Trail Guide: Pt. 3 A Helper for the Way

Critics of the recently passed $1.7 trillion omnibus bill have to admit it has a few silver linings for retirement accounts.

Hi, I'm Rob West. When Congress is involved, you have to take a win whenever you can get it. And the new legislation is a definite win for retirement savers with a 401k, 403b, or Roth IRA. I'll talk about it today and then it's on to your calls at 800-525-7000.

800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Okay, so we recently talked about how the new spending package passed by Congress contains an important provision for folks with unused money and 529 education savings accounts. 529 money has to be spent on qualified education expenses and that's always been a sticking point for folks who want to save for their kids' education. If there's money left over or the child decides not to go to college, the 529 plan holder was stuck.

Spending it on anything but education draws a 10% penalty. But starting in 2024, up to $35,000 of that money can be rolled into a Roth IRA if it's been in the account for 15 years. This is a big break for parents who put money aside for their kids ahead of their own retirement. The money can also be rolled into the child's Roth account if parents don't need the money, so that's a big win. But the legislation has several more wins for retirement savers.

It enables employers to help workers save for emergencies, it helps workers repaying student loan debt, and makes retirement plans more accessible to part-time workers. But folks with a Roth account may get the biggest win coming out of the legislation, whether it's a Roth IRA or Roth 401k. If you're new to investing, here's how these plans work. Money contributed to Roth accounts is taxed differently from conventional employer accounts like 401ks and 403bs. With those accounts, contributions are made with so-called pre-tax money. You get a deduction on your tax form that year. But when you retire and withdraw that money, it's taxed as regular income based on whatever tax bracket you're in at the time. With Roth accounts, your contributions are taxed going in.

You get no deduction for that money when you file your taxes that year. But when you withdraw that money later in life, presumably when your income is higher and you're in a higher tax bracket, you don't have to pay taxes on it. There are income restrictions that prevent higher earners from opening Roth accounts and other rules to follow, but for the majority of folks, Roth accounts are very attractive. And there are actually two types of Roth accounts. One is a Roth IRA, and you can set one up on your own with any brokerage account like Fidelity or Schwab. Then there's the Roth 401k that your employer can offer.

Now, since money going into a Roth IRA is already taxed, in other words, Uncle Sam got his share up front, those account holders don't have to start withdrawing that money when they reach age 72. They're not subject to required minimum distributions, and they can just let the money grow. But that hasn't been the case with Roth 401ks. They were subject to the same rules as a conventional 401k.

Account holders have been required to begin taking minimum distributions at age 72. The new legislation wipes out that requirement for Roth 401ks starting in 2024, another big win for retirement investors. Another win involves matching contributions. Employers can offer them to Roth 401ks, just like with regular 401ks. Right now, employer matching contributions to Roth 401ks have to go into the employee's regular 401k account and be subject to taxes in retirement. But the new legislation will allow employers to put their matching contributions into an employee's Roth or conventional 401k.

Why is that a win? Well, remember that the benefit of a Roth account is that you pay taxes on contributions when your income is probably lower and so is your tax rate. Then later in life, when you're earning more and probably in a higher tax bracket, no taxes are due on withdrawals. The more money that goes into the Roth side of a 401k, the better off you're likely to be, and the legislation allows for that.

So some big changes are coming in 2024. We hope this information helps you make wise decisions about your retirement savings. Psalm 27 23 tells us, know well the condition of your flocks and give attention to your herds. I'm Rob West and we'll be right back. Stick around. Great to have you with us today on Faith and Finance Live. I'm Rob West, your host. All right, it's time to take your calls and questions today on anything financial. The number to call is 800-525-7000.

That's 800-525-7000. We'd love to hear from you today with whatever you're thinking about financially speaking. By the way, we started today by talking about Roth IRAs, and if you'd like to explore that further, perhaps you need a local financial professional. We're here at Faith and Finance Live. We recommend the Certified Kingdom Advisor designation to find a competent professional who's met high standards, including being trained to bring advice that aligns with your values and priorities as a Christian. So to find a local CKA in your area, just head to faithfi.com.

That's faithfi.com and click Find a CKA. We appreciate you considering that, and if you do, I would interview two or three, by the way, before you make the final selection. All right, it's time to take some phone calls today. We do have a few lines open, although the calls are coming in quickly. So let's get started today, and we'll begin in Kentucky. And Robin, how can we help you?

Yes, thank you for taking my call. For my income tax in 2022, I want to put the refund money into an IBAR instead of getting it into the checking account. What does my accountant or tax preparer have to check off on the paperwork on the 1040? I don't know if they're familiar with IBAR.

Yeah, they should be. I would just bring that up that you'd like to do that. Essentially what happens is when you file your tax return, you have to include IRS Form 8888, and then you complete Part 2, which basically tells the IRS that you want to use part or all of your refund to purchase paper IBARs. You can do it in multiples of $50, and you can go up to $5,000. And then the difference, if there is any remaining funds, that will come to you either by direct deposit or check. So it's not going to be on the 1040.

It'll be a separate form that's filed with the tax return, and your CPA or tax preparer should know all about it. So just let them know that that's what you'd like to do. Alright, thank you so much. Okay, thank you, Robin. We appreciate it.

800-525-7000 is the number to call. Let's head to Pompano Beach, Florida. Hi, Sydney. How can I help you? Hi, Rob.

How are you? And thanks for taking my call. Absolutely. So I just had to, I hadn't incorporated, and I had, it's gone now. So I have a credit card in my incorporated name that I have to find a place to put the balance. So I have a little over a hundred thousand in an ETF. I have about 15,000 in the stock market, and I do have a little bit of an emergency fund, but it's only maybe a third funded. Okay. So my options are either to take from the ETF, take it to the stock market, or transfer it into another credit card or loan or something like that.

Yeah, very good. So how much do you owe on credit cards? Well, just this particular credit card is just over 11,000. Okay, and what else do you have that you owe on credit cards? I have two other credit cards, and one is at about probably 90% usage, and the other one is maybe at 40%, but it would not give me enough balance to transfer it onto that card.

Yeah, yeah. And I wouldn't really recommend doing that. So what's the total amount you owe 11,000 plus how much between the other two? One of them is like maybe 1,500, and then the other one is probably about 7,000 or 8,000. Okay. And is this all business debt, or is this just from personal lifestyle spending? Just the 11,000 is a business debt.

The other are personal. Okay. And tell me about the business.

How is that doing? Well, I'm a home health physical therapy provider, so I opened it up to, I guess, protect myself, but I don't really need it, and it's just more hassle than it, you know, it's tax-wise, that's why I did it. But it's gone now, so I have to close the business account that was associated with it. So I have that still open, and this credit card is still open, so I have to get rid of them. Do you have to pay it off in one lump sum, or can you just pay it off every time? Well, the time is kind of up.

The business was closed for a year before I even knew it on the state of Florida's end. So I just found this out yesterday. So I have to, it doesn't have to be all in one lump sum, but you know, the sooner the better. But I do have to get that account closed ASAP, and I was told that they would prefer that the balance is paid before I close the account and close the credit card.

Yeah, makes sense. Okay, well, I think the big thing I'm trying to get at is have we kind of broken the cycle of charging on these cards, because I think the most important thing is that regardless of how we choose to get this paid off, and I can understand given that the business is now closed, you need to do that relatively quickly. I also want to make sure that we've solved the underlying issue and not the symptom, and that is either overspending to fund a business that we need more working capital for, or just lifestyle spending beyond your means.

And I realize that can be challenging if you work for yourself. And you didn't mention whether or not you have another job, but regardless, I just want to make sure that you're not going to add to these cards once we get them paid off. Have you been able to avoid putting any additional on the credit cards for a period of time? Oh yeah, I haven't. It's really this whole year, this past year, I haven't really been using them, and I've been, since I've renewed my faith in God and listened to your program, everything stopped and I've been changing little by little. So I'm on the downward spiral, yes. Okay, I like to hear that. That's great.

Congratulations, Sydney. In terms of these accounts, the $100,000 and the $15,000, are either of these inside a retirement account or are these what I call taxable accounts? I really don't know. One of them is an ETF. That's where I have the $100,000. I mean, it's through Fidelity.

So I mean, really, that's all I know about that. But as far as you know, it's not an IRA? No, it's not an IRA. It's like a mutual fund or like a different kind of money. Okay, so it's probably just in a taxable account.

And how are these? Are they down a good bit from where they were, let's say, a year ago? I mean, a little bit. It's really only, I've maybe lost maybe $7,000 or $8,000, but it's still above what I put into it. Okay, well that's great. So yeah, I mean, I think you definitely ought, especially given the circumstances here, probably ought to focus on paying off the business credit and I think, you know, I'd probably pull it from whichever account is down the least and you can look at that and determine that. And then that one's gone.

You've wiped it out. In terms of the $7,000 to $8,000 or maybe as much as $10,000 between the two that you have left, I'd probably look at putting those on a credit counseling program and letting these investments come back and grow. I would also systematically start moving this money if it is long term money that you want to keep invested for the long haul. Let's try to get it into a tax deferred environment. So I'd be looking at making Roth IRA contributions. Again, once that emergency fund is built up and you said it's about third full, so we need to get that to three to six months expenses. And then I'd systematically move these mutual funds into a Roth IRA.

You can put in $6,000 for last year up until you file your 2022 return, and then you could do another $6,500 for next year. But in terms of the business fund, I'd go ahead and wipe that out using whichever of these stocks or ETFs is down the least. Let's get that one paid off and then let's focus on getting the rest of it paid off out of your current cash flow. It's enough debt that I would check in with my friends at christiancreditcounselors.org so they could get the interest rate down and you could focus on paying it off quicker. They'll help you get out of debt 80% faster.

I hope that helps you, Sydney. If we can help further along the way, give us a call. This is Faith and Finance Live.

I'm Rob Less. Much more to come around the corner. We'll be right back. Great to have you with us today on Faith and Finance Live. This is where we apply the wisdom from God's Word to your financial decisions and choices. What are you thinking about today?

How can we help you think about moving forward in your financial decisions and apply the wisdom from God's Word? 800-525-7000 is the number to call. Let's head to Spokane, Washington. Hey, Mike. Thanks for calling, sir. Go ahead.

Yeah, hi. Yeah, I have the cash to buy a new car or I was thinking maybe I should lease a car and invest the cash and the car is probably going to be about $65,000. So it's a considerable sum. Yeah, you know, it's not my favorite approach here, Mike, the idea of leasing or essentially renting a vehicle. You're paying to use the vehicle.

You're not building equity in it, of course. There's potential fees at the end if you have excessive wear and tear, not to mention if you don't stay within the mileage. And there's very few options at the end of this thing and you're driving it during the period where it depreciates the most. So I would rather you buy a high quality car that you can afford, buy it for cash and drive it for a long, long time.

And that's going to be the most cost effective way to go. Obviously, that means you're out the cash. I will say most economists are thinking the next couple of years probably are not going to be terribly exciting in the market. We're probably talking about single digit returns.

We're probably entering a period here with some sort of stagflation where the market's going to be more in a sideways type cycle. So I think for all of those reasons, you have the opportunity to buy this car and own it. I would probably do that, negotiate the very best deal that you can. But I'm just not a big fan of leasing.

I just don't think it's cost effective unless you're doing it for business purposes or that type of thing. Could I ask you one more quick question? On the I-bond purchase, on those I-bonds, do you have to keep those for five years in order to accrue the maximum interest on your principal? You don't, no. Well, yes, to get the maximum, the reason being if you redeem it in less than five years, you're going to pay a penalty worth three months of interest. But that three months of penalty is going to be whether you take it out after a year, you'll pay the same three month penalty if you take it out after three years. So that'd be the only reason why you're not going to get as much if you keep it in there for five. But you don't have to keep it in for five by any means. As long as you wait at least one year, you can get it out or redeem it, which is when the interest is credited.

You will have that three months worth of interest penalty though. Well, thank you so much for all your help and your ministry is really helpful to a lot of people, and especially to myself and my wife. And God bless you guys. Well, thank you, Mike. That's very kind of you. We appreciate you checking in with us today. Let's see, all the lines are full, so let's just keep going. Muncie, Indiana. Hey, Carla, how can I help you?

Yes, Rob, thank you for taking my call. My question is actually regarding our church, not myself individually. Our church is a small country church, but we're a very generous giving church, and we tend to give to people in need quite often. My main question is, how much can a church give to an individual or a family? And we do not expect anything in return. It's a free love gift that we offer to them, but we don't know whether we need to claim anything on taxes or when is the difference between we need to give a 1099 to a recipient.

Yes. So, is this gift, is not any kind of work being done. The courts, and I would always check with your accountant or tax preparer for the church, but my understanding is there's really some requirements for determining if the gift is considered non-taxable to the recipient. So, if there was a service performed, then it's not a gift.

It's got to be spontaneous in nature. It can't be solicited, and there can't be a tax deduction for the donor. So, as long as you meet those requirements, then that should be non-taxable, as far as I'm concerned, and you wouldn't issue what's typically known as a 1099 NEC for non-employment compensation. But again, I think it's always a good idea, Carla, especially if you are doing this regularly, to make sure you check with your tax preparer, just to be sure that, based on what you're specifically doing, that you're doing this the right way. Does that make sense?

Yes, it does. Most of the time, when we find a need within our congregation or someone close to a member of our congregation, we might have a benefit meal or something, and people can give a free will donation, and then we give those proceeds to the recipient or the family in need. We don't expect any kind of work in return for that or service of any kind. It's a simple, complete love gift that we give to them. We've had some conflicting information come in, and we want to be compliant, obviously, but we also don't want to be limited to give a person in need, you know, just $600, and not be able to give them more if more was actually donated.

Yeah, I think that's right, and I think that's the key. Obviously, there's changes in the rules along the way, so that's probably why it's always a good idea to get assistance from your counsel, the person preparing your returns, and so forth. Generally speaking, I think those guidelines, if you're following them, those would be considered non-taxable gifts. Again, spontaneous, not solicited, no tax deduction for the donor, not for a service performed.

Those would be kind of the general guidelines that have been established from prior court cases, but I'd probably run this one, Carla, by your CPA and just make sure you all are on the same page with regard to how and what conditions need to be met for this not to be considered taxable. We appreciate your generous heart there as a church and for your leadership in it. Thanks for checking with us today, and we hope you all continue to do this in the name of the Lord.

I'm sure it's a real blessing to folks. Thanks for calling. We'll be right back on Faith and Finance Live.

A lot more to come just around the corner. Thanks for joining us today on Faith and Finance Live. I'm Rob West. We've got two lines open, 800-525-7000. Before we head back to the phones, let me just invite you to be a financial supporter of the ministry here at FaithFi.

It's the last day of the month, which means that we want to stay on track and meet our own goals and budget, and you can help us do that. Everything we do here at FaithFi for this radio broadcast, for our app and website and coaches and CKAs, it's all as a result of your listener support. So if you've found this ministry to be helpful, maybe this broadcast is an encouragement to you, or you've found some wisdom from God's word that you've been able to apply and you'd like to support this work so that others can benefit from what the Lord has for them, we'd love to hear from you, either as a one-time giver or perhaps a monthly supporter of the ministry. You can do that quickly and securely online at FaithFi.com. That's FaithFi.com. Just click Give. You'll find a way to give over the phone, through the mail, or securely online. Again, FaithFi.com.

Well, not slash, but click Give. Thanks in advance. All right, let's head back to the phones to Indianapolis. We go, hi Mary, thank you for calling. Go ahead.

Good afternoon. I have another I-Bond related question. I have a traditional IRA, about let's say $350,000, very conservative, risk averse, and that's been fine over the past few years. But given inflation rates, I'm beginning to worry a little bit and didn't know if it would be reasonable at all to take money out early and put it into an I-Bond.

You know, I probably wouldn't, Mary. The reason is, I mean, it's going to be a very small percent of a $350,000 portfolio, given that you can only put in $10,000, number one. Number two, you would have to take a distribution, so you'd have to pay tax on it first because the money in an IRA can't go into the I-Bond, so it would have to come out. And I like the I-Bonds for the time horizon of maybe one to three years. I don't like it for money where you'd need it in less than a year because you can't get to it in less than a year with an I-Bond.

You're going to be locked in for 12 months. I don't like it for money over three years and especially over five years because I think these I-Bond rates are going to revert back to where they've been historically as the Fed really fights to get inflation under control and as close to their 2% target as possible. And as a result, and we've already seen inflation start to come down pretty dramatically, I think we're going to see this rate step down pretty quickly as we get the new rate based on the consumer price index next in May and then again in November of this year.

And so I think what you're going to find is that beyond 12 months and certainly 24 months, you're not going to be very impressed with the rate that you're getting. So for that reason, if this is money that has a time horizon of over three years and certainly over five, I'd rather you leave it right where it is. And I realize it's not exciting to watch it go down like it has over the last year, but I think this market will recover ahead of the economy.

Could we have another leg down here? Sure, absolutely, depending on how deep this recession is. But there's literally trillions of dollars on the sideline ready to pour into this market. And although we have some headwinds longer term here in this country that we're going to have to address, I think the relatively near term over the next decade still looks pretty good for stocks and bonds. And I think we will get out of this and move to higher ground.

So I think you're better served in a properly diversified stock and bond portfolio than you would be trying to pull a very small amount of this portfolio out just to chase a return that is pretty attractive right now. But I don't think it'll stay that way for long. Does that make sense? Yes, it does. Thank you very much. Okay. Thank you, Mary. We appreciate you calling today.

Eight hundred five two five seven thousand to Salem, Missouri. Hi, Patricia. Go right ahead.

Hi, Rob. Thanks for your program. It's really very helpful. My particular question is about my IRA. And it's it's with Capital Group American funds. And it's been doing well, except, of course, the last year it's lost some money, of course. And I'm just wondering, should I if I have like fifty five percent in mutual funds, about thirty five percent in bonds and ten percent in money market, should I switch those around?

Do you think I am already in retirement? So I don't you know, I just it's just kind of scary to lose any more money. It's you know, it's been a good performer, except, of course, for the last year. It's lost twenty three grand. And so.

Yeah. How much do you have in the portfolio? Oh, yeah, it's only it started the first of the year in twenty twenty two at one ninety nearly one ninety three. And it's it lost about twenty three grand this past year.

So it's down to like 160. Sure. You said you're seventy five and retired. Give me the quick breakdown again of the allocation. Yeah, mutual funds about fifty five percent bonds, about thirty six percent and money market nine percent.

OK. Yeah. So, you know, typically we'd probably have that flipped. I mean, at seventy five years old, you know, you would probably want to have about thirty five percent in stocks and, you know, about fifty five percent or so in bonds, maybe up to sixty five.

And then you've got your cash portion there as well, which you could have in the portfolio or separate from the portfolio. But I think in either case, you know, this is probably a little more aggressive and usually you don't kind of realize that while everything's going really well until you kind of get into a period like we had this last year where you begin to think, man, maybe I'm a little too aggressive. I'm not sure I can stomach this volatility.

And if we start to lose sleep or you get a little anxious, I think, you know, that's a telltale sign. So let's say, Patricia, we agreed that, OK, we've got this allocation flipped. The question then is, how do we get from where we are today to what might be a more appropriate allocation for you moving forward so that, you know, regardless of what happens in the economy in the next decade where we have another, you know, long term secular bull market or we have some challenges along the way that you really are positioned appropriately. And that's going to come down to would it be better to wait this out if you can and are comfortable doing that until it recovers all or most of what you've lost in unrealized losses and then make it, you know, the change at that point or whether you're saying, listen, if we were to have another kind of down leg here because of the recession this year, that most economists are expecting is a little deeper than we expect.

I don't think I can stomach that. So I need to go and make that move now. Or no, I think as long as I know that in the next 12 to 18 months, I expect this market to recover. I'm willing to wait this out and I know that once it recovers, that's the time that I'm going to move to that, you know, more conservative allocation.

I think those are the two options, which feels like it would be best for you. Right. Yeah. Well, that was what I was kind of concerned about. The economists are kind of saying, you know, we might go into a more deeper recession and that's kind of scary, you know?

But yeah, I see your point. And I guess I could talk even to my financial advisor and see what she has to say. I think that would be a good idea. I mean, keep in mind, you're 75, but if the Lord tarries and you're in good health, Patricia, you might need this money to last another 20 years. So we're still looking long term, even at 75 years old. And even if we got into a recession that was a little bit deeper, I mean, typically these last, you know, 6, 12, 18 months. And so, you know, you could, again, look at this as, okay, I'm not happy that it's down, but I want to give it time to recover, but I'm ready with my advisor to start moving to something that's more conservative, that's more appropriate for my age and risk tolerance when that time comes.

So you have that conversation. If we can help further, give us a call back. Much more to come on Faith and Finance Live. Stay with us. We'll be right back. So great to have you with us today on Faith and Finance Live. I'm Rob West, your host. Hey, a quick email before we head back to the phones.

This one comes to us from Emily. By the way, if you have a question you'd like read on the air, we'd love to hear from you. Send it along to askrob.faithfi.com.

That's askrob.faithfi.com. Emily writes, I'm employed and currently receiving Social Security income. I tithe on my salary.

Should I also tithe on my Social Security income? I love your program and listen at work. Thanks.

And Emily, thanks for this question. Clearly you're wanting to be a generous sower, be faithful in your giving to the Lord, and I appreciate that. Here's my perspective. First of all, the tithe is a great beginning point for our giving. We're no longer under the law of Moses, and yet I think we should give proportionately. We see that in the New Testament for sure.

We should give sacrificially. And so starting with this idea that we would recognize God's ownership and give in proportion to our income, the tithe is a great principle to apply to that. So you would give in the case of a tithe a tenth of your increase. The question is, is your Social Security increase? If you tithed on your gross income throughout your working life, clearly a portion of what you're getting from Social Security is a return of what you put into the system.

The challenge is it would take an army of CPAs to figure out what portion is yours, what portion was your employer's contribution, because remember they paid half of the FICA tax, and then what portion was the growth that occurred while it was in there. And so I think for that reason, I would probably take the perspective that let's look at anything we received from the Lord as a gracious gift from the Lord, no matter what its source was, whether it's SSI or Social Security or disability or an inheritance or a paycheck, and just say, Lord, I'm going to demonstrate my trust in you as my provider, knowing that your provision is complete. And I want to be partnered with you in giving in proportion to how you prospered me.

That would be the approach that I would take as opposed to trying to figure out what portion falls into which bucket. But at the end of the day, Emily, I realized that the heart behind this is that you want to honor the Lord. And so I would just be on your knees. If you're married, you and your husband just asking the Lord, what would you have me to do? And I think as long as you follow the leading of the Lord, you give cheerfully out as an act of worship.

I don't think the percentage or checking a box is really the most important thing. So hopefully that's helpful to you as you think and pray through this. All right, back to the phones.

We go to Cincinnati, Ohio, WCRF. Casey Jo, thanks for calling. Go ahead.

Hi, thank you for having me on the air. I was curious. We just received some inheritance money of $65,000 and my husband and I are not agreeing yet what to do with it, but he feels very strongly that we should find a good way to invest it. And I still see some opportunities where we could use it to pay off some of our debt. So what is your perspective? So you're going to make me pick between you and your husband. I see how it is.

Well, I do and I want him to hear some options or another perspective. That's great. All right.

So a couple of questions. So you said you got a $65,000 inheritance. What do you all have in the way of debt? So we have my car that's about $12,000 and we have obviously our mortgage. We just bought our first home last month. And then I have about $5,000 left on my student loans, which I could pay, you know, off very easily here soon.

But that is all of our, like, you know, our major debt other than our monthly expenses. Gotcha. Okay. And are you all putting anything away toward retirement currently?

Yes. My husband is. He is, you know, full time. I'm a freelance worker, so I have a Roth IRA. That is something actually he brought up that he would like to, you know, use it, you know, set up another sort of retirement for me. So I think all of it sounds good.

I just, I see so many opportunities. So yeah, no, I think that's good. And do you know what percent of his income he's putting toward retirement? He's doing the top, like the most percentage that he can.

And then they're matching it, of course. Yeah. Nice.

Okay. And last question, what do you all have left over at the end of the month after all the bills are paid and the retirement contribution and the payments on the mortgage and the car and the student loans? We have about, when you look at it for a month total, there's a little over a thousand left over. I get paid, you know, obviously like sporadically, but on average, you know, that is like what we would have left over. Yeah.

Very good. And I said it was the last question, but I have one more. Do you have an emergency fund? We do. It's pretty small. I mean, we keep it at like, we easily can keep it at a thousand. I mean, sometimes it goes up to 3000, but yeah, but we really, that has really helped us over the last few years just having that for like car expenses and how many, I mean, that really helped us get out of like major dependency on credit cards. That's huge. Well, here's the thing.

I mean, the both of these are great options, right? So as you think about putting money aside that you can grow and compound, you guys are young, so this money would have a great opportunity to work for you over a long period of time. That's a great thing. Paying down debt is another great thing. I mean, being unencumbered is a good thing. You know, Bible doesn't speak very fondly of debt.

It's not a sin to have it, but the borrower is servant to the lender. So there's some peace of mind that comes with that, some flexibility. We're no longer presuming upon the future. And especially right now with interest rates up, we're not paying high interest, you know, debt.

So, you know, especially with the car and the student loans, being able to wipe that out would be great, which frees up more margin that you could maybe get that $1,000 a month up to $1,500 or more per month that you could use for additional giving or additional saving, you know, whatever you have there. So it's really going to come down to, I think, a values conversation first. I think for you and your husband to sit down and say, let's just take a step back. What's important to us as a family? What do we want to be known for?

What's God doing in our lives? How do we want to approach debt? What do we want to do with our giving? How much is enough for our saving and what do we ultimately want to accumulate down the road?

And, you know, begin to talk about it in that light. So this is not a do we pay down debt or do we save and invest? It really is a bigger, deeper question about who are we and what's God doing and what's important to us and how can money as a tool reflect that? And I think what you might come out of that with is to say, well, let's do both. Let's start by shoring up our emergency fund because we really value having that flexibility and, you know, being able to deal with the unexpected. So let's bump that up to three months expenses. And, you know, we want to be debt free over time, but we don't want to, you know, go crazy with that. So, you know, maybe we're going to continue to pay on our mortgage and try to send an extra payment a year out of current cash flow at a minimum. So that 30 year becomes 25 years. But with the student loans in the car, we're going to wipe that out because that's going to get us out of debt.

It's a little bit higher interest. It's going to free up more margin on a monthly basis. And with the rest of it, we're going to fully fund some Roth IRAs. Maybe you have one for you and him, even though he's participating at work, he can have a Roth too. And until you file your 2022 return, you could put in 6,500 for each of you, 13,000 in two Roths for last year.

And then you could do another 6,500 each for this year. You know, so between the two, you could end up with 12,500 each or 25,000 going into a Roth IRAs. And so now all of a sudden we've done things that reflect kind of where God has taken you and each of you has had some input in that. You guys have less debt now, you've got a fully funded emergency fund, you've got two fully funded Roth IRAs for two calendar years, and he's contributing to his Roth IRA. And now all of a sudden we've taken a really good financial situation and we've really strengthened our financial foundation under us. That feels really good to me, but at the end of the day, I don't think there's a wrong decision here.

As long as you guys pray through it and talk through it together and approach it from a values perspective and then make a decision, even if you decided at the end of the day to say, we're going to just keep all the debt and pay on it on the scheduled basis and we're going to invest a hundred percent, that wouldn't be a wrong decision. It's just that I think, you know, being able to do multiple things is perhaps a better approach. But give me your thoughts on that. Yeah, I absolutely love that perspective. And, you know, obviously approaching it first with prayer, like, we haven't really done that yet. So that's, of course, wonderful. And just seeing all the, like you said, like all those opportunities and things that really reflect our values, you know, that would honor God, you know, when it's and not just, you know, oh, well, we've got all this money, we have to invest all of it. You know, I think that, I mean, we'll pray through it, but I think that is such an excellent perspective.

Yeah. And I think the heart behind it, Casey Jo, is not to say, well, you know, if we choose not to pay off the debt, then we're not taking God's approach. I mean, I'm not saying that at all. What I am saying is let's just start forget the decision about the 65K. Let's start with what do we want to be known as as a family? And if all this belongs to God and we're his stewards of our income and the 65,000 and our emergency fund and money is a tool to accomplish God's purposes first so we can be a part of his generosity story and then to provide for ourselves and live with contentment and try to avoid debt. I mean, these are all the things that we want, you know, as hallmarks of our life. Then how do we honor those in an appropriate way as we make these decisions, recognizing there's not a right or wrong answer.

You're not going to find the answer to this, you know, in chapter and verse in God's word. So we we get to live within the tension. And when we do that, it actually grows our faith journey because we're wrestling through it and we're asking God and we're working together with our spouse. And then we come out the other side and say, OK, we got a plan and we feel really good about it and let's go. And then, you know, that's just going to help you all grow closer together. And I think it will mature you in your faith with Christ. That's at least my hope and prayer.

But hopefully that's been an encouragement to you. We appreciate you checking in with us today. And if you want to call us back and let us know how it turns out.

All right. Hey, by the way, Casey, just stay on the line. I want to send you a book called Money and Marriage God's Way. I think that would be an encouragement to you and your husband. Maybe you guys could work through that a chapter at a time over the next six months or so.

And I think it will just help you understand God's heart as it relates to your marriage. We appreciate your call today. Julie Paula Bridget, I apologize.

Sometimes I get long winded and I get all into a question and then I don't get to take as many as I want. So I'd love to get you guys on another broadcast, perhaps tomorrow. But thank you for your time today and for trying to get on the program.

I'm sorry we didn't get to you. Hey, I couldn't do this without my amazing team. So let me say thanks to our phone screener today, Gabby T. Amy Rios producing today. Dan Anderson was engineering and couldn't do this without Robert Sutherland providing great support to me. Thank you for being here as well.

Faith in Finance Live is a partnership between FaithFi and Moody Radio. Hope you'll come back and join us tomorrow. I'll see you then. Bye-bye.