COVID Financial Struggles

Jeremiah 29, 11 reads for I know the plans I have for you declares the Lord plans to prosper you and not to harm you. Plans to give you hope and a future. Good to know as the pandemic drags on.

The economy is improving but millions are still unemployed or losing work hours over time and bonuses. Post Rob West talks with Neely Simon of Christian Credit Counselors about a plan to relieve some of the stress. And it's your calls on anything at 800-525-7000.

800-525-7000. I'm Steve Moore, overcoming COVID financial struggles. That's next right here on MoneyWise Live.

Many Americans continue to face with this pandemic. Well, that's exactly right, Steve. She's right there in the trenches along with the Christian Credit Counseling team. And Neely, we're thrilled to have you back on the program. Thank you so much for having me on the show.

It's a privilege to be here. You know, speaking of the front lines, why don't you give us an update? What are you hearing from folks calling into Christian Credit Counselors these days? Yeah, this pandemic, I think, has impacted all of us. We're experiencing more expenses with the changes that are going on. Now with more people working from home, kids being at home as well, taking online classes. You have some parents who are having to cut back their hours, which means a loss of income because they really need to focus and help their children through this transition. You also see higher grocery bills going on.

You're eating more because you're at home. The utility bills are going up. We've also seen that the federal unemployment was cut in half.

And for some people or some states eliminated altogether. Or maybe you have credit cards that were on promotions and those promotions are expiring. And so the payments are more than doubling. So what's happening is a lot of people are experiencing a loss of income, higher expenses or a change in their budget. And they haven't really accounted for it. But they're feeling it in their pocketbook or in their bank account. And with things the way they are, there's a lot of uncertainty. So we really need to be focused and come up with a plan to prevent it from being a crisis.

Well, that's exactly right. Neely, for folks listening to the program today and resonating with what you're describing, perhaps seeing themselves in some of these scenarios you're outlining, how can you help these folks find peace in the midst of these trials? I think the most important thing is to be open, honest and transparent with people, right? A lot of times it's difficult when you are struggling with your finances or maybe you have overspent, right? So it's humbling to say, can I need some help?

Or maybe there's a little shame in that, okay, I wasn't a good steward with my resources. But the important thing is that we're all human, right? And we're here together to support one another as like-minded Christians and find ways to get out from underneath the stress and the strain that debt can bring on. So I would say reach out to your support system, you know, to MoneyWise who has trusted resources. Continue to go to church. I know a lot of churches aren't meeting in person, but you can certainly attend online and have conversations with your friends, with your family, even with your kids about what's going on. And so that you're all working towards a common goal to get out of debt or to stay out of debt and really work within the means that you have. Well, I think also seeking out a godly counselor can be key in terms of helping you make some progress in the right direction. But with your values in mind, why do you think it's so important to have a counselor who shares your values and is also trained in biblical finances? Yeah, I believe that at Christian Credit Counselors, we feel it's very important to be working with a Christian counselor because we're like-minded.

We have the same foundation. We want to share biblical principles around your finances. I think often a lot of us get caught up in the worldly views of wanting to look good, drive the nice car, have the nice house, or even just providing our children with what they need and want. And a lot of times we're not able to afford that. So what do we do? We put it on credit or we put it on credit cards and then later find that we're overextended. And then we don't have that peace in our lives.

That's exactly right. Well, when we come back just around the corner here, we're going to talk about what you can do. What are some practical steps you can take? And what about a debt management program? Is that the right solution? That and much more as we return. This is MoneyWise Live. He's Rob West. I'm Steve Moore, taking your calls later at 800-525-7000.

We'll be right back. In Splitting Heirs, giving your money and things to your children without ruining their lives, Ron Blue explains why it's important to make these decisions now, instead of forcing your heirs to do it later. Splitting Heirs will foster a real appreciation for the precious resources that God has entrusted to you. And it's available when you click the store button at MoneyWiseLive.org. If you have money in a retirement account or just a general investing account, you know the stock market can sometimes be like a roller coaster. But it is possible to enjoy both profit and peace of mind in investing, no matter what's happening in the market. You can see a short video webinar on that topic at SoundMindInvesting.org.

Since 1990, SoundMind Investing has sought to offer financial wisdom for living well. SoundMindInvesting.org Politics, it can be a grubby game. People scoring points off one another just to be on top of the heap, to be in control. Now, they're not all like that, but sometimes people want to win, no matter what the cost.

Just as well, you and I aren't like that. Yeah, right. Jesus was listening to some men arguing about which one of them was the greatest.

Obviously this is not a new problem. And he said, look, the greatest among you will be the servant of all. Now that sounds a bit screwy until you ask yourself, who's the most influential person in my life? Is it someone who loved me when I was hard to love? Who cared for me when nobody else would? Who covered for me? Who made me look good?

Who spoke up for me when I wasn't there to defend myself? Maybe Jesus has a point. Maybe greatness isn't so much about winning. Maybe our greatness is something that grows quietly and surely in the hearts of the people around us.

I'm Bernie Dunn. Do you feel like your hands are tied with debt, preventing you from serving God? If you have credit card debt, Christian credit counselors can help. Through our debt management program, we can get you out of credit card debt about 80 percent faster while honoring your debt in full. For more information on how Christian credit counselors can help, visit Christian credit counselors dot org. That's Christian credit counselors dot org or call 800-557-1985, 800-557-1985.

Great to have you with us today. I'm MoneyWise Live. We're talking with Nealey Simon, director of strategic partnerships at Christian credit counselors, as we consider, review, talk about the COVID financial struggles that lots of people are facing and how the good folks at Christian credit counselors can help you with that.

Rob? Nealey, just before the break, we were talking about those who find themselves in a situation where they're overextended, perhaps because of the pandemic or maybe just living a lifestyle beyond their means. Maybe they've gotten caught up in the comparison trap. You know, whatever it is, there's a spiritual side and spiritual implications to being overextended.

Talk to us about what you've seen there. Yeah, so the overextension really becomes bondage that is hard to break. And what's important to understand is the credit card companies are designed to keep people in that cycle of making payments with very little progress because it's where they make their money. So we at Christian credit counselors really teach people to spend less than they make, work on creating saving buckets in different areas of their lives so that they're not just going out and buying whatever it is that they want, but they're showing some discipline, saving up for it, and then buying it when they can afford it and being a good steward with their resources. Not only that, but when you practice those principles, you really begin to experience peace and are able to live more generously. And it feels good. It builds your self-esteem as well.

Well, that's so true, Neely. All right, let's talk about the practical side of where we go from here. If somebody listening today is saying, I know I'm in trouble, what are some of their next steps? As we talked about earlier, expenses have changed for all of us. So it's, I think, really key for everybody to get on a budget, whether if you don't have a budget, create one, or make some edits to the one that you currently have based on the changes.

I would say evaluate what your needs and what your wants are. During this time, if your income has shifted, it's very important that you're intentional about your spending so that you're not overspending and then, again, relying on the credit cards. I always encourage people, too, to have these financial conversations with their family, not only their spouses, but with their children, too, once the parents have discussed and kind of understand what needs to be done. Bring the kids involved so that everybody is participating and collaborating in terms of working towards the common goal that the family wants to have around finances. And be bold and open about your financial situation and lean on resources like Christian credit counselors, like MoneyWise, like their budget coaches, and really seek out the resources that you need in order to keep you on track and keep you encouraged. Also, contact your lenders.

Some lenders are still providing some grace periods, so find out what your options are so that you can make a good, educated decision around them. Nealey, those are interesting bullet points you just went through. You know, so many husbands and wives themselves have trouble talking about these things, but sharing these things with their children, I can imagine some people might push back on that, thinking they don't want to burden the kids, thinking that maybe this is something children don't need to know about at all. Any thoughts in that regard? Well, I think you don't have to have full disclosure with the children, but if you're trying to cut back in terms of eating out, right, and you're going to be at home, maybe do meal planning, get the kids involved with cooking, right, and say that we're working on just being more intentional with our spending and saving more, and so finding ways just to have them participate, maybe not know all the financial numbers specifically, but just have them be a part of what the goals are for the family in terms of cutting back on costs and expenses.

I love the idea of getting the kids involved and working together because we're teaching biblical principles of managing money at the same time that they can carry on into their adult lives. All right, Nealey, what about a debt management program? How can you tell if that's the right solution for you? Some of the indicators I would say, if some of you are staying up late and you're worrying about your finances and your debt, if your relationships are suffering or you feel distracted at work, maybe even having feelings of hopelessness, right, or maybe you're doubting God's provisions and it's preventing you from being as generous as you'd like to be.

I think those are some really good indicators that it's time to just reach out and have a conversation and figure out what your options are and if you can get some help. If this is a new concept for some folks, this idea of using a debt management program like the one offered by Christian credit counselors, can you give us just a quick overview of how it works? Sure. So the way Christian credit counselors can benefit you is that we have relationships already in place with the creditors where we have pre-negotiated interest rates, terms, and conditions. So through our program and service, we're able to lower your payments and your interest rates, and then we consolidate all of the debt into one monthly payment and we snowball the debt. So what that looks like for you is that throughout the program, you're going to continue to make monthly payments to each and every creditor on the plan. Those payments will just be made through us with the lower terms, and then once an account gets paid off, that payment is then applied towards another account to help people pay off the debt faster. So through this process of lowering the APRs and snowballing the debt, we're able to get you out of debt about 80 percent faster versus if you were just making minimum monthly payments. Now, on the program, you are honoring your debt in full.

We are not a settlement company and we're not providing a consolidation loan. The way our program works is we set you up on a monthly draft from your checking account, we pull the funds, and then we electronically disperse payment to the creditors seven days later. So the next steps would be to figure out how we could help you. So what we offer is a free consultation, which will consist of working you up a comparison estimate outlining what you're paying now versus what you could be spending with us.

So it will have the new APRs, the cost savings, interest savings, estimated time to repay, and also what our monthly service fee is. And then part of the free consultation will also be working to create a budget with you. Once we do those two things, we send you all the information so that you can think about it, pray about it, share the program with your spouse, and make a good decision. So our goal is really just to educate you and expose you to the resources and allow you to make a decision.

I love that it's trusted, godly counselors, people who know the counsel of Scripture and are going to be on that journey with you. So no reason not to see whether this is the right solution for you. Nealey, in terms of looking at where we go from here, you talked about confronting the issues. You know, so often we find ourselves in this position where the bills are mounting, we don't know how they're going to be paid, the credit card debt seems to be rising, not falling. We tend to just run away from it, perhaps not even open envelopes anymore. Why is it so important to confront these issues head on?

Yeah, that's a great point because a lot of times people are fearful or they're scared or they don't have the resources to get into action because they don't have the money to pay the bills. So what's really important to understand is that it's not going to go away, and it's only going to get worse if you just ignore it or stick your head in the sand. I think it's really powerful for you to be able to tackle your problems head on, lean on trusted resources, and get into the solution in God's Word. I love it. Nealey, always great to have you with us. Thanks for stopping by.

Thank you so much. God bless. And to check them out, it's ChristianCreditCounselors.org or toll-free 800-557-1985. Nealey Simon from Christian Credit Counselors, always a joy and a blessing. We'll be back with more. Your phone calls too, 800-525-7000. I'm Steve Moore.

We'll be right back after this. Never enough? Three keys to financial contentment.

Available when you click the store button at MoneyWiseLive.org. Hebrews 4-12 says, for the Word of God is quick and powerful and sharper than any two-edged sword. Here's Beth Moore with a quick word. When you receive Christ as your personal Savior, at that point, we become new creatures. That's what we're told in the Word of God, 2 Corinthians 5-17. There are new creations in Christ, but we will still feel like the old person as long as we think like the old person. As a man thinketh in his heart, so is he, the Gospel of Luke says.

That's just the way it is. So however we feel about life, about our relationships right now, about the things that we're going through, everything we feel right now is a direct result of what we think. This is something else we just keep coming back to over again, going, how many times do I have to be reminded of this? I have a situation that anybody besides me, and so I feel negative about it. So I'm trying to change the way I feel. I'm not going to change the way I feel. I've got to change the way I think, and that will change the way I feel.

I want to think the same thing about it and feel something new. We're not going to move on to that new place. God is going to force us into this.

This one is so important. God's going to push this envelope and push this envelope and push this envelope until we win this battle. He's going to do it over and over again because you and I are trying to get someplace new. But as long as we're thinking the old way, we ain't getting no new place. You've been listening to A Quick Word with Beth Moore. We have two ways to experience, now that faith has come, a study of Galatians. The online experience is now available at BethMoore.org.

The workbook edition will release in January 2021. Either way, Beth would love to have you in Bible study. Would you like your life to be infused with joy? Would you like to interject an eternal dimension into even the most ordinary day? Author Randy Alcorn says you can when you discover the Treasure Principle. In a concise, power-packed style, this newly revised and updated book offers a six-step plan to finding the immediate pleasure and eternal rewards of the Treasure Principle.

And once you discover it, life will never look the same. The Treasure Principle is available when you click the Store button at MoneyWiseLive.org. Great to have you with us today.

It's MoneyWise Live with your host, Rob West. This is a place, we think, where God's direction for your money, your life, your marriage, and your career all meet together with your phone calls. So here's the number, 800-525-7000. We have one, two, three, four, five. We have almost five phone lines available for you. So five lines, no waiting, call right now, 800-525-7000.

Anything financial is fair game. Chicago, Illinois, Susan, thanks for calling in today. What's on your mind? Well, thank you for taking my call. I enjoy your program and I listen to you almost every day.

But I have a question. My husband and I, my husband is 11 years older than me, so he's 77 and I'm 66. My husband is retired.

I am still working and, to be honest with you, I enjoy my job, so I really don't plan on retiring. But we have an income property in California and it's a small townhouse. And what I've done over the years, we've owned it for approximately 10 years, is I've rented to my brother.

Now my brother is planning to move from California closer to his family in Texas. So my husband and I are contemplating selling this property. My question is, I really am not interested at this point in reinvesting, but I don't know what to anticipate if we sell this property at this time. When you say you don't know what to anticipate, Susan, do you mean in the way of proceeds, or you don't know what to anticipate in terms of how you could convert that into something that generates a return?

Well, I'm not really so interested in – well, I'm always interested in returns. So let me just – what I am concerned about is really the capital gains on the property and my paying the taxes on the property. So my question is, when you sell a property like this, how do the taxes work?

Sure. So it would be a long-term capital gain that you would have for real estate. And the rates vary anywhere between 0 and 20 percent depending upon your income. So you would just have to understand what is the true gain on the property, which is basically the selling price minus your original cost basis, plus certain improvements and expenses related to selling it. You're going to generate a gain on that. If you've owned it for more than a year, it's a long-term gain.

And depending upon your income, it would be 20 percent or less, probably at that 15 or 20 percent mark. So the key would just be to make sure that you set that aside. The only way to avoid that would be to either give the property away before you sell it, so you could move it into a donor-advised fund and get the full value of it that you could then give away to ministry and charity. The second option would be what's called a 1031 exchange, which is where you roll the proceeds within a certain window of time into a like property that is also an investment property. And then essentially you defer the capital gains by pushing it forward. But if you do want to go ahead and realize the value of it, because either A, you don't want to get into the business of being an out-of-state landlord with somebody who's not a relative, or now you're marketing it and you're having to keep up with the maintenance, and are they taking care of it, and what if they move out in the middle of the night, and then what? Then I would say, yeah, go ahead and sell it.

Just recognize that you've got to pay some tax on it, so you set that aside so it doesn't catch you by surprise. And then it's a matter of saying, how do we want to repurpose these assets in light of our goals and our values? Meaning, let's look at our priority here, whether it's giving or paying down debt or just saving for the future. And if it's long-term savings, how do we want to redeploy this and income generating or to seek a return?

Probably through a stock and bond portfolio, which would be much more passive and certainly more liquid. But I'm throwing a lot at you here, Susan. Does all that make sense? Yes. Yes, it does.

I do have a question. Say I fall in the tax bracket of the 20 percent. That's what's going to be my tax on my capital gains. Can you amortize that over years, or do you have to take it for the year that you sell the property? Yeah, you would go ahead and pay that in the year that the property is sold.

So that would be part of one of the schedules on your tax return if you sold it this year for your 2020 tax return that you would file prior to the filing deadline next year. So I think at this point, you know, I like the idea, again, because of the transition here. You're an out of state landlord, so to speak, you know, realizing the proceeds of this property and then redirecting those after some prayerful consideration and review of your goals and priorities. And if you need an investment professional to help you, we've got plenty of certified kingdom advisors there in Chicago.

I'd interview two or three of them to find one that's a good fit for you, who could really deploy these assets in an investment strategy that makes sense with your goals and objectives, you and your husband together, of course, and can really take an active role in managing this for you. But if you have other questions along the way, Susan, don't hesitate to call. And thanks for being a faithful listener. Yeah, thank you very much, Susan. We wish you and your husband the very best. Rob, how about an email or maybe even two?

The first one we have is from Bart in Newport Beach, California. He says, How do I improve my credit score? Do I need to pay someone? Yeah, you know, you will find plenty of folks that tell you that they can charge you a fee and improve your credit score, but I wouldn't ever do that. There's really nothing that you can't do yourself. And frankly, there's some fraud and some scams out there involving credit score improvement. So here's what you want to focus on. Bottom line is you being an on time payer every month and managing your credit responsibly is the key. So 35 percent of your credit score is made up by your repayment history.

And then it goes down from there. Another big factor is what's called credit utilization. You want to try to keep those balances below 30 percent of the available credit that's been extended to you. Beyond that, you want to look at the types of credit that you have, the number of inquiries you have. Bottom line is if you follow biblical principles of managing money wisely, keeping your debt under control or paid off and paying on a timely basis, that score, even with some derogatory history, meaning a bankruptcy in the past or a charge off or a late payment, as those get older and older, Bart, they will become less significant as it relates to your score.

The newest information always impacts you the most. So just pay everything on time. Okay. And if you have an e-mail question, a short question you'd like to ask Rob by way of e-mail, the address is questions at MoneyWise.org, questions at MoneyWise.org. You're listening to MoneyWise Live. He's Rob West. I'm Steve Moore.

You're you. We'll be back with more 800-525-7000 after this. How should we as Christians think about investing? What if we could invest our money in a way that aligns with what we believe? At Eventide, we believe it is possible to love God and love our neighbor in the very practice of investing. We design investments for performance and a better world so you can invest for the future with a sense of wholeness and purpose. We call this investing that makes the world rejoice.

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Interested? Learn more by calling 800-791-6225 or online at chministries.org. Hi there. My name is Anna, a biblical studies major at the Moody Bible Institute. The Moody Radio Verse of the Week on this Pastoral Care Week is found in Hebrews 13 verses 7 through 8. Remember your leaders, those who spoke to you the word of God.

Consider the outcome of their way of life and imitate their faith. Jesus Christ is the same yesterday and today and forever. That's Hebrews 13, 7 through 8, the Moody Radio Verse of the Week.

Go to MyMoodyRadio.org. God cares a great deal more about our money than most of us imagine. In fact, Jesus says more about our use of money and possessions than about anything else, including both heaven and hell. In managing God's money, author Randy Alcorn breaks it all down in a simple, easy to follow format that makes it the perfect reference tool if you're interested in gaining a solid biblical understanding of money, possessions, and eternity.

Managing God's money is available when you click the link. With SRN News, I'm John Scott. The Senate is set to confirm Amy Coney Barrett to the Supreme Court.

Barrett would be the President's third Supreme Court Justice. A fast-moving wildfire has forced evacuations for 60,000 people in Southern California. As powerful winds across the state prompted power to be cut to hundreds of thousands to prevent utility equipment from sparking new blazes. The Smoky Fire in Orange County broke out just before 7 a.m. local time and quickly threatened neighborhoods in Irvine. It's not clear what started that fire. Sales of new homes fell by three and a half percent in September.

The Commerce Department says despite the modest decrease, sales of new homes are up 32.1 percent from a year earlier. Sharp losses on Wall Street, the Dow off 650 points, the Nasdaq down 189, and the S&P fell 64. This is SRN News. Thinking about life. Back to our phone lines. We have lots of nice people waiting, so let's say hi to Anita Robb. She's calling from Independence, Missouri. Well, Anita, thank you for calling today. How can we help you? Hello, thank you for taking my call.

I really appreciate it. I am in the process of refinancing my home with a $30,000 cash out. I'm waiting on the final closing this week. And so my question is, I have about $20,000, $21,000 in credit card debt, and what I had planned on doing was paying off about $10,000 of that and then utilizing the rest to make improvements to the home.

What do you think? Well, a couple of things. One, it sounds like you're very close to closing, so the mortgage is already kind of right near the finish line, so I'm not going to suggest we do anything different there, although if you're extending the term, I have a slight concern about that and would want to encourage you to perhaps pay more than just the minimum payment so we don't inadvertently drag this thing out a lot longer. Let me just ask, how many years did you have left on your existing mortgage, and what is the term on the new one? Well, I've had the house for five years, so I had 25 years left on the mortgage, and it's a 30-year refi.

Got it, okay. So if you just think in terms, Anita, and I realize you may not have the luxury to do this, but if you did, if you think in terms of trying to send one extra payment a year, you'd probably get close to taking that 30 years down to 25 years. So if you kind of get in that mode, perhaps we can recapture some of this time that we're extending through the refi. Second thing is, what led to the 20 to 21,000 in credit card debt that you have? Was it unexpected expenses? Do you have a budget that doesn't balance, and so you're using the credit cards to fund part of your lifestyle, or what's the result of that?

Well, when I first bought the house, I was in really good financial shape, but then when I bought the house, I ended up needing to replace several things, and I didn't have the cash, so I used credit cards to do that. Got it, got it. So you're living on a budget right now, a spending plan that balances, and do you regularly see at the end of the month you have a little bit left over? Yes. Okay, great.

And I'm contributing 12% to my 401k. Okay, great. And what about the idea of just paying off the credit cards in full, and then dropping the renovations down to let's say $9,000 or $10,000, but taking what you would have been sending to the credit cards moving forward and using that to try to replenish this perhaps reserve account that would allow you to do the additional 10,000 renovations over time? I've considered that, and I was trying to decide whether or not that would be a good option.

Okay. I mean, that would be my preference, just because I think we get out from under that interest, even if it's an attractive interest rate at 12% or 13%, as opposed to the typical 17, 18%, still a lot of money going out the door to interest, and so getting a guaranteed return equal to that is something I really like. So going ahead and eradicating all of that debt, being out from under it, but then not allowing that money to slip through your hands into other expenses, discretionary spending, but being purposeful about redirecting that to a reserve account that could be specifically for additional renovations over time. I really like that option. The other option, I guess, if there were some things like repairs that really needed to be done sooner rather than later, you could take the remaining amount, 10,000, and use Christian credit counselors, put it on a credit counseling program, which doesn't affect your credit score per se, although it will be noted that you're in a credit counseling program on your report, but again, that doesn't factor into the score, and that account would be closed, but you'd be able to get the interest rate lowered and pay it off 80% faster.

So I'd consider one of those two options. My preference would probably be to go ahead and pay it off in full, and then I think the key for the renovations is if you're planning to stay there, then do the things you're going to enjoy and make sure you find somebody who's reputable, who's going to give you a bid in writing before you proceed with any of that. If you're planning to move in the near term, I'd probably get some advice on what things to renovate that are going to return the most value to you upon the sale, but apart from that, it sounds like you're headed in the right direction, and I like the fact that your debt is headed down, at least on that high-interest consumer debt. Anita, thank you very much. From Independence, Missouri, let's stay in Missouri, Rolla, Missouri, and Robert, what's cooking?

How can we help? Hey, Robert, you with us? Yes, sir. Can you hear me? Yes, sir.

Go right ahead. I'm coming out of a history of a large credit card debt due to some business failure. I had $350,000 worth of credit card debt ten years ago. I sold off a couple pieces of property I had and paid this thing down. I'm down to about $40,000. The problem that I have is that I lost my job in May, and I've been utilizing these deals where they send you a flyer that says, Pay 3% and you'll be good for 0% interest for a year. And I'm running out of those things. I saw a thing from an outfit called Take Charge America and sent them all the information on the credit cards that I had.

They sent me a letter back and told me I was in big trouble that I should try and go to the local credit card people and see if they would help me. I'm in the process of downsizing my home to a much smaller home. Basically, I have a little bit of rental income, but it's paying some insurance as far as I'm 75. And it's paying some insurance as far as supplemental and life insurance. So I don't have a whole lot of income. I do have a little money saved. I was smart enough to save some back, but I'm having to pay this on the minimum on these credit cards.

And I was just wondering if you have any ideas where a guy could go. It seems like when you call these outfits that say we won't consolidate your debt, the first thing they want to do is get all your accounts and then they consolidate it and your credit score goes in the toilet. Now, I have maintained at least a 750 credit score during this entire mess.

And sometimes I've had to sell some things the night before the payment was due because that's the way it works. Well, I'm not as concerned about your credit score as I am getting you out of debt. You mentioned you have some small rental income. Robert, do you have Social Security coming in as well?

Yes, I have Social Security. It's 1,062 and my house payment's 1,000. Okay.

All right. Well, you know, there's obviously limited options here. I would connect with our friends at ChristianCreditCounselors.org. They're not going to consolidate in the form of a new loan. What they try to do is get the interest rates down, get you on a monthly payment. Problem is without work, without a steady income beyond Social Security and the rental income, which is all spoken for between the insurance payments, the minimum credit card payments and the house.

Apart from that, there's not much income there, obviously. So I'd say we either need to look for some part-time work to try to get that going again, or if you're already covering the minimums, perhaps you could just now redirect that through Christian Credit Counselors at a lower interest rate, which would get these debts paid off much sooner. So at this point, that's where I'd go next, just to have them look over your situation. Again, they're not going to do it with a new loan by putting everything together. They're going to just try to keep you where you are, close those accounts and get the interest rates down, get you on a monthly payment, hopefully that fits within the limited income that you have and get you on solid footing here moving forward. ChristianCreditCounselors.org is the place to go. If you have other questions after you talk to them, give us a call back. And Robert, super job in paying off all that you have. We'll pray that God provides you with wisdom and direction as you go forward. Thanks so much. It's MoneyWise Live with Rob West.

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Your Money Counts is available when you click the store button at MoneyWiseLive.org. Brittany is calling us from Muscadine, Iowa. And Brittany, thank you so much for holding. We know you've been there for a little bit, but what's your question today? Hi, thank you for taking my call. My question is about refinancing a home, if we should do it and if we should consolidate all of our debt into the home. Or maybe we've been working on fixing up our home to maybe take extra money out against the home to fix it up. I see.

So we've got plenty of options here, Brittany. Let me ask you a few questions. What is the value of the home, roughly?

We've done some work since we've had it, so I'm not sure we haven't had it exactly praised, but I would say probably $20,000 to $30,000 more than what we owe on it. Okay, so you have $20,000 or $30,000 in equity. That's helpful. You mentioned that you want to do some improvements. Have you gone through a list of the things you want to do? Do you know roughly what you'd need to spend to accomplish those projects? There's a lot that we still need to do. Yeah, I'm not exactly sure, but it'd probably be in about the same range to get everything done. Okay, and you mentioned some debt other than the mortgage.

Tell me about that. What do you have? We have a couple car loans, and then we've consolidated some credit cards and took it off, like used our car as collateral, and that's roughly about $26,000. Okay, and I'm trying to get a feel for the equity that you have in the house. What percentage of the home's value is that? So give me just roughly what you think the house is worth. About $70,000 to $80,000, or maybe even $90,000. I'm not sure. $70,000 to $90,000, yeah.

Okay, somewhere between $70,000 and $90,000. Got it. Okay, here's the bottom line. You know, I think one of the challenges is we want to not treat the symptom, but we want to really always tackle the underlying issue when it comes to dealing with our finances. Because we have to start with this idea that God owns it all, we're the steward or the manager of it, which puts us in a really important position in terms of managing God's money, and he's given us principles to follow when it comes to that management. And one of these ideas beyond God owns it all is that we need to live within God's provision. We need to accept what God has provided, and we need to live well within that.

Doesn't mean we can't try to, you know, pray for an increase or, you know, work hard and try to get a higher-paying job or, you know, whatever it might be. Whatever that provision is that we know comes from the Lord, we need to live within it. And that is only done with the spending plan, which means you need to have a budget. You've got to have a written account of everything coming in and going out, including those what I'll call discretionary expenses that are—you're not going to get a bill in the mail for, you know, the spending that just happens that tends to be the budget buster.

We also need to have the things that are non-recurring in terms of they happen a couple of times a year, maybe a quarterly insurance payment or a once-a-year homeowners association or something like that. And when you get all that in one place, then we've got to balance that budget. We've got to make sure our giving's in there, make sure all of our expenses are in there, make sure we're saving for the future, and make sure we're at least paying the minimums on all the debts that we have.

And then we really need to have some sort of margin left over that we can allocate to our priorities. If you don't have an emergency fund, that's the first thing to tackle, starting if you have credit card debt with $1,500 as your goal for that emergency savings. And then beyond that, with every dollar that's available, Brittany, we need to direct that to paying off this debt. The problem is when I hear, you know, we consolidated once using our car as collateral and we paid off some credit cards and now we're going to try to do it again, but this time we're going to use the house as collateral. My concern is that we're treating the symptom, which is overspending, and we're really not ever solving the underlying issue, which is I've got to live within my means and I can't do that without a budget. So I really wouldn't think about trying to tap the equity in your house, especially, you know, since with, you know, a $72,000 home. I mean, I'm glad that you have more than, you know, got about 30% plus in equity, but I don't want to see that go toward paying off the debts if it's only going to come back a few months later or a year or two later, because we're going to continue to overspend beyond our means. So I'd want you to really not even think about paying off that debt with the home unless you had demonstrated for at least six months that you can live on a budget, meet your obligations and have some margin that you could send toward additional debt reduction or to rebuild your emergency savings over time. So that's really step one. If you did that, then at that time, I might consider refinancing with a cash out and tell me about the interest rate that you have on the current mortgage.

It's four and a half right now. And we also want to kind of refinance, too, because my husband's not on the loan because he didn't have a good credit score at the time, so I was just on the loan. I see. Yeah. Now, that could be done without refinancing. It's really more important that he's on the deed to the house than anything, but you all do have good credit scores now? Yeah.

Okay. You know, you certainly could get, if you do, you certainly could get that interest rate down below 3% right now. The challenge is, you know, I'd really rather you not extend the term on it, so I'd probably match the term with the current number of years you have remaining on the mortgage. And again, I'd really not want you to pull any money out for the debt repayment right now until you can demonstrate you can live on a budget consistently. With regard to the renovations, I'd probably wait on those until you get this consumer debt paid off.

So at this point, I'd sit tight, really focus in on the budget, and if you need some help with that, contact one of our MoneyWise coaches. You'll find those folks up and plot your path forward from here. I hope that's helpful to you, and if you have other questions along the way, give us a call back. Brittany, thank you very much. We wish you guys the best as you go forward.

Thanks. Chicago, Tina, you're concerned about your mom's credit. How can we help you with that?

Yes, thank you very much. Yeah, my mom is 91, and I am her guardian and power of attorney, and she does have quite a bit of assets still in the bank that pays for her living expenses and stuff. But with everything going on in the world right now, I was just curious your input about freezing her credit. She doesn't need credit, and I just don't want anybody stealing her identity or anything like that and causing chaos. Credit is a good idea, Tina, but it's not going to protect her against, necessarily, identity theft. What it's going to prevent is somebody from accessing her credit report, which is going to protect against scammers' attempts to open fraudulent accounts. So if somebody were able to get her information through a breach of some kind or by stealing her identity through some means, when they try to use that information to open a fraudulent account in her name, they would not be able to do so because when they tried to pull the credit history in the attempt to open the account, they wouldn't be able to provide the PIN number, and that's going to stop them in their tracks.

That doesn't mean that they haven't already assumed her identity. So bottom line there is, yes, it's one tool in your tool belt, but you still need to take precautions to safeguard your and her financial information moving forward by using just good common practices. Don't click links in emails to fall into phishing schemes and be careful what information you give over the phone when somebody contacts you. Don't use a public Wi-Fi to transact business, change your passwords regularly, all those things. But going back to the freeze, still a good thing to do, and basically you'd contact each of the three bureaus. This is now free as a result of a change in the law last year.

Tell them you want to put a credit freeze in place at Equifax, Experian, and TransUnion, and then with that four-digit PIN number, anytime she or anybody else fraudulently tries to access that report, they would have to have the PIN number in order to do that. Does that make sense to you? Yeah.

Yeah, it does. And on a secondary question, I'm also the guardian of my brother who's in his 50s, and he has gotten into financial troubles numerous times and bankruptcies and stuff like that. And he does have, I think, the ability to try to get another credit card or something.

And I was thinking also on his, so he, to protect him from himself, to be able to freeze his credit so he couldn't open up another, because we're still getting cards, offers for him, and it's like he has no assets, his credit score is zero, and yet people, you know, it's just very frustrating. Yes. And so you have the, as guardian, you have the ability to make those decisions as power of attorney, is that right? Yes.

Yes. And that's why he's now starting to join these groups. He says on Facebook, and I'm like, no, no, no, no, don't don't do this. And but, you know, it's hard to control his access because he does have access to the Internet. And I just don't want him to get in trouble again. Yeah, yeah.

And so again, as long as you have the legal right to do so, yeah, putting one of these freezes in place, again, would prevent anybody from being able to open an account in his name without that PIN number because they wouldn't be able to access the credit report and with no credit report, no lender is going to extend new credit. So that would be a safeguard, assuming you have that, the right to put that in place on his behalf. And it sounds like you certainly do. So hopefully that's helpful to you. We appreciate your call today. Tina, thank you very much. Rob, Susan is on the line, but I'm afraid we're just not going to have enough time to get through a question with her permission. I'm going to ask it for her. She has five grandchildren received an inheritance from her dad. She wants to open a college fund for the five grandchildren. What's the best way to do that?

What do you think? Yeah, Susan, great idea. And I think 529 is going to be the way to go. You can open one in the name of each of the children. You can contribute up to 15,000 a year. So plenty per 529 because that would be per child. And that amount would grow over time. There will be investments inside of it.

As long as it's used for qualified educational expenses, you won't pay any tax on all the gains, which is great. And if there's money left over in any of the accounts, you could transfer it to another beneficiary. To find the best 529 for you, Susan, to open for your grandkids, go to savingforcollege.com.

You'll run a quick calculator and it'll give you a recommendation whether you use the in-state plan or another plan. Susan, you sound like a very generous person. May God bless as you go forward with your grandchildren's investments. You've been listening to MoneyWise Live, a partnership between Moody Radio and MoneyWise Media. Thanks for joining us. We'll see you again tomorrow.