3: I'm Rob West again with a scratchy voice today, but
S3: still taking your calls and questions feel good. Just don't
S3: sound great. Hey, before the break we were talking to A.J.
S3: in Spokane. He and his fiance are getting married next year,
S3: which is amazing. Uh, they're merging their assets together and
S3: wondering if they should retain, uh, two properties. One, that
S3: they would live in his place, but then her place,
S3: which has two mortgages on it currently, she would like
S3: to hang on to that and use it as a rental. Uh, A.J.
S3: would like to go ahead and sell that and use
S3: the money that they free up from that to begin
S3: to fund long term investments for retirement. Uh, A.J., I
S3: shared a bit of my thoughts on that. I would
S3: tend to be more conservative, especially with the high debt
S3: service you'll likely have. We can talk about some rules
S3: of thumb just to evaluate the merits of this property,
S3: and whether or not you should keep it. But even
S3: before that, uh, just talk to me about your situation. Um,
S3: you know, are you requiring the the rental income to
S3: service the debt and other expenses on that property, or
S3: would you once you combine your finances?
S5: So the plan is, um, I think the payment on
S5: that property would roughly be the mortgage payment would roughly
S5: be about 14. 1400 a month. Houses in that area
S5: typically go for around 2800 for rentals. Um, so but
S5: I don't know specifically what the the payment is on
S5: the HELOC. But the other thing that makes me nervous is, um,
S5: in speaking over this, because we talk a lot about
S5: planning for the future, um, I believe that HELOC goes
S5: variable in 2027.
S1: And so that's.
S5: That's the issue that really worries me. And that combined
S5: with maybe Covid, you know, I had friends that had
S5: rentals during Covid and in this state, like, um, Um,
S5: they would not allow you to evict anybody during that time. So, uh,
S5: I had many friends that almost went belly up because
S5: they had several houses where people were just living there
S5: and not paying, paying any of them the rent.
S3: Yeah. No, that makes sense. What about, uh, savings? What
S3: would you all have in the way of savings once
S3: you combine your finances?
S5: Um, probably about 90,000, 90 to 100,000 in savings.
S3: Okay. And then do you all have any retirement accounts
S3: started currently?
S5: Uh, she has, like, a pension. She works for the state.
S5: And then I have 401 K through through my job.
S3: Okay. And what percent of your income are you putting in?
S5: Uh, towards 401 K?
S1: Yeah.
S5: Uh, right now I'm putting in about 8%.
S3: Okay. And then are they matching on top of that?
S5: Yeah, they're well, they're matching dollar for dollar, up to six,
S5: which is pretty good.
S3: Are you getting a total of 14 going in with
S3: the employer match?
S5: Uh, I believe, I believe, yes, I believe that's correctly
S5: how it works. But they pay out the match like,
S5: every quarter.
S3: Yeah, yeah. Okay. No, that's great though. Well, you guys
S3: are doing great. I mean, you got a pension. I
S3: would say 10 to 15% going into the 401 K
S3: doesn't have to be monthly is the goal. Um, you know,
S3: that's awesome. So you're doing well there. You've got plenty
S3: of liquid savings. So that's a really strong financial position. Um,
S3: and you know, typically I would look for the rental
S3: income to cover two times all the costs, one and
S3: a half to two times, let's just say two times
S3: to keep it easy. Uh, so that'd be the mortgage
S3: plus the taxes, plus the maintenance. Um, so you're probably
S3: close to that, although you may not be fully there
S3: if you pull, you know, everything in. And that's assuming
S3: you have a renter, which, you know, depending on. I mean,
S3: that's an unknown. Uh, we can make an educated guess
S3: on that. But, you know, if we were to get
S3: into a recession, obviously I, you know, the the pandemic
S3: obviously is a once in 100 year event. I would
S3: think that's a pretty low risk in terms of there
S3: being a scenario like that where somebody who is not
S3: paying couldn't be evicted, um, you know, for reasons like
S3: you're describing. But I would put a lot of stock
S3: in just the, the rental income and the ratio of
S3: that to all of the expenses and then your ability
S3: to have plenty of reserves, which it sounds like you do. Um,
S3: what kind of equity do you have in that home
S3: if you were to sell it?
S5: Um, so I think just a little under 200 K
S5: is what's owed on it. But the last one that
S5: sold down the street, I think, sold for 467, uh,
S5: roughly same size, same layout.
S3: Yeah. And then what would you do with that money?
S5: Uh, probably pay off like, uh, credit cards? Um, Obviously
S5: the HELOC and then two vehicles.
S3: Got it okay. Yeah. And so I mean, you know,
S3: you could go either way on this. I mean, I
S3: certainly can appreciate what you're saying, especially with that added
S3: risk of that lock going variable. Um, when you put
S3: all the costs in the two mortgages plus the, uh,
S3: you know, the maintenance, the taxes and the insurance, you
S3: may not be quite there. You know how strong that
S3: housing market is in terms of its you know, how
S3: easy you could rent it, at least in this environment.
S3: Certainly it could turn down on us. And so we've
S3: got to factor that in. I think the next step,
S3: even though we may be able to make the numbers
S3: work on paper, is for you to evaluate. Number one,
S3: what are our values? And I think that this is
S3: perhaps the next conversation. You know, if money is a
S3: tool to accomplish God's purposes, we want to align our
S3: goals with our deeply held values as Christ followers and say,
S3: you know what? What do we want to be true
S3: about us in the future? And how can money be
S3: a tool to accomplish that? How important is it for
S3: us to be debt free? What do we want to
S3: be able to do with our giving? How much is
S3: enough and how much should we be saving? You know,
S3: for the future. Do we have any other goals? Um,
S3: you know, I think those are the kinds of things.
S3: And anytime debt is involved, I really think spousal unity
S3: is key. And that really may be the deal breaker
S3: here is that, you know, you guys are continuing to
S3: carry debt. And if you guys don't feel good about
S3: that as as a couple and it sounds like she's
S3: more comfortable with it than you are, I would say
S3: that might be a reason right there to say, you
S3: know what? Because we have the ability to be debt free.
S3: And that's just a real conviction for me. And I'm
S3: talking about you at this point. Then, you know, I
S3: think that might be the thing where you say, you know,
S3: I would like to have the option for us to
S3: go ahead and just pay everything off. I think the
S3: peace of mind that comes with that, our ability to
S3: free up a lot of cash flow, to perhaps even
S3: go into another property down the road. But to think
S3: in terms of what are our other priorities and values
S3: and how could we accomplish those with these and, and
S3: just reduce risk overall and not have an added part
S3: time job of being a landlord. You know, I think
S3: that's the conversation that you need to have. And I
S3: realize it's easier to say that to you because that's
S3: the direction you want to go. She's the one that
S3: you know needs to get on board with this. But
S3: I would approach the conversation that way. Start by making
S3: it a values conversation. Talk through what both of you
S3: want to approach this. Pray through it and see if
S3: you can't make a decision together. I hope that helps, RJ.
S3: God bless you and congratulations. We'll be right back. Great
S3: to have you with us today on Faith in finance. Live.
S3: Forgive my scratchy voice here. Today we're continuing to take
S3: your calls and questions. Let's go right back to the phones.
S3: To Florida. We go. Hi, Ruth. Thanks for calling. Go ahead.
S6: Oh, hi, Bob. God bless your program. First of all.
S3: Thank you very.
S6: Much. Um, second, uh, Thank you for being there even
S6: though you are not sounding that great. Thank you. That
S6: helped you to be there.
S3: I appreciate.
S6: It. I want to make this quick question. Um, um,
S6: I am trying to finish grilling next year. Finish paying
S6: my house. I told the lady I have a 20
S6: and change still balance. Now I know when I asked
S6: the machine to make a payment, sometimes the tape says, um,
S6: this is not the payoff amount. So I don't know
S6: what that means. I thought that my balance is what
S6: I hear and what it is right now, but seems
S6: like it's different. But the question I'm calling is because
S6: I heard people houses are being stolen with them in it.
S6: In other words, they've been sold and they don't even
S6: know it. So I was thinking, if I get one
S6: of these honor titles insurance, Students. Would that protect me
S6: from something like this to happen? And who? What lawyers
S6: do I go to do this with?
S3: Yeah. Yeah. Very good. Um, let me address the first
S3: part first. And that is your mortgage balance is the
S3: principal you owe the payoff amount. Is that plus accrued
S3: interest fees and any escrow adjustments, it could run from
S3: 2 to 100 to a dollars to $1,000. So you
S3: are going to want to get a payoff statement from
S3: your lender to see the exact difference. Uh, you know,
S3: to make that payoff, which, you know, may be a
S3: little bit different than the number you're seeing on your statement.
S3: So that's perhaps the the difference there in terms of
S3: what you're talking about here. Uh, you're talking about basically
S3: where somebody would commit, commit a fraudulent transfer, um, of your,
S3: of your deed. It's an unauthorized and a fraudulent transfer
S3: that would, you know, essentially cause them to be able
S3: to take out a loan against your property. But at
S3: the end of the day, it's fraud. And what you're
S3: talking about is not necessarily what's considered title insurance. You see,
S3: title insurance is a one time policy you buy when
S3: purchasing the home to protect against title issues. And it's
S3: for the benefit, you know, of that particular the lender
S3: is going to require it, and it just makes sure
S3: that you have a clear title that's paid for at closing.
S3: It's one and done. What you're talking about is what's
S3: often called title lock insurance or a title lock. And
S3: it's not actually insurance at all. It's basically a monitoring
S3: service that monitors your home's deed. And there's no heightened, um,
S3: you know, risk of this happening. Um, you know, when
S3: you pay off the loan versus when you have a mortgage,
S3: it can happen in both cases. I guess it's more
S3: common when the homes free and clear, because they can
S3: easily then add a second or adding a new mortgage
S3: and that's typically what they're after. But the the title
S3: lock is somewhat of a misnomer because essentially, uh, you know,
S3: there's no financial protection necessarily. Um, you know, for you,
S3: it provides limited value because it notifies you essentially after
S3: the fraud occurs. And it's unnecessary because, um, you know,
S3: you can essentially contact your county records office and often
S3: they will allow you to place an alert on your
S3: file so that if there were any changes to your title,
S3: that you would be alerted anyway. And that's typically free. Um,
S3: so I just think it's an unnecessary expense. Now, if
S3: you have surplus, and it would give you peace of
S3: mind to know that you have this additional monitoring 24
S3: over seven where they can notify you of a deed
S3: filing or a lead, uh, a lien on your property
S3: and potentially catch that fraud early. Then you know, that's
S3: no problem. But it's not going to prevent it. It's
S3: just going to alert you that it happened so that
S3: you can begin to take steps to rectify the situation.
S3: Does that make sense?
S6: Yes. But then I have already been. Something is called
S6: alert for I live in a retirement section, but. So
S6: you understand. Yes. This is appraisal department and has a
S6: letter while back telling us to just go register for
S6: this alert service. So if anything goes into the appraisal
S6: department then they will let us know. But that doesn't
S6: stop them from doing the selling of my house. So
S6: that's what I was wondering. What else can I do?
S6: I mean, if they don't stop it, how can even you?
S6: How can you even still the house? It's just breaks.
S3: My. Well, it would be. It's a very low it's
S3: a very low risk and it's fraud. And typically what
S3: happens is if this were to happen, they would essentially
S3: fraudulently transfer your deed, which again isn't easy to do,
S3: but it does happen. And then typically they wouldn't try
S3: to sell it because you would know if somebody's, you know,
S3: trying to buy your home. Essentially what they would do is,
S3: is take out a loan against it. And then when
S3: they we didn't pay it, then you would be notified
S3: by the lender, you know, that, uh, maybe with a
S3: certified letter that they're going to foreclose. Well, at that
S3: point you would be able to say this was fraudulent conveyance. This,
S3: you know, this is my home. I can I have
S3: title to it. My deed was transferred fraudulently. And at
S3: that point no insurance is going to help you. You
S3: would just have to, you know, go through the court
S3: process to prove that it's your property. And and it
S3: would be unwound. Um, so again, this is very low risk. Uh,
S3: essentially you've already got the alert on it, and that's
S3: about the best thing you can do at this point.
S6: And and I do have a living trust, too. So
S6: because I noticed I've been going into the real trust
S6: list because I heard someone found his lot for sale
S6: not knowing. And so now every other month, I go
S6: check in and see if my house is for sale
S6: in there. And it is. It is there and it is.
S6: It says how much I pay. In fact, when I
S6: got it, I mean, but it doesn't say it's for sale, so.
S3: I'm.
S6: Just checking. I mean, I just yeah.
S3: I wouldn't worry about that. Ruth. Yeah. Don't don't lose
S3: sleep over that. I wouldn't it's not something you need
S3: to check regularly. It's going to be in Zillow and
S3: on these other sites because it's a part of the
S3: public record. All that information is available as to through
S3: the through the public record of what you paid for
S3: it and what the assessed value is. And, and each
S3: time it was bought or sold that would be listed there.
S3: That's just going to be available for every home. Um,
S3: and I wouldn't worry too much about somebody trying to
S3: sell it from under you. So it sounds like you've
S3: taken the steps you need to take. And I think
S3: at this point, you need to let it go. And
S3: and obviously, if they alert you at any point that
S3: somebody's trying to, you know, steal the deed to your home, well,
S3: then you could take action. But again, that is a very,
S3: very low risk. We appreciate your call today. I hope
S3: that helps you. Thanks for being on the program. Let's
S3: go to Indiana. Hi, David. Go ahead.
S7: Yeah. Hi, Rob. Thanks for taking my call. The question
S7: I had was investing within a workplace. HSA. Do you
S7: have any advice on that? I have, um, half the
S7: money is in cash, and then half of it is
S7: in a 2030 fund. And I was wondering if there
S7: are some other options in there. And I was wondering
S7: if maybe the just the basics would apply to HSA also.
S3: Oh, you're talking about sound mind investing. Yeah, yeah. No,
S3: it absolutely could I would say you'd want to keep
S3: 1 to 2 years of expected medical expenses in the,
S3: the cash or the savings options, uh, to cover deductibles
S3: or emergencies and then treat the rest for growth. And
S3: I would approach that just like I'd approach an IRA
S3: because it's really long term investment money that's going to
S3: go alongside your retirement assets. So I'd approach that with
S3: the same diversification. Uh, and the just the basics a
S3: low cost ETF strategy would be a great option for that.
S3: Hang on the line. We'll finish off the air. We'll
S3: be right back on Faith in finance Live. Thanks for
S3: joining us today on Faith and Finance Live I'm Rob West.
S3: Let's head right back to the phones. Miami Florida is
S3: where we're headed next. Hi, Johnny. Go ahead.
S8: Yeah Yes. Good afternoon. Ron. Thank you for taking my call. Um.
S8: I'm in. I wanted to know. I have a taxable
S8: money market account, and I could move it to a
S8: non-taxable money market account, which, uh. What? I would like
S8: to know if the non-taxable money market account, the annual
S8: percentage rate. How low? Uh, can it be? What's the difference?
S8: It can be. So where I could break even, considering
S8: that being non-taxable, I wouldn't be paying taxes on the interest.
S3: Yeah. I mean, the simple approach to that, Johnny. And
S3: it's a great question. I like the way you're thinking.
S3: The simple approach would just be to look at, um,
S3: when the yield beats your taxable accounts after tax return,
S3: then you might want to switch to a non-taxable money market.
S3: So if your taxable account earns 5%, you need a
S3: non-taxable April of at least. Well, in the 24% bracket,
S3: let me just. Yeah. So you would need a non
S3: taxable Apr of at least 3.8% with no state tax
S3: to break even or earn even more. And then you
S3: could look at maybe a muni fund yield like Vanguard
S3: or one of the others. Um, you know, that uh,
S3: could be a comparable option, but that would be the
S3: way I would calculate that. Does that make sense?
S8: Yeah. So roughly, uh, one and a half percentage point.
S3: Yeah. Based on the 24% bracket, I would say 1.5%
S3: would be about right. Uh, yes. It may be a
S3: little less than that. Maybe one and a quarter.
S8: Okay. Well, thank you very much. And, uh, I hope you, uh,
S8: get well soon. Thank you.
S3: Thank you. Johnny, I appreciate that. Uh, let's go to Indiana. Hi, Renee.
S3: How can I help?
S9: Hi, Rob. My name is Renee. I'm calling. Um, first
S9: of all, just thank you for taking my call. My
S9: husband and I are approaching a situation where we could
S9: definitely use. He was in a car accident last year.
S9: I truly thank God that he didn't, you know, have
S9: any real injuries from it, but, um, a car was totaled,
S9: and we're just now hearing back from lawyers, and he's
S9: going to get a $20,000 settlement from it. But we're
S9: trying to decide, like, what to do with it. We
S9: have about 100 K in debts, which includes student loans,
S9: one car payment, mortgages, credit card debts, and, you know,
S9: different things like that. We, um, we mortgaged our home.
S9: We owe about $6,000 on that. And we took out
S9: a HELOC loan to do some repairs one year, which
S9: is about 25,000 or so. And, um, we're just trying
S9: to get the best advice because I want to sell
S9: a home, but we stay in now so that we
S9: can dissolve whatever debts that we have left with the
S9: equity from the home after we use the 20 K,
S9: but I'm not sure if that's a good idea. And
S9: that's why I'm calling in today to try to get
S9: your advice on what we should do.
S3: Yeah. Very good. What do you own? The student loan.
S9: My student loans. His was dissolved because he's a public
S9: service employee. Um, but I owe about 35 K.
S3: Okay. And then you have a car loan. What is that?
S9: Um, I owe about 25 K on the car.
S3: All right. What is the interest rate?
S9: The interest rate is about 8%.
S3: Okay. And then how much on credit cards?
S9: Total credit cards is about Mhm. 60 K.
S3: Okay. Wow. Yeah. And so that's obviously up 20% plus
S3: I would imagine. Huh.
S9: Mhm.
S3: Okay. And then do you all have any savings apart
S3: from this settlement you're going to receive.
S9: Right now we have about 3000 in savings.
S3: Okay. And do you have any surplus or are you
S3: just spending every dollar every month just to service the
S3: debt and pay your expenses?
S7: Yes.
S9: No surplus. We actually. Negative.
S7: Yeah.
S9: Surplus.
S3: Okay. All right. And so what options are you considering
S3: at this point?
S9: Considering possibly to sell our current home and pull the
S9: equity to dissolve any other debts at the 20 K?
S9: Don't cover, like, as far as the credit cards, um,
S9: it's concerned, at least try to get the credit card
S9: debt down. Um, and that's really the only thing we explore,
S9: and maybe even just cutting back on unnecessary things. But
S9: it's just worth paying so much out a month towards
S9: these cards.
S3: Yeah. No, I get it. And just what is that house.
S9: Worth spending right now? The house is worth about 220,000
S9: and we owe 65 on it.
S3: Plus the 25.
S9: Mhm.
S3: Yeah. So you, you have 90,000 between the two loans.
S3: So you'd net 130. And then where would you live.
S3: Would you go rent something.
S9: Well we were thinking about just possibly buying another home
S9: somewhere else in Indiana.
S3: Yeah. The challenge is I mean, in this housing market, uh,
S3: I mean, you could, you know, you'd get obviously probably
S3: a good amount coming out of your existing home. Uh,
S3: you'd have 130,000 in equity. But if you go into
S3: this next home, I mean, what would have you have
S3: you looked around to see if you downsize size, what
S3: you could find that would be reasonable in a location
S3: that's safe, that that meets your needs, that's more modest.
S3: Do you have any idea what that might cost? Have
S3: you have you done any legwork on that?
S9: I've done some legwork, and it's about, you know, those
S9: homes are still going for about 300,000. Like, even.
S3: Yeah.
S9: You know.
S3: So that doesn't.
S9: Help.
S3: Yeah. So that that's actually going to make things worse
S3: because now you have all the expenses of selling it
S3: because you got the realtor fee and, and all the
S3: transaction costs, and then you got the fees to go
S3: in and buy it, and then now you're buying something bigger.
S3: And so now we're in a, in even a more
S3: difficult situation, and perhaps even with a higher interest rate
S3: on that first mortgage. So I don't think that's the option.
S3: I think at this point, you know, we've just got
S3: to really start to look at that budget and just say,
S3: what can we do to get on a track to
S3: dial back spending if it's possible? And I don't, you know,
S3: I haven't seen all the numbers, so I have no idea. But,
S3: you know, we'd probably want to put those. I mean,
S3: your options are number one, sell the the property and
S3: rent and basically start over, wipe out all the debt. And,
S3: you know, you'd have after you paid off the all
S3: of the debt because it looks like you have about
S3: 120,000 in debt after the realtor fees. I mean, you're
S3: you're basically, you know, you may not even be able
S3: to pay off fully the student loans, the car and
S3: the credit cards. Um, you know, because after expenses on
S3: the 220,000, uh, if that's your selling price, you're not
S3: going to, you know, necessarily net 220. Uh, but let's
S3: say you could pay everything off. Now you've you're completely
S3: debt free, but all you have to your name is
S3: 3000 in savings. So you're starting over. Um, and, you know,
S3: at that point, you'd have to make your budget work
S3: based on that. And if you don't have the disciplines that,
S3: you know, perhaps led to the the debt in the
S3: first place, the credit cards in particular, then there's no
S3: reason to believe we're not going to be back in
S3: that situation. Uh, you know, a year from now with
S3: a bunch of credit card debt, except now you don't
S3: have a home and, you know you're in a worse situation.
S3: So I think the first step before you do anything,
S3: including selling the home, is to get you with one
S3: of our certified financial counselors, if you'd be willing to
S3: work with them and they'll give you a, you know,
S3: a few sessions over the phone we'll pay for, it
S3: won't cost you anything, but essentially, they'd help you work
S3: through your budget and a spending plan and see if
S3: you guys can get to a place where you can
S3: cut back, you know, show, demonstrate that you're willing to
S3: live within your means, free up some margin on a
S3: monthly basis. And if you can, then I think at
S3: that point we could look at, okay, maybe we slide
S3: all these credit cards into a debt management program with
S3: our friends at Christian Credit Counselors, which would get the
S3: interest rates down, which would put, you know, have a
S3: lot more of the monthly payment going to principal reduction.
S3: And even though it's going to be a slow process,
S3: at least now you're working towards something that is going
S3: to preserve the home, meaning you're still going to have
S3: the home to show for this at the end of it,
S3: and you're on a track to actually paying off the
S3: credit cards, which would be, you know, the next priority
S3: or the first priority all the while, you know, paying
S3: the minimums on the student loans and the car. But
S3: I think the biggest issue is you're developing those habits
S3: that's going to serve you well in the future, so
S3: that once you get out from the credit card debt,
S3: we never go back there again. And you guys are
S3: on a different trajectory at this point. Does that make sense?
S9: Yeah, that makes sense. And that's my that's been our prayer.
S9: Like I don't know if you could pray for me now,
S9: but the prayer is to have more discipline when it
S9: comes to spending and not living beyond our means.
S3: Yeah. That's right. And listen, it's easier said than done.
S3: I get it, Renee. And and there's no judgment here.
S3: We all struggle, you know, with this in different ways.
S3: But I think it starts with you understanding God owns
S3: it all. And you're a steward and I'm a steward,
S3: and we're to be held to account to the Lord
S3: for how we manage his money. And that means we
S3: gotta live within his provision, even though the world will
S3: allow us to live outside of it with debt. We've
S3: got to reject that. We've got to be willing to
S3: to live within his his means. And, you know, that's
S3: a commitment that you have to make. And you and
S3: your husband need to be on the same page about that.
S3: If I covered the cost of a few sessions with
S3: one of our certified Christian financial counselors, would you do it?
S9: Yes I would.
S3: Okay. All right, let's do that. That's going to be
S3: our gift to you, and we'll get somebody in touch
S3: with you. They'll schedule some meetings with you over the
S3: phone or a zoom connection, and begin to work through
S3: that budget and develop a game plan with you. They'll
S3: pray for you, they'll encourage you, they'll walk alongside you,
S3: and hopefully we can get you guys on a track
S3: to financial health. Okay.
S9: It sounds good. Thank you so much.
S3: All right. Let me pray for you. Father, we just
S3: ask that you give Renee strength, that you'd help her
S3: to understand her role as a steward and helped to
S3: have her acknowledge you as owner of everything. Lord, you
S3: are our ultimate treasure, not the things of this world.
S3: The things that money can buy are fleeting, but money
S3: is a good gift. It's to be used as a
S3: tool to glorify you. For us to enjoy and to
S3: provide and to give. And I know that's her heart's desire.
S3: That's what she wants. I pray that you'd give she
S3: and her husband unity in this, that you'd give them
S3: a clarity around what it is they're driving toward, and
S3: that is to be found faithful. And that through this
S3: certified Christian financial counselor, they'd be able to get on
S3: a track that is completely different than the one today
S3: that they can have confidence is God honoring, and that
S3: you would work in their lives and you'd draw them
S3: closer to you in the process. We ask all this
S3: in Jesus name. Thanks for your call. Faith and finance
S3: is a partnership between Moody Radio and Faith five. Big
S3: thanks to my team today. Amazing folks Amy, Jim, Dan
S3: and Lisa. We'll see you tomorrow. Bye bye.