The Dirt on Debt Collectors

This is Jamin Baxter and I serve as Business Development Director for Moody Radio. The only reason we're able to spread the gospel of Jesus Christ on the radio is because of financial support from listeners like you. We also have businesses support us too, like United Faith Mortgage.

Faith and family is at their core. It's why they choose to be such a close partner with our station. It's why they specifically advertise on Christian radio stations across the country.

It's why father and son John and Ryan still lead the company to this day. Check out United Faith Mortgage and their direct lender advantage at unitedfaithmortgage.com. Thanks to you and to United Faith Mortgage for supporting Moody Radio. United Faith Mortgage is a DBA of United Mortgage Corp. 25 Melville Park Road, Melville, New York. Licensed mortgage banker. For all licensing information, go to nmlsconsumeraccess.org, corporate NMLS number 1330, equal housing lender.

Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. This is Jamin Baxter and I serve as Business Development Director for Moody Radio. The only reason we're able to spread the gospel of Jesus Christ on the radio is because of financial support from listeners like you. We also have businesses support us too, like United Faith Mortgage.

Faith and family is at their core. It's why they choose to be such a close partner with our station. It's why they specifically advertise on Christian radio stations across the country.

It's why father and son John and Ryan still lead the company to this day. Check out United Faith Mortgage and their direct lender advantage at unitedfaithmortgage.com. Thanks to you and to United Faith Mortgage for supporting Moody Radio. United Faith Mortgage is a DBA of United Mortgage Corp. 25 Melville Park Road, Melville, New York. Licensed mortgage banker. For all licensing information, go to nmlsconsumeraccess.org, corporate NMLS number 1330, equal housing lender.

Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. It's a phone call no one wants to get, a debt collector bugging you about a bill you may not even remember. Hi, I'm Rob West. You may legitimately owe the debt, but maybe not. So it's important to know your rights. I'll talk about your options and how to deal with debt collectors first today. Then I'll take your calls at 800-525-7000. That's 800-525-7000.

Call it 24 seven. This is MoneyWise Live, biblical wisdom for your financial journey. You may not know it, but debt collectors have to follow a strict set of rules. They can't harass you. At the same time, we're not saying that debt collectors are all bad guys. In most cases, the debts they're attempting to collect are legitimately owed and they're within their right to collect them.

As you might guess, they have to deal with a lot of individuals trying to avoid their obligations. And as Christians, we never want to be the guy who dodges his debts. Proverbs 3 27 is clear. Do not withhold good from those who deserve it when it is in your power to act. We should do everything in our power to pay our debts and not run from our creditors, but toward them.

Don't be afraid to work with them. In many cases, you can work out a payment arrangement with your initial creditor. That way you can avoid having your debt being sold off to a collector in the first place. Now, as I said, many debt collectors are honest folks playing by the rules and just trying to make a living. But you know what they say.

It just takes one bad apple to give the barrel a bad reputation. So what do you do if you're contacted by a debt collector? Well, first of all, make sure you're the right person and that you actually owe the debt. Often, collectors don't have the latest address or phone number of the debtor, so they'll make cold calls to folks with the same name as the debtor. If you get a call in error, be polite, calmly explain that you aren't the person they're looking for and you don't owe the debt. But do not give them any personal financial information like your social security number. You can then tell them not to contact you again, and if they do, you'll report them.

Now, what if you do owe the debt? Well, it's important to know that you still have certain rights under the Fair Debt Collection Practices Act, which is enforced by the Federal Trade Commission. For example, debt collectors can't call you at all hours of the day or night. They're restricted to the hours of 8 a.m. to 9 p.m. unless you give them permission to contact you outside of those times. You have the right to tell the collector verbally or in writing that you're not allowed to take their calls at work and they should immediately stop trying to contact you there. If they continue to call you at your place of work, again, you can report them. And here's something else that will come as a relief. A debt collector is not allowed to contact a third party about you for anything other than to get your contact information, and they're prohibited from telling anyone that you owe money.

And here's something else. Debt collectors aren't allowed to lie, mislead, or use deception to collect a debt from you. Specifically, they can't lie about the amount you owe. They can't falsely claim to be law enforcement officers, and they can't claim you'll be arrested if you don't pay your debt. Also, a debt collector can't give false information about you to anyone, including a credit reporting agency. And finally, they can't use a fake company name to collect a debt. If a debt collector is attempting to use any of those prohibited practices to intimidate you, well, you can file a complaint with the Consumer Financial Protection Bureau. You would do that online at consumerfinance.gov. There you'll find even more information and tools to help you, including sample letters you can use for dealing with debt collectors.

We'll put those and other links in today's show notes. But let me repeat, if you legitimately owe a debt as a witness for Christ, you need to make arrangements to pay it. As we said, run toward your creditors, not away from them. Romans 13 7 is a great reminder about meeting our obligations.

It says, Pay to all what is owed to them, taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed. For help paying down your debt, contact our friends at christiancreditcounselors.org. They have standing arrangements with many creditors to lower your interest rates. They can help you pay down your debt up to 80 percent faster than going it alone, and I highly recommend debt management as the preferred approach to get out of credit card debt.

Not to mention their believers, they'll pray with you and encourage you as they counsel you along the way. Also, our volunteer coaches are trained, ready, and waiting to help you get on a budget so you'll have an easier time meeting your obligations. Just click connect with a coach when you visit moneywiselive.org.

Again, look for links in today's show notes. Well, I hope that helps you, especially during what can be a difficult season as you navigate debt that you're trying to pay off. Your calls are next, 800-525-7000.

That's 800-525-7000. I'm Rob West, and this is MoneyWise Live. Thanks for tuning in to MoneyWise Live. I'm Rob West, your host.

We're so glad you're along with us today. In just a moment, we'll begin taking your phone calls on anything financial. We'll apply God's truth to whatever is going on in your financial life, be it saving or investing. Perhaps it's giving or debt reduction. Maybe you want to talk about lifestyle.

How do you establish your lifestyle, your spending in the midst of competing cultural message that's juxtaposed with God's Word? How do you process all of that? Well, we can help you do that today. Here's the number 800-525-7000.

That's 800-525-7000. We'd love to hear from you. You know, as we think about this idea of being set apart from the world, you know, a good way to start is by practicing stewardship. You know, we live in a culture that glorifies materialism, and frankly, true stewardship stands out. You know, we have to begin with this idea that God owns it all. He's created everything.

He owns everything. We own nothing, which means that what we're managing are God's resources. That makes us the king's money manager. The question is, are we going to be found faithful in managing those funds?

We've got to be responsible as well. Because we have no rights, we temporarily possess the Lord's provision, and we have to use responsibility to handle those resources wisely. But we also see this idea of reward as well. You know, the reason we have to be good stewards is because of what God has already given us, the priceless gift of his Son for our salvation. But he promises even more blessings. Not always financial, but certainly more blessings when we're faithful stewards. And I think one of the keys to all of it, once we recognize God's ownership, is holding everything loosely. Recognizing it's not ours, so therefore we have a posture of an open hand, which means we give generously. And one of the secrets to giving is that it breaks the grip of money over our lives. You know, these are the big ideas that we explore on this program, and it has a lot to do, I believe, with our journey, our faith journey with the Lord, how we handle money.

It's one of the chief competitors to Lordship. So together, let's get that right. By the way, we'd love to hear from you today. We've got some lines open. Again, here's the number 800-525-7000.

Give us a call right now, and we're going to begin today in Inglewood, Florida. Hi, Terri. How can I help you?

Hi. My question is, it's kind of close to my heart, so it's hard for me to decide what to do. I have two daughters, and I have to sign some beneficiaries over to whoever I choose. And I'd like to give it to them, but my oldest daughter, she's distanced herself. She has no contact with me. She's had a child I haven't met. She just has nothing to do with me. She's, in the past, stole from me, and I've forgiven her, but I just don't know what to do.

Yes. Well, I'm sorry to hear about that, Terri. I know that's a challenging situation, and obviously what's paramount is her spiritual condition, and then beyond that would be your relationship, you and her together. And I think, you know, one of the first questions, even before the financial piece of this, is, you know, how is the Lord leading you to handle this situation, and what might you do to, over time, restore that relationship? And then, how can the financial piece be a part of that? You know, we are going to leave to our kids, certainly, financial capital, but also spiritual and social capital, and I think we've got to consider all three. You know, often, if you have a child making poor lifestyle choices or not handling money well, giving them more money is actually going to make the problem worse, and so that's not always the right answer, and so we've got to consider that side of it. As we look at the spiritual condition of each child, we recognize that withholding may actually hinder or harm them coming to Christ, and so perhaps the Lord might lead you to give lavishly to a distant family member, in the case of a child where there's a disconnected relationship, just because you believe that's going to lead to the greatest opportunity for an environment where he or she can come to Christ.

And so I think as you consider all of these things, perhaps the Lord will make it clear to you how you should proceed. Keep in mind as well, Terry, that a decision on a beneficiary is not permanent. You can change that as often as you wish, and so you may decide, based on the strained relationship or based on the decisions your daughter is making, to not include her as a beneficiary on this account. That could certainly change, and obviously as you prioritize that relationship and allow the Lord to work there, perhaps even restoring that over time, you can change that at any point. I think another consideration is what Ron Blue makes clear in his book Splitting Errors, and that is that if we love our children equally, we will treat them uniquely.

And the idea there, which perhaps flies in the face of what we believe to be fair, quote-unquote, as Americans, is we may choose to transfer wealth differently to one child over another, based on where they're at financially, or again, lifestyle choices, their spiritual conditions. So I think you need to look at all of it and don't feel guilty about a decision you make. I think what you want is the Lord's discernment on the best path forward, again, to promote, number one, her relationship with the Lord first, and then secondly, her relationship with you. And whatever it will take to restore that over time, I think, you know, that's the direction you should perhaps head. But give me your thoughts on some of the things I've shared. Well, I was always in the mindset of you, I treat the children fairly, but you just give me something to think about where you treat them uniquely. And that's something I'm going to have to think about, you know, because maybe one child it would benefit better than the other. And the one thing I thought about if I left my oldest daughter equally in it with my other is maybe if I'm gone and she receives this gift that will open her heart up to all the things that I instilled in her as a mother and a parent raising her and bring her back to thinking more about what she's done.

Yes, I think that's often the case, and I think that's really wise thinking, perhaps even different than the thinking you had coming into this conversation. So I think you ought to just process that a bit, ask the Lord to give you some wisdom. The other thing I'd like for you to do as you really consider this is to read this book. I'll send it to you as our gift. It's called Splitting Errors, H-E-I-R-S, and I think as you unpack in this book the principles that Ron outlines from Scripture, specifically related to how we handle wealth transfer to the next generation, it perhaps will give you some new thoughts, some new ideas, and lead you to a decision that you can have some confidence in.

But again, that can change over time and it will, and it's as easy as updating the beneficiary. So Terry, you stay on the line. We'll get your information and get that book Splitting Errors right out to you.

I think it'll be an encouragement to you. We appreciate your call today. Some phone lines are open, 800-525-7000. Call right now. Jeff's in Chicago, Illinois. Hi, Jeff.

How can I help? Hey, thanks for taking my call. Love your program. So I'm getting a couple years away from retirement. I'm probably 68, and my wife and I were talking, and we're going to interview some financial advisors. And I've been on your website and looked at some CKAs, and some say they're fiduciaries.

Some don't mention it. I'm not sure I need financial and more tax advice and maybe estate planning. I'm not sure I need investment advice, although I'm open to hear about it from somebody. So I'm a little bit confused about, do I need a fiduciary? And maybe you could explain that a little more detail.

Yeah, absolutely. This is something that's gotten a lot of, well, there's been a lot of discussion about it in the media, and it simply means that this is somebody who's going to put your best interest before their own. You know, fiduciaries are bound by a fiduciary duty, as they recommend, in particular investments related to your goals and objectives. And so I think choosing somebody, if they're going to manage money for you, that's going to serve in a fiduciary capacity is a good decision. But backing up even before that, Jeff, I think, as you've already alluded to, the first thing you have to do is solve for what type of professional do you need based on what you're looking to accomplish?

Is it planning, which can be done even on an hourly basis, which removes all bias from the situation? Because, you know, if an insurance policy is recommended or a particular investment strategy, there's no benefit financially to the advisor or professional in that case, because you're simply paying them for their time to help you plan and make decisions moving forward. Is it an estate planning attorney where you can work on wealth transfer issues and legal documents to carry out your estate plan?

Is it tax planning or retirement planning or college planning? Or are you looking to delegate or at least consider delegating investment responsibility for your investable assets? And at that case, you would need an investment advisor. And often with a wealth manager, they would combine both the planning and the investments.

But that's not necessary, depending upon what your needs are. So I think really bringing some clarity into what you're looking for is the first decision. And then based on what you need, clearly, if you want to consider somebody to take over investment management at that point, I would be looking for a fiduciary on the planning side.

I would be looking for somebody who you can pay by the hour. And the same would be true for an estate planning attorney. When you get beyond that decision and decide what professional you need.

I think somebody who shares your worldview and that's why we promote the certified kingdom advisor. And then I think a clear understanding, Jeff, of how they're compensated. You're going to want to know how they get paid, how they plan to communicate with you and whether they can adapt that to how you would prefer to be communicated with both frequency and method of communication.

And what is their experience? How are you going to fit into their overall client mix? Are you going to be kind of at the bottom rung or, you know, near the top? Are they going to involve another advisor in that relationship?

I think these are all questions you'll want to include as a part of your discovery. And then clearly they're going to need to ask you a lot of questions to make sure it's a good fit as well. So hopefully that helps you my friend. We appreciate your call today. We'll be right back with MoneyWise Live.

Stay with us. Delighted to have you with us on MoneyWise Live. We've got some phone lines open 800-525-7000. That's 800-525-7000.

Let's head to Holland, Michigan next. Steve, thank you for your call today. How can I help you, sir? Yeah, hi. Thanks for taking my call.

We're regular listeners. Appreciate your information. I have kind of a two-stage question. My wife and I are looking at some estate planning. We are recently retired and do not have an up-to-date will or powers of attorney or anything like that. We're looking at getting a revocable living trust set up and wondered what the benefits of that would be and the cost because the proposal we have seems fairly pricey, but it is kind of an all-inclusive package. And then the second stage to all of that is we have IRAs and the attorney is proposing what's called a Medicaid asset protection trust, which would basically protect assets from the five-year look back that Medicaid has as far as recovering potential assets and things like that. So I'm not sure if that all ties together for you. Does that kind of paint your picture?

It does, yeah. And I'm glad to hear you're addressing these issues because, you know, the getting your estate plan in order, thinking about the decisions that you're going to be making as a wealth transfer process being the last stewardship decision that you'll make is key, and then executing that in an estate plan with the necessary documents is really important. And I concur having a professional do that is really the way to go. I wouldn't use a free solution online or anything like that just to make sure everything is up to date and in line with your particular state and appropriately reflects the decisions you and your wife have made. With regard to the revocable trust, I think ultimately that's something you need to talk through with a estate planning attorney. Some of the benefits at a high level would be that it happens outside of probate, that there can be triggering events both before death, which is not the case with a will, it goes into effect at death, but if you're incapacitated, the trustee the trustee could make decisions on your behalf based on the trust documents. If you wanted disbursements of your assets to take place in, you know, periods following your death based on, again, certain triggering events, if you have a lifelong dependent or minor children, a trust is great in that case as well. It's more, it is anonymous happening outside of the public record. So there are some real benefits, but not everyone needs one.

And as you said, it's a bit more expensive. So I think you just need to talk through your goals and objectives and decide whether a revocable trust is necessary or would be effective for you. You would also want to have a will as well, because the trust is only going to take care of things that are retitled in the name of the trust, and so the will would cover everything else.

In terms of Medicare, Medicaid look backs and Medicaid planning, you know, I would obviously take the advice of a legal professional there as well, and an elder care attorney or an estate planning attorney could help you understand the difference between an IRA that's in a payout status where you are taking required minimum distributions versus a non-payout status, which may make it exempt or non-exempt from Medicaid asset eligibility. Of course, once it's in a payout status, they would look at the income as affecting that as well. And then trusts also are considered there. A revocable trust generally considered a countable asset. Irrevocable is generally considered non-countable. But again, there are various types of trusts, and that's where an attorney could really help you think through all of it.

So I would just proceed in the path that you're on, taking care of not only the trust and the will, but those other documents as well, which will be really key in making sure your wishes at the end of life are carried out as well. So we appreciate your call today. Thanks for listening, Steve. May the Lord bless you.

We'll be right back. We're grateful to have you with us today on MoneyWise Live. Have you checked out our new website lately? We'd love for you to visit MoneyWiseLive.org, where you can access broadcast archives, great content from our 14 content providers, including the National Christian Foundation, and Generous Giving, and Soundmind Investing, and many more. You can also jump into our MoneyWise community and post questions once you create a free account. You'll get responses from our MoneyWise coaches. You'll also see where you can access our MoneyWise app. It's all there on our website, MoneyWiseLive.org.

Check it out today. We've got some lines open. We'd love to hear from you. Whatever's on your mind today, financially speaking, that is. We'll apply God's principles to what's going on in your financial life and see if we can't help you make some decisions and move forward with confidence. Here's the number, 800-525-7000. That's 800-525-7000.

We're going to head south to West Palm Beach, Florida. Hello, Norma. How can I help you? Hi. Thank you for taking our call.

I have a quick question. We've been saving to get our down payment, but we're not far alone. We've been asked to leave the current rental property that we have. We've been looking around just to see if we could just switch to another rental, and the prices are just very high, 1800, 1900. I wanted your advice.

I know we should have 20%, 30%, but what do I do in this situation? Thank you. Well, I appreciate the question. It is a challenging market.

There's no question about that, Norma. Rental prices, because of what's happening in the real estate market, are very elevated right now. It puts you in a real bind, I understand. You said you are in the process of saving for a down payment based on what you would hope to spend. I realize things are more expensive today than they were a year ago. What is your goal in terms of what you need to save to get that 20% down payment? We will need to do this probably through next June.

We will need to do, yeah, through next June, and possibly we'll have about 20%, but we'll be asked to move in the next 30 days. Yeah, and so what are you able to put aside every month toward the down payment fund? If everything were to remain the same, about $2,000. $2,000 a month.

Okay, that's great. And what are you paying now in rent, and what would you need to pay to find something comparable? Well, right now we're $1,400, and that's just it. We cannot find something comparable. I will have to go up to $1,800, $2,000 to find something comparable.

Yeah, yeah. All right, and how much have you already put aside in that down payment fund? We have about $7,000. Okay, and is that including your emergency fund, or do you have that separate from the $7,000? No, that does not include our emergency fund. That's just our savings right now. We finished paying some credit cards and then started doing, yes. Okay, but $7,000 is the extent of the savings that you have all in, correct?

Yep, correct. Okay, all right. Yeah, you know, I'm going to encourage you to wait. As much as I don't like you, you know, continuing to pay for rent, especially given that the rent prices are going up, you know, for you to try to get into a home with $7,000 and not having anything left over to fall back on in the event of the unexpected, not to mention the private mortgage insurance that you'll have to pay for a conventional loan on top of the mortgage payment, which doesn't do you any good. You know, I think you're going to end up in a situation where you have little to no equity. You know, if the housing market were to take a dip, you'd be upside down at that point, stuck in this house with the PMI on top of that. And, you know, we just are going to have to go to credit cards if something happens.

So I think you just need to continue to look. Let's probably lock in maybe a shorter term lease. Hopefully we'll see prices come down a bit by the time you're ready to, you know, sign another lease or, Lord willing, if you're able to stay on this trajectory, I realize you won't be able to save quite as much every month if the rent goes up. But let's say maybe it's not next June, but next fall, you're in a position where you're able to go ahead and buy. I think you may even find that housing prices are a bit more attractive at that point. I would also be thinking, Norma, in terms of both saving first for the emergency fund, I'd get at least one month worth of expenses in your emergency fund, and then, you know, pivot back to the housing fund. I realize you could pull from it in either case.

But what I don't want you to have is a situation where you say, OK, we made it. We have our 20 percent down. But in order to do that, you've got to spend every available dollar. I would really separate those two and prioritize not pulling from the emergency fund when you're ready to make that 20 percent down payment. I realize that's going to take a bit longer, but I just think it's going to put you in a stronger financial footing and not have you in a situation where you're either upside down, paying PMI or finding yourself with some unexpected expenses. You don't have the resources to cover it. And now on top of that mortgage payment that's stretching you, we're having to run up some credit card debt to cover an unexpected expense.

So I think we've just got to wait this one out. I realize it's not ideal, but I do think you'll be glad you did, especially if something comes out of left field. So you hang in there, keep being diligent and keeping your lifestyle at a minimum so you have as much margin as possible to continue to save. And I think at the end of the day, you'll be excited that you took this path. We appreciate your call today.

We're going to stay in South Florida, Fort Lauderdale. Hi, Mary. Hi there.

How are you? Thank you for calling. Thank you for taking my call.

My question is, what kind of advice could you give to me or give to someone who's looking to kind of like pay for their final expenses? I had heard it. I thought I heard it one time on your program where you were saying free arrangements like with federal homes or what have you. It's not the best thing to do idea. And that was something that I was interested in doing. But after hearing that, that's why I'm making this call to get more clarity on what's better.

Yeah, well, I appreciate you asking. You know, it can give you some peace of mind, of course, to know that your arrangements have been prepaid. There are potential problems.

It doesn't mean that this is going to happen for sure. But of course, the first issue is those funds are tied up and you might need them for other things like medical expenses. So, you know, once you prepay a funeral, there's no getting that money back. Secondly, if the funeral home went out of business, um, there's been a steady decline in the U.S. of the number of funeral homes for the past decade. And, you know, if we see that continue, you could be prepaying a funeral for a funeral home that goes out of business.

Unlikely again, but certainly can happen. And then it's difficult to change your mind. You know, if you prepay your funeral and later move somewhere else, those funds don't go with you. So, you know, what is often recommended in place of that is a payable on death bank account where you save the money there over time.

It remains liquid. And then it's designated for that purpose. But if you need to access it, you could do that at any point. So I think, you know, that's another way to go about it, where you're essentially kind of being your own bank for these funds that are earmarked. But again, if you need them, you can pull them back. Or if you want to change your mind about how this is being done, you have that ability to do so financially speaking. And that doesn't mean you can't go ahead and make decisions and plans that make this really simple for your loved ones in the event of your death. So that's already been decided.

So I would just kind of think through that before you make that final decision. And we appreciate you checking with us today. We've got some lines open. We'd love to hear from you. We're going to take a quick break.

When we come back, we'll go right back to the phones. 800-525-7000. We've got several lines open.

800-525-7000. Stay with us. Thanks for joining us on MoneyWise Live.

I'm Rob West, your host. Have you considered joining our MoneyWise community as a supporter? We would certainly be grateful.

MoneyWise Live and MoneyWise Media are listener supported. We can't do what we do without your generous support. So if you'd consider a one-time or a monthly gift, we'd be grateful. You can do that quickly and securely on our website, moneywiselive.org. Just click the donate button. And our gift to you between now and the end of the year is the brand new book from Paul David Tripp called Redeeming Money. It's one of my favorite new books on biblical finance, and we'd love to send you a copy of it again. As our gift, just click the donate button when you head to moneywiselive.org. We've got a couple of lines open.

800-525-7000. Sharon, I understand, is driving in Fort Lauderdale. You be careful, Sharon.

But tell me how I can help you. Good evening, gentlemen. Tomorrow is a funeral is a funeral service for my sister.

She passed away from COVID-19. So I would crave your prayer. A year ago, I left my job. I was planning to return part-time, but that does not happen. So I have 57,000 in my 401k. I do need to know what to do with it. I'm 58 years old. I have 10 months mortgage.

And I have a wonderful husband. I do not need that money. So I have 35,000 left on my mortgage. I need to know where to put that money. Yeah, I would encourage you to leave it inside a retirement account.

So either transfer it to a new 401k if you're planning to go back to work and they allow you to do that, or roll it into an IRA, an individual retirement account. What is your plan, Sharon, moving forward with regard to work? Are you seeking employment right now with someone else? I am employed full-time.

I have a wonderful husband, so I don't have a money problem. Okay, great. And do you have a 401k with your current employer? I do. I also have a Roth IRA ongoing now.

Yes, very good. So should I put that to that IRA or open a new one? Yeah, you won't be able to do that. What you would have to do is transfer it to a new traditional IRA and then convert it to a Roth, but I wouldn't do that. You would have to add all of that to your taxable income for this year, which would create a pretty significant tax liability for you. What I would first look at is, just for simplicity's sake, whether or not your current 401k would allow you to roll this previous 401k into it.

It would keep everything in one place. So as you're contributing to your new 401k with your current employer, this money would just be added to it and it would create, avoid you having to have a yet another account. And you could just roll it into the same investment strategy that you have, you know, going on with the new contributions going into that existing 401k. So that would just be a simple call to your plan administrator to say, I have a 401k with a previous employer. I'd like to roll those funds into my existing 401k with you. And if they let you do that, they'll give you the paperwork to get that done. If they're not giving you that option, then that's when I would look at not your Roth IRA, but you'd be opening a traditional IRA, which is a tax deferred vehicle. It would be a non-taxable event. And then you'd roll the proceeds from the 401k into that new IRA, probably wherever you have that Roth custodied, you can open the traditional there.

But I think just for simplicity's sake, I'd probably start by looking at merging it in to your current 401k. Does that make sense? Okay. Sounds good. Thank you.

All right. Thank you, Sharon. We appreciate your call today.

Let's head to Land O'Lakes, Florida. Hi, Shirley. How can I help you? Hi. Thanks for taking my call.

Yes. I'm 72 years old and I'm a widow. I've been a widow for six years and I've lived my life in Northern Virginia, but I recently moved to the Tampa area, Land O'Lakes, because I have a son down here. I was really on the fence about what would your advice be to buy rather than rent? I actually bought a small villa and I'm sort of second guessing myself and saying maybe I should have gotten advice. Well, what is it that's tripping you up that you're concerned that perhaps you overpaid or something else? Well, I probably did overpay, but I also in the sense that the prices are elevated now, even in Florida.

Yeah. But I did a handsome profit on my home in Virginia so that I can manage. I do have a mortgage, but I can manage it.

It's $1,200 a month. The house needed a lot of work, and so I'm having renovations in it. I'm just getting worried about my finances in the future, I guess is what the bottom line is. Should I continue living in this house or should I look to rent?

Yeah. Well, I think I would have to look at kind of what your mortgage payment is and then what you're needing to do to kind of get it to where you feel good that it's livable and any needed repairs are done and then renovations beyond that. But I like the idea of you owning something as long as you didn't stretch and buy something that really is out of your reach financially, especially given, and we just had this conversation a few moments ago with another caller, rental prices right now are very high. And so for you to get a comparable place as a rental, you're probably going to be spending more every month than even your mortgage and you don't have any equity to show for it. So I think you've made a good decision so long as the mortgage payment that you have and the repairs and renovations you're planning to do aren't going to stretch you beyond what you have the ability to pay for and that's going to ultimately come down to your spending plan, your budget.

What are your income sources? Do you have a proper accounting of everything it takes for you to fund your lifestyle on a monthly basis and with some margin left over or is this payment kind of pushing you outside of being able to live within your means? And then beyond that, what resources do you have for these renovations and is that going to eat into, you know, some of your savings that you're going to rely on for the future?

So give me a sense of that. Does your budget balance or do you feel like some of these, this decision to buy this place has pushed beyond your ability to fund it? No, no, it's a $1,200 a month mortgage. It does have a $175 a month, $175 a month HOA.

It is a gated community. But no, I think my finances are already, I think maybe I'm, you know, I just, I'm concerned because I am alone now. I'm a retired teacher so I don't have a super amount of money coming in. I have a portion of my husband's, my deceased husband's retirement coming in and I'm not in debt.

I have one credit card that I use and I've been using it for the renovations and I pay it off each month. Okay, all right. So that's kind of where I am. I'm not stretched for money.

I just want to be wise. Yeah, well I think as long as this fit within your budget, we would typically use a 25% number if your principal interest, taxes and insurance is less than 25% of your, you know, income sources that you have, your take-home pay. You know, that as a rule of thumb would say that that number works in terms of balancing your budget. Ultimately, it's going to come down to, you know, the actual income and expenses. But this decision to buy even in the midst of elevated home prices, especially in Florida, I think is still a good one.

If you plan to stay there, it fits within your budget and you're not going to pay, you know, exorbitant rental rates without any ability to build equity and over time actually pay for it so that your mortgage payment goes away. So I think you're on the right track, Shirley. It sounds like you've really thought through your finances. You're living modestly and well within your means.

So I don't hear any red flags. If you want a second opinion, somebody who can look over the finer points of what you've got, feel free to connect with one of our MoneyWise coaches who'd be happy to look over your situation and give you some additional counsel. But I think you're making some great choices here and you're really on the right track. So we appreciate your call today and call us back if we can help at any point along the way. We're going to stay in Florida yet again, West Palm Beach.

Marie, how can I help you? Hi, thank you for calling my call, taking my call. I have a mortgage of about $215,000 and right now I'm paying interest on $140,000. In the West, the $7,000,000 is a balloon that I'm supposed to pay at the end when my mortgage is mature. Some people say I should re-sign it right now.

My interest is $4.0. So I'm wondering, should I re-sign it right now or should I wait after I finish this $140,000 and leave the rest for when I'm... You would certainly want to do it then. I think the question is, could you get a better interest right now assuming you're planning to stay in this home? And then secondly, what would that do to the payment once the whole balance was included in the mortgage as opposed to what you have now with a third of this on the back end where it's not factored in? It doesn't sound like to the mortgage payment every month. If you were to get a new mortgage based on the full $215,000 that you owe, Marie, do you believe you'd be able to cover that in your monthly budget? Well, what I wanted to do is that I was trying to see if I can pay the $140,000 as fast as possible. Then we financed the $7,000,000 because I'm not going to have that money to pay it all in full.

Yeah. Well, I think the key is not which portion gets paid first, but if you're planning to stay there, how do you get this paid off with the least amount of interest? I would look at what would happen assuming your credit score is good and you could get an interest rate at least 1% lower.

I think you would end up paying less in total interest over the life of the loan by refinancing, but that would have to ensure that the resulting payment on the full balance would fit into your budget. So you stay on the line. We'll talk a bit more off the air and we appreciate your call today.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I want to say thank you to my team today. Thank you for Chris sitting in on our phones today and for Amy who was engineering and Dan, grateful for you as well. Thank you to Jim Henry also. We appreciate you being here. We'll be back tomorrow to do it all over again. I hope you'll join us. In the meantime, may God bless you.