If you enjoy this podcast, you're going to love all the many different resources waiting for you at FaithFy.com and the Faith By app. You'll find powerful wisdom, free podcasts, articles, videos, and more from leading voices such as Randy Alcorn, Howard Dayton, Ron Blue, and our own Rob West. Grow in wisdom and knowledge by connecting with a community of thousands of Christians striving to be good and faithful stewards at faithby.com or by downloading the Faith By app. When should we start teaching our kids about money? Hi, I'm Rob West.
It's a common question, but the answer depends on what you're teaching and when your child is ready. One thing's for sure, it's never too early to start. Today I'll share age-appropriate lessons to help your kids become wise and faithful stewards. And then it's on to your calls at 800-525-7000. This is Faith in Finance, biblical wisdom for your financial journey.
Many parents have heard Proverbs 22, 6, train up a child in the way he should go. Even when he is old, he will not depart from it. That includes training children to understand God's design for managing money with wisdom, generosity, and purpose. But here's something that might shock you: a study cited from Purdue University found that many of our lifelong money habits are already set by age seven. That's a sobering thought.
By the time your child is tying their own shoes, they're also forming beliefs about spending, saving, and giving.
So the earlier you start, the better. Even children as young as three to five can learn that buying something requires money and that money is earned through hard work. This is the foundation for everything that follows. Start teaching the difference between needs and wants. A house, clothing, and food are needs.
That cereal with a cartoon character on the box, that's a want and a great Conversation starter. As you shop, ask your child to name which items are needs and which are wants. Then remind them that God provides what we need and blesses us with more than we deserve. It's also a good time to begin using the three-jar method. One jar for spending, one for saving, and one for giving.
When your child gets birthday money or even a small allowance, help them divide it. Then let them drop their giving portion into the offering plate each week. That simple act connects their generosity to worship. As children grow up to ages 6 to 10, they can handle more responsibility. Give them small chores tied to a modest allowance.
If they complete the job, they earn the money. If not, the allowance waits. This teaches accountability and work ethic. Introduce short-term savings goals too. If they want something that costs more than they have, help them calculate how many weeks it will take to save for it.
A sticker chart or tracker can help them visualize progress. Budgeting also comes into play. Give them a few dollars and let them plan how to spend it on snacks for the week. This helps them see what the author Ron Blue often says. You always have more choices than money.
Keep reinforcing generosity as well. Encourage them to give to causes they care about. Ask why they want to give and help them see how giving reflects God's heart. Between the ages of 11 and 15, children may start babysitting, mowing lawns, or performing other tasks for neighbors. Help them set larger savings goals, maybe for a bike or a special trip.
Consider opening a custodial savings account or using a kid-friendly money app. Walk through statements with them and celebrate their milestones. Let them manage more of their money and make decisions. Both wise and not so wise.
so wise while you're still there to guide them. This is a good time to introduce the concept of delayed gratification. If they want to buy something online, encourage them to wait a few days, compare options, and pray before making a purchase. The lesson? Patience often leads to better decisions.
When your child gets to between 16 and 18 years old, they are often in the time of their life when they're working part-time jobs. That opens new doors.
Now's the time to build a formal budget with income and categories for saving, spending, and giving. Saving for a car or college creates a vision for the future. Considering offering a savings match. If they save $500, you match it. This models how a 401k match might work later in life.
Introduce the basics of investing too. Let them research a company and buy a fractional share through a custodial account. Remind them that investing is long-term. Markets rise and fall, but faithfulness builds wealth over time. If they've earned Enough income, you might even open a Roth IRA.
This is also when they begin to understand the connection between money and trust. Reinforce that their worth isn't tied to their net worth, and that all we have is a gift from God to be managed for His glory. No matter your child's age, the goal is the same: to raise a faithful steward who knows how to earn, manage, give, and grow what God provides. You don't have to be perfect. You just have to be present.
Keep the conversation going and don't forget, this is more than just a financial lesson. It's a spiritual one too. We want them to have financial literacy, but we also want them to understand God's heart, to understand the counsel of Scripture, that they're stewards, he's the owner, and everything we have is to be managed faithfully for his glory and his purposes. Hey, your calls are next, 800-525-7000. We are grateful for support from Crossmark Global Investments.
They are a faith-based firm with a goal of offering values-based investments to help align financial choices and faith, ensuring a portfolio that reflects what matters most. Crossmark does this through investment solutions that span the capital market spectrum from large cap to small cap strategies, including equity, fixed income, and balance strategies. They are led by industry veteran Bob Dahl, CFA, a regular guest on the Faith and Finance program. More information is available at CrossmarkGlobal.com. Wondering who Faith and Finance recommends as a banking partner that aligns with Christian values?
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Each account is insured up at $200. $150,000. This institution is not federally insured. Great to have you with us today on Faith and Finance. I'm Rob West.
We're taking your calls and questions. We've got some room for you. Lines are open for your questions at 800-525-7000. Again, that number, 800-525-7000. You can call right now.
Let's go to Indianapolis and welcome Jackie. Go right ahead. Hi, Rob. Thank you for taking my question. I'll just give you a quick rundown.
I'm 58. I'm single. Um my plan is to work until I'm seventy, at least full time, if not past that or part time. And I've struggled in the past, but I listen to your show every day and I have gotten myself to a good spot. My only consumer debt is my house.
And I think it's It's set to be paid off in 10 years, but I always get on my amortization schedule and see. What I can do to pay it off sooner. And I contribute to my 401k 10% every month. I contribute to an emergency fund, $65 a week, which doesn't sound like much, but over the last year, I've. saved almost $4,000.
I have four kids that I would like to leave everything to if and when I pass away. I looked into a trust and I had a friend of mine who's an attorney refer me to somebody that he trusts. It varies depending on how complicated your situation is, and mine's fairly simple. But it would be about $2,000. And that's a lot to me.
That's about half of what I contribute to my emergency fund. You know, my emergency fund is not three to six months right now, and so I. I think about this every time I listen to your show, which is every day. At what point does it make sense for me to? direct money towards creating a trust.
so that my kids are are in better shape you know, when I pass away. I have three who are grown and on with their careers and perfectly independent. And I have one still at home who's a high schooler.
So, it's for someone like me who I don't make a lot, but I live really frugally and I try to manage my money really well, it's hard for me to think about. spending $2,000 on a trust.
So I was wondering what you thought about that.
Well, it's a great question, Jackie, and it sounds like you're doing a wonderful job. I appreciate you listening regularly, and you're making great progress and getting your financial foundation in place and honoring God as a steward of his resources. What is the primary objective? What is it you're looking to accomplish with the trust specifically if you have something in mind versus just having an up-to-date will and beneficiary designations? Good question.
Because I don't completely understand the process of when you pass away. I've heard you talk about the different things that can happen. My four children, one still being a teenager, are wonderful people.
So I know if I passed away, I've made it clear to all three of the older ones. Hey, when I pass away, everything and anything that Is an asset, please divide equally between the four of you. And I know that they would. I 100% trust that they would. The younger one obviously is not qualified to have money right now.
I can't afford to send my youngest to college.
So we're just going to do our best to do scholarships and all those things. You know, I don't know. And because I'm so behind, because I started so behind. I think that if I continue working and saving in my 401k, by the time I'm 70, I might have $150,000. I really want to have my house paid off before then so that whatever I have, I live as frugally as possible and I can make it.
So, I guess, in answer to your question, the trust is just to keep it out of the courts and just keep it private and for my kids to have. as little hassle as possible. And then have it have it all safe. Yeah.
Well, that's helpful. I mean, I think there's not really any difference in terms of a safety issue. It really does come out down to the things you said. Number one, if you didn't want any of the assets to go right to the heirs at your death and you wanted them to be distributed over time or based on them reaching certain ages, then that's where a trust really shines because the trustee could, you know, based on the trust documents, manage the trust and then distribute based on the language you set up inside the trust. Second, it doesn't go through probate, which you mentioned.
And third, it is private.
So it does accomplish a few of those things you're looking for, but it's not really any safer because with a will, basically it would be less expensive. The will says who gets your stuff when you die, but it does go through probate, which takes, you know, will have some cost to it and take some time. But to your point, you've got other priorities. And so I think, you know, at a minimum, I would say if you You have an up-to-date will and you have beneficiary designations in place, meaning for any accounts like a retirement account or a bank account where it allows you to name a beneficiary, you know, those things are going to pass outside of probate. And I would say for most people, funding retirement and building savings comes first.
And a trust can wait until you have more, a more complex estate need. You know, if you had special needs children or significant assets, it would be a no-brainer. Minor children is a factor, although, with a will going to a minor child, you know, basically the court would appoint a guardian of the property to manage the money until the child turns either 18 or 21, depending on the state. But that means court oversight and paperwork and some limited investment choices. And then when the child reaches legal age, they would get full control.
So a trust is better, but not absolutely necessary.
So I would say if you really have a conviction around getting those other pieces in place, I don't think there's Any problem as long as you have an up-to-date will and beneficiary designations in place wherever possible. That would cover your needs for now. And then you could always add a trust later when your financial condition or foundation is stronger. Does that make sense? That does make sense.
And the only concern is with my youngest, his father is not responsible with money and he would be the obvious guardian if I passed away. And so what I've thought about doing is just to keep that money from being spent in a way it shouldn't be. Would be to have my beneficiary be my three older children at a third each. And then just tell them and say, hey, it's really a quarter each. I want you guys to save his for him because I do trust them and they would 100% do that if I asked them to.
Is that something that's okay to do? Yeah, I mean, legally it would be their money, but you know, certainly you could do that and just kind of have a side conversation. What might be simpler is just to pick one of them and say, listen, I'm going to allocate his portion to you if you'll set it aside and manage it and pass it over to him when that time comes. The other approach is to go ahead and put that trust in place and, you know, see if you can find somebody. I mean, even a couple of thousand dollars, maybe you could, you know, save up for a few months and maybe you just delay that paying off the home.
I think you're putting an extra 500 a month toward the house.
So maybe you end up paying it off six months later and you take that 500 for the next four months and put it into savings so you can pay for the trust. Because that would allow you to name a trustee, whoever you want, and then you wouldn't have to worry about anybody else controlling that money. But I think either option could work, a will and beneficiary, and then ask one of those children to hang on to the money and give it to the other child at the age of majority, or go ahead and just delay that home. Payoff the accelerated payment and put that in savings and go ahead and get that trust in place. And you'll probably feel a lot better that you've got everything buttoned up at that point.
Jackie, you sound like a wonderful person. Thanks for your call today.
Well, folks, we're up against our next break here. We come back. We've got some great questions coming up. We do have some lines open. We'd love to hear from you.
That number, 800-525-7000. You can call right now. By the way, if you count on this broadcast, it's been an encouragement to you. Maybe you've learned something along the way. We'd invite you to be a Faith Phi partner.
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That's kingdomadvisors.com. Great to have you with us today on Faith and Finance. We've got some lines open. We're taking your calls and questions. The number to call today here in our final segment, 800-525-7,000.
That's 800-525-7,000. Right back to the phones to Ohio. Hi, Jim. How can I help you today, sir? Thanks for taking my call.
This is in regards to the Reverse mortgage? Yes. And so my question is, what percentage is the interest they charge? And along with that, is it does it work like a conventional mortgage that it accrues, if that's the right word, through the life of the loan? Or how does that work?
Yes. Great question.
So the current interest rate today, and they can vary because they're adjustable rates typically. Right. You know, there is such thing as a fixed rate heckum, but typically they're adjustable. And I believe the current rates are about seven and a half percent right now. And so there is a little bit of a premium over kind of the typical rate that you would get, you know, in terms of, you know, what you're getting for a conversional mortgage.
In terms of how that, you know, would play out over time, whatever balance you have is going to be accruing at that rate.
Now, you never have a payment with a reverse mortgage.
So you never have to make a payment, but you can.
So if you ever wanted to pay a portion of it back, you can pay back and that would reduce the amount that it's earning interest, that is earning interest, but you don't have to. And so, and you wouldn't, you would be, you know, Assured that you would never owe more than the house is worth. But if you never borrowed that much, then any equity would be available to you when you move or pass away for your heirs. Right. Well we're in we're debt free.
The mortgages have been paid off for years, but for let's say you want to buy a car. You could use it for that. Oh, absolutely. Because, you know, the most common way people use a reverse mortgage is with the line of credit.
So basically, as long as you have at least typically 50% equity in the house, in your case, you have 100%. You're over 62. Yeah, they'll give you a line of credit and say you can use it however much you want. You'll never have a payment. And then, you know, it often is recalculated each year because, you know, as your home appreciates and as you age, you know, you can typically get more line of credit available to you.
Now, you know, you do want to think about is that the best option for you to buy a car? I mean, it's a depreciating asset.
So if you could afford to have that payment just kind of built into your budget, I don't think that's a bad idea. But again, the beautiful part of that reverse mortgage is if you get to this part of your life and you just don't have the income that you want or need to maintain your lifestyle, this is a way to tap into what is probably. Probably your largest asset, and either supplement your income or just have some additional resources available that you can use for things like other purchases. Yes. Now, is there an initial fee for starting?
We'll call it an account. But is there a fee involved? Yeah, there is. And so the main fee up front is the 2% origination fee that goes to the FHA and the Federal Housing Administration. And here's what that does.
So the key with a reverse mortgage that's different than a forward or conventional mortgage is with a conventional mortgage, you're personally guaranteeing the loan. And so if the house is ever not valuable enough to satisfy the loan, then you have to come out of pocket personally and they'll come after you for it. In the case of reverse, you are not personally guaranteeing it. The Federal Housing Administration is. And so if for some reason your house depreciated or you lived a long time and they paid out more than the house was worth or something like that, any difference between the value of the home and what you owe is covered by FHA.
Well, the way you get that is by paying this 2% origination fee up front, up to $200,000.
So it's capped at $6,000. And then there's also. One other fee, an annual fee of a half a percent, which is the mortgage insurance premium.
So there are some fees involved that you need to factor in, but that's pretty much the extent of it.
Okay. All right.
Well, that's good. Good information. Yeah.
Thank you very much.
Well, you're welcome. And, you know, here's the way I think about this: you know, I love the idea that you're debt-free and you've paid everything off and you're, you know, sitting in a really great spot. And that's awesome. And I think there's nothing wrong with that. In fact, a lot of our listeners, you know, are in that same boat where they say, listen, I want to be debt-free by the time I retire.
And, you know, it feels really good. There's a lot of peace of mind that comes from owning your home outright. The only challenge is if you have not. Been able to save to put yourself into a position where you've got enough income beyond Social Security to maintain your lifestyle, then we're starting to look at things like: all right, do we need to sell the house? Do I need to work part-time?
And often, you know, folks in that season, if you're in that position where you feel like you haven't saved enough, are sitting on high. Hundreds and hundreds of thousands of dollars in home equity.
So, the ability to say, okay, let me look at all the tools at my disposal that could allow me to generate income or pay for things in this season of life. The home is one of those. And so, the ability to have you and your spouse stay in it for the rest of your life, your kids probably don't want it if you have kids. You know, they're just going to sell it anyway.
So, your ability to kind of extract some of that equity to either supplement your income or for certain purchases, I think is at least worth considering as one of the planning tools. We would look at the IRA and say, How much are we going to take it out of that? We would look at an annuity and say, How much is it going to pay us? This is just another one of those tools by looking at your home equity.
So, the reverse mortgage, I think, is something worth considering if you're in that particular position. Hopefully, that helps you, Jim. Thanks for your call, my friend. If you want to learn more about this, just go to movement.com/slash faith and our friends at Movement Mortgage can help you out.
Well, folks, we are about out of time. Today. And boy, I so appreciate you being a part of the program and listening and calling and interacting with us. It's such a privilege to walk alongside you and this really high calling that you have of managing God's money as a wise and faithful steward. You know, we hear from so many of you that call in and say, Man, I love the program, or I was able to apply something, or guess what?
I started listening a couple of years ago, and I want to celebrate with you because my house was just paid off, or I gave out of my balance sheet. I never thought I could do that. I've given more than I ever thought possible. We love to hear those stories.
So please call us with those stories and share those with us along the way because that's an encouragement to our team. I would also say, if you love the program and listen regularly, one of the ways you can help is by becoming a Faith Vi partner. Those are the men and women that support this ministry so we can reach more people and continue to do the work God has called us to. But in addition to that, when you become a partner, we're able to send you some of the resources. That we create specifically to encourage you in your stewardship journey.
Namely, our magazine, Faithful Steward, which I'm holding issue two in my hand. It just came in in the last week. It's beautiful. It's full of incredible articles. And I'd love for you to get it each quarter on top of any new studies or devotionals.
And you also get as a partner pro-subscription to the FaithFi app where you can connect to all your institutions. To become a partner, just go to our website, faithfy.com and click give. Hey, big thanks to Amy, Jim, Dan, and Anthony, and everybody here at FaithFi. Come back and join us tomorrow. We'll see you then.
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