What if managing your money could actually draw you closer to God? The FaithFi app helps you do more than budget. It helps you integrate your faith and financial decisions for the glory of God. With easy-to-use envelope features, top biblical financial content, and a supportive in-app community, you'll learn to steward God's resources wisely and grow in generosity. Download the FaithFi app today from your app store or visit FaithFi.com and click App.
Uh Three words that can make any parent's wallet flinch: back to school. But there's a silver lining, especially if your state has a tax-free weekend. I am Rob West. For families gearing up for a new school year, those tax holidays can make a real difference. Today, Crystal Payne shares smart, practical ways to get prepared and save money along the way.
And then it's on the ear calls at 800-525-7,000. That's 800-525-7,000. This is Faith in Finance, biblical wisdom for your financial journey.
Well, it's always a joy to welcome Crystal Payne back to the program. She's the founder of the popular website moneysavingmom.com and the author of several best-selling books that offer biblical wisdom for managing family finances. Crystal, great to have you back. Thank you so much for having me here again. Oh, we always look forward to it.
Crystal, tax-free weekends have become a popular and much appreciated, I'll say, summer tradition in many states.
So let's start with the basics. What should families know before they head out to shop? The most important thing is: does your area, your state participate in this? Not every state does. The rules vary.
You can check your state's Department of Revenue or the Federation of Tax Administrators for a complete list and really understand the eligible items as well, because every state has different things that qualify. And for instance, some states will limit clothing to under $100. And also, online purchases count as well, as long as the order is placed and paid for during the tax-free window. One of the things that I always tell people, even if you don't need to buy things for back to school, this can be a great opportunity to purchase other items that qualify that you need. Oh, interesting.
And we'll be sure to include a link to the tax administrator site in today's show notes at faithfy.com.
Now, Crystal, once you know your tax-free. Weekend is on the calendar. What's the smartest way to get ready? The biggest thing is to, like I said, know what qualifies and then make a list of what you need to buy. You don't want to just go in and spend a bunch of money because it's a tax-free weekend.
You want to make sure that it's actually stuff that you need to buy. I also encourage you, if you have kids that are, you know, over the age of eight or 10, that you set a budget and involve them. Let them help you make sure that you're sticking with the budget and know what they need to buy as well. And know the cutoff for the item category so you don't go over the price limits and lose the exemption. And also, don't forget to check for coupons or store sales that you can stack with the tax savings.
One of the things I love to do, especially if you're ordering online, is to search for a coupon code. Just Google the name of the site you're going to shop at and the word coupon code, and it will oftentimes pull up a lot of different coupon codes. And then also shop through a cashback site like Retail Me Not to earn cash back for your online purchase. Yeah, and make sure you watch moneysavingmom.com as well. Always A good idea.
All right. You brought up online shopping, Crystal, and that's an area where people often have questions.
So, can you help clear up how it works during a tax-free weekend?
So, in most states, if you order and pay during the holiday window and the item qualifies, it's tax-exempt, even if it ships later.
Now, the item must be shipped to an in-state address, and retailers like Amazon do not participate.
So, again, got to know the eligibility. And some states include shipping in the price cap.
So, be mindful of that when you're checking out and always review your confirmation receipt to ensure tax wasn't mistakenly charged.
Okay, good. Yeah, that's helpful.
Now, these are certainly great ways to save, but saving isn't the ultimate goal.
So, let's talk about just stewardship in general. Crystal, how can we be intentional and honor the Lord through the way we spend? You know, for me, it's really thinking before you purchase something. Am I buying this because it's wise or just because it's discounted? I call it spaving, where you spend to save, where you're spending money thinking.
You're saving money when you actually aren't. And, you know, I really think that it's important that we prioritize, you know, where do we want to be long term? What are our long-term goals and what glorifies God today? And inviting God into the process, even asking him, you know, if I need to purchase something, praying beforehand and asking God, can you help me to find a deal on this or help me to know what I'm supposed to purchase? And he's always so faithful.
That is so true and well said. We've got just about 30 seconds left. What's one thing you're doing in the pain household to get ready for the school year just around the corner?
Well, we always plan ahead. A few weeks before school starts, we actually start the schedule that we're going to have when the school year starts so that it's not just, you know, Monday school starts and we have this brand new schedule. We gear up for it. I love it. Such a good idea.
Well, Crystal, it's always a joy to have you and we appreciate your biblical but practical advice. Thanks for being here. Thanks so much for having me. That's Family Finance. Expert Crystal Payne.
For more information and her practical wisdom and money-saving tips, check out money savingmom.com. That's money savingmom.com. All right, your calls are next: 800-525-7000. This is Faith in Finance, and we're just getting started. Managing money doesn't have to feel overwhelming or disconnected from your faith.
The FaithFy app helps you budget with purpose, combining easy-to-use tools like digital envelopes with biblical wisdom and a Christ-centered community. Whether you're new to stewardship or looking to grow in generosity, the FaithFy app equips you to honor God with every financial decision. Join over 70,000 others and start today by downloading the app from your app store or by visiting FaithFi.com and clicking app. That's FaithFi.com and click app. We are grateful for support from Praxis Investment Management.
Since 1994, Praxis has offered investment products designed to meet practical needs for everyday investors seeking to steward their assets consistent with their desire to promote positive social and environmental impacts. Praxis aims to bring a faith-based approach to ETFs, mutual funds, multi-fund portfolio solutions, and money market accounts, reflecting their 500-year-old Anabaptist Christian faith tradition. More information is available at PraxisInvest.com.
So glad to have you with us today on Faith and Finance. Taking your calls and questions, I've got two lines open: 800-525-7000. Call right now. Let's go to Birmingham, Alabama. Hi, David.
Go ahead, sir. Hey, Rob, thanks very much for taking my call. My question has to do with I'm sixty two years old. I'm still working. I don't plan to retire until sixty five or maybe sixty seven.
Our hospital has just started offering a Roth 403B plan. I was just kind of curious at my age, would that be a I would really like to do that to have a legacy for my son, who's twenty five. I was just wondering, would that be a good idea at my age to begin a Roth 403B basically at zero and start going now? Yeah. Yeah.
Very good. It's a good question. It really comes down to, you know, you've still got some strong earnings years left if you're going to work until full retirement age. If your income is high, the traditional 403B would obviously help to reduce today's taxes. If, though, you can afford to pay the taxes now, the Roth gives you more flexibility later because you don't have to take it out with a required minimum.
So, you know, generally speaking, if you're in a high tax bracket now and expect to be in a lower bracket in retirement, the traditional gives you that tax break today and lets you defer taxes until later. If you're in that moderate or low tax bracket now, then the Roth may be better because your money grows tax-free and you'll pay no taxes on withdrawals during retirement. The other approach to consider is there was a study done by some University of Arizona researchers where they were looking at whether You know, what was the right mix between traditional and Roth? And they were looking at this idea of tax rates changing in the future and just that being an unknown. And they studied this and came up with a rule of thumb that, in their work, produced near-ideal results.
And that rule of thumb is simply to add 20 to your age and put that percentage in a traditional.
So, in your case, that'd be call it 80%, with the rest going into Roth. And they say that the common advice that older workers should be funneling most of their contributions into traditional accounts doesn't consider the risks of tax rates in the future. And that some of, you know, investing some of those contributions, in your case, it would be a fairly small amount into Roth eliminates some of that risk down the road.
So, you know, I think. I would probably skew toward the traditional, even if you decided if you're at the peak of your earning years, you just don't even want to bother with the hassle of opening the Roth and just stick with the traditional. But if you wanted to start to divert some of it, in their case, in the case of these University of Arizona researchers, perhaps as much as 20 to 25%, you know, you certainly could do that. And then you'd have both buckets to pull from down the road, you know, based on which one was better at the time. Does that make sense?
Right. It does. I I appreciate that. Thank you very much. All right.
Thanks, David. We appreciate your call. Let's see. Bowling Brook, Illinois. Hi, Joanna.
Go ahead. Hi, thank you so much for taking my calls. Yes, I just have like a couple of questions because I don't know if this is the best time to sell my house. I live in a A town homes I'm 46 years old, and if I put that on the market, What is the best investment for the equity that I'm getting? Because I'm planning yet just to get an apartment.
For now, after I sell it, Yeah, I think the only question, Joanna, is just, you know, whether you want to stay as a renter long term. Because if you really want to own something and get the appreciation that comes with it and just the ownership where you can pay it off over time and you're not continuing the cycle of renting, then I wouldn't want you to invest that money only to decide, let's say in two or three or four years that you want to buy something. And then let's say the market was down because we're in a recession. I don't know whether we will be or not. Nobody does, but the market or the economy works in cycles and we're kind of long overdue for a recession.
So let's just take the worst case scenario. Let's say three years from now, the market's down 20 or 30 percent. Your investment, the proceeds of your townhome sale, you know, that you invested are down 20 or 30 percent. And you're wanting to buy something, you know, you're going to have to sell it at a loss. And now you don't have as much to work with.
And so I think you need to kind of play this out a little bit longer. Longer term and think about your long-term housing situation and make some decisions before you were to take this money and invest it. Because I wouldn't want you to invest this money unless you felt like you had at least a 10-year time horizon on it. Does that make sense? Hello.
Yeah. So it's it's probably like Uh I can stay a little longer maybe or Yeah, or what about, I mean, what is causing you to feel like you need to sell this and rent? Is it what's driving that decision? Right. Uh good question.
Yeah, uh well I'm nearly I feel like I'm I'm forty-six already and I don't have much um savings on my own and I feel like I needed this so I can start investing more. And then and then put away some money for the emergency fund. And with the situation with the townhomes, the association um fee is getting h um going up. and up and up almost every uh quarterly. Um is this getting tired of some expenses that I have in the townhomes.
Yeah. Yeah. Okay.
Well, it may be that you need to really consider whether this is the right property for you. I totally get that. And with townhomes, you do have some of these common area assessments and homeowners type expenses that are out of your control. It may be that you replace this with a small starter home that doesn't have that. Or maybe you sell it and rent for a period of time, but you don't necessarily invest it.
You just put it away, earn some interest on it, continue to save until you can buy something that fits your budget. Because the goal would be, and this would be true whether you're renting or you own, your goal would be to get your monthly payment for your housing. In the case of the rent, it would just be the rent. In the case of the mortgage, it would be principal, interest, taxes, and insurance. You'd want the goal to be that to be no more than 25% of your take-home pay.
And that's going to give you enough leftover.
So that you can not only cover your bills, put food on the table, gas in the car, pay the utilities, and have some discretionary money for clothes and entertainment and travel, things like that, but you'd also have some surplus, something left at the end of the month to accomplish your goals, beginning with building up and fully funding over time your emergency fund of three to six months' expenses. And then maybe moving beyond that into putting some money into a retirement account, either at work or on your own in something like a Roth IRA. But I don't know that if you ultimately want to be a homeowner, it makes sense for you to take the proceeds of your townhome sale, even if it's the right thing to sell it because it continues, you know, it's too much expense for your budget. I don't know that it makes sense to invest that just because, you know, we may want to use that for another purchase down the road. And if so, we need to make sure the time horizon is right on those investments.
Does that make sense? Right, right, yeah, yeah. Thank you, thank you so much. Yeah, that makes sense. Yeah, and so maybe the answer here is: let's evaluate whether or not this townhome is the right thing for you.
And if it's getting too costly, maybe you're absolutely right. Let's sell it. But I think I'd take whatever equity you have, put it in savings, maybe an online savings account at an online bank. You could get 4% a year on it. And let's then get into a rental that actually fits your budget so you can save for your next purchase and fund retirement.
Thanks for your call.
Well, folks, still a lot more to come here on Faith and Finance.
So be sure to get your calls in. Lines are filling up, but we've got room for you. The number 800-525-7,000. We'll take a quick break and then be back with much more just around the corner. Again, that number 800-525-7,000.
Stay with us. FaithPhi is grateful for support from One Ascent. One Ascent believes that your values inspire why you invest and how they can inspire how you invest. One Ascent's goal is to provide solutions designed for every need and invest in businesses that bless the people and places God has made. They want to help investors do well by doing good.
To explore a new way of investing that aligns with your values, more information is available at onascent.com and by clicking analyze my investments. You're young. You don't go to the doctor that often. Yet health insurance is still so expensive. If your health insurance costs too much, maybe you should switch to an affordable alternative.
Take charge of your healthcare with Christian Healthcare Ministries. CHM offers programs starting under $100 per month. Check off the affordable box on your list and get back to what you really love: running your business or caring for your family. Kids and have peace of mind while doing it. Visit chministries.org/slash faithfy to enroll today.
Great to have you with us today on Faith and Finance. Let's go right back to the phones here in the final segment. We'll get to as many calls as we can. Indiana is where we're headed next. Benjamin, go ahead.
Yeah, I have a loan and my name for a friend of mine. For home improvement. We're not able to make the payments. My mom works in taxes, and I'm wondering about debt forgiveness for the loan. Yeah.
And so what what are you looking to essentially try to to just consider this bad debt. I'm trying to get out of it if possible, I just don't see myself paying for um nine more years. Yeah. Okay.
Yeah, I think that the challenge is you obligated yourself. Did you took this out in your name? Is that right? Correct.
Okay.
Yeah. I mean, so from the let's set the taxes aside for a second. I mean, you know, in terms of you taking out a loan in your name for a friend, obviously the lender is going to look to you for repayment on this, whether or not your friend is able to make the payment. The extent to which you don't pay it, you know, they're going to, you know, that's going to reflect on you poorly in terms of your commitment to do that. Not only that, but also likely trash your credit in the process.
From a tax standpoint, you know, if you loan someone money, which is essentially what you've done, they haven't paid you back, you can claim it as a non-business bad debt on your taxes. You'd want to talk to your CPA about that because there are some strict rules that the IRS requires with regard to clear evidence that it was a loan and you tried to collect. And so that's why you'd want to get a CPA involved. But I think there's kind of two sides of this. Number one, how do you want to navigate it relationally and in terms of whether you Want to try to work with the person to begin to get paid back, even if it's over a longer payback period, with clear communication and a real forthright conversation.
And then the other side is whether you're ready, willing, and able to step in and pay it off so it doesn't come back to harm you. And then are there any potential tax implications to you recouping some of this by way of a bad debt that you could claim on your taxes? Does that make sense? Fact, yes it does.
Now my mom didn't follow taxes, so she told me that there's a way to get debt forgiveness. She sounds pretty sure about that, but we don't talk about it too much because the payments were being made. We have not missed a payment in a year and a half. But the girl I've paid the last five months and she paid the Eight months prior to the last five months. But, you know, she uh lost her job, but she started a new job and um you know, I've been paying it, but Like I said, my mom works in taxes and mentioned as a way for debt forgiveness.
Whether she's done this before or some other clients, I'm not sure, but she mentioned that maybe an option. Yeah, that's not something that's going to be readily available to you. I mean, you know, you could go the debt settlement route. The problem is that depending on, you know, if this is a, what type of loan is this? Is this just like a signature loan from a bank or what is it?
Home including for a furnace and air conditioner.
Okay.
Yeah. So you could contact the lender and let them know the situation and tell them you want to try to negotiate a payoff. Usually they're going to make you get past due and that's going to trash your credit in the meantime. And then the forgiven amount is taxable. Student loans offer forgiveness through the student loan public service loan forgiveness program, but this is not a government student loan.
Medical debt can sometimes be negotiated down and mortgage debt, same thing through a modification, but that's rare.
So I don't think you're going to be able to find any forgiveness options other than you just. You stop paying, but I would question that just with regard to the commitment you made and the obligation you have to pay it by way of you taking out this loan, whether or not you think that was a good idea at this point or not. That's in the past, and there's not really going to be any forgiveness options available to you other than if this gets severely past due, the lender may be willing to try to negotiate a settlement, but that's after there's probably been harm imposed on you through your credit report.
So, the only thing that would then be available is if you pay it off, consider it a bad debt, and can prove that to the IRS, then there may be some tax advantages for you.
So, hopefully, that helps you, Benjamin. I know this is not a great situation, but pray about it. Ask the Lord to give you wisdom, and we appreciate your call today. Thanks for being on the program. Let's head to Mississippi and welcome Cody.
How can I help you? Uh yes, sir. How are you doing? I'm doing great. Wonderful.
Let's show you all the time. Yeah, I just had a question about goldbacks. I've been recently invested in them, and I see more states. Are you joining on? I don't know, I'm sure you're familiar with them, but they're like dollar-size shaped gold, and what your thoughts are on those.
And it's a good idea to invest right now. Yeah, I mean, it's a relatively new form of currency. I mean, they make these with kind of thin layers of gold and embedded in these polymer notes. And, you know, the idea is to serve as a physical spendable currency backed by the intrinsic value of gold.
So the pro is obviously, you know, the intrinsic value.
So it contains a specific amount of physical gold.
So unlike fiat currency, the note itself is backed by a tangible asset. And that's, of course, appealing to a lot of folks. It's a hedge against inflation and currency devaluation. It's very portable.
So, you know, these are lightweight, durable, easy to carry, perhaps better in some cases than larger forms of physical gold. And then it, you know, this polymer backing protects the gold layer.
So it kind of ensures longevity and resistance to wear. They're also very divisible.
So they come in different denominations. Each with a specific amount of gold content. You know, I mentioned that it's an inflation hedge. I mentioned that it's, you know, it's not tied to any government or central bank.
So it's decentralized, it's private.
So it's an alternative currency option. And then they just have some, you know, an intrinsic appeal because they have designed images. And so they're visually appealing to collectors. I mean, the downside would be, though, that they're limited in their acceptance.
So, you know, local businesses are not, you know, widely going to accept these as legal tender.
Some will, but it's not widely accepted. You may pay a premium over the spot price of gold. And that's really when you're just buying gold, it's all about how close to the spot price can you buy it because that premium is you know what you're paying on top of it, that is the profit for the person selling it. Obviously, anytime we're talking gold, there's volatility in the price of gold. They're not, you know, terribly liquid like other forms of owning gold, specifically like ETF.
And then you've got the storage and the handling and so forth.
So I would say at the end of the day, I wouldn't go crazy with these. You know, my typical approach is no more than 10% of your investable assets in gold just because it tends to be more volatile and the long-term performance is not as good as a properly diversified stock and bond portfolio. But I would say it's a fairly innovative and tangible way to have gold in small denominations. If that's what you're solving for, you know, it can be a very effective way to do that. Does that make sense?
It sure certainly does. And I think that that's about where my goal was: about 10%. And it's fun to collect them because, you know, I see the 2019 version going three times their value and their strike price. You know, and it's just like, why? And it's because they're collectible.
So I thought it was kind of a double fun time for me. Absolutely.
Well, I appreciate your call, sir, and all the best to you. Call anytime.
Well, that's going to do it for us today. Thanks to my team today.
So thankful for our call screener today, as well as Dan and Amy and Jim. Couldn't do them without them. Hope you'll come back and join us next time, and we'll do it all over again. Until then, God bless you. Bye-bye.
Faith in Finance is provided by FaithBy and listeners like you. Uh
