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The holidays are meant to be a season of joy, but for many families, they also bring financial stress that lasts long after the decorations come down. Hi, I'm Rob West. Our desire to bless others often leads to spending more than we planned, but it doesn't have to be that way. Today, Neely Simon joins us to share how you can give meaningfully, stay within your means, and refocus on what Christmas is truly about. And then it's on to your calls at 800-525-7000.
This is Faith and Finance, biblical wisdom for your financial decisions.
Well, it's always a pleasure to welcome back Neely Simon, certified credit counselor and director of strategic partnerships at Christian Credit Counselors, one of our longtime valued underwriters here at FaithFi. Neely, really great to have you back. Thank you, Rob. It's great to be here. Neely, as you well know, many people overspend at Christmas with the best of intentions.
They genuinely want to bless others and make them happy. But where do you see that good intention starting to go off the rails for so many families?
So we really do start from a good place. We want to show love and be generous. But sometimes that turns into thinking that we have to spend more to show how much we care. And then you mix in all the holiday sales, the credit card offers at the register and then those tempting buy now, pay later deals on top of all the social media. And before you know it, spending can get out of hand.
And the tough part is the stress from all that shopping time and overspending tends to stick around long after the decorations come down. Yeah, no doubt about it.
So the heart's in the right place, but the habits may need a little more course correction.
So how can families, Neely, create a realistic plan before the holiday season really kicks into gear?
So you start by deciding what you can truly afford. Make sure that you encompass everything that the holiday brings.
So it's gift giving, food, entertaining, and travel. And then set a total budget for your holiday spending. I also tell people to use cash or a debit card whenever possible, because when the money's gone, you're done. And that's okay. If you use credit cards, treat them as a tool, not the enemy.
They can help you track spending when used wisely. And then just remember, at the end of the day, a budget isn't about restriction. It's about peace of mind. It gives you the freedom to enjoy the season without the stress that can follow in January. I love that perspective, seeing budgeting as a path to freedom rather than restriction.
So when it comes to giving, how can families keep it meaningful while still staying within the healthy limits?
So the best gifts are personal. They don't have to be pricey. Handwritten notes are always something that's well-received. You can do baked goods. And what's important really is that you're having wonderful shared experiences.
In our family, we keep it simple and fun by setting a spending limit and doing the white elephant exchange instead of having to buy something for everyone. It takes the pressure off and turns gift giving into a shared experience full of laughter and memories.
So focus on the togetherness over things. That's what people really remember. There's no doubt about that.
So Neely, for families already dealing with debt, what encouragement would you offer to help them celebrate Christmas without adding to that burden? Give within your means, even if that means scaling back. Because when you give responsibly, you protect your finances and your peace. Think of it this way. A relaxed, stress-free January is way better than stressing out after overspending in December.
And remember, you're also setting a good example, modeling stewardship and faith for your children. Neely, I'd love for you to finish today by just refocusing us on the true meaning of Christmas amid all the spending and celebration. Christmas is a celebration of Jesus, the greatest gift ever given. When we center our hearts on him, love and grace becomes the focus. Giving within our means allows us to enjoy the season with joy and gratitude.
Yeah, that's well said. You know, folks, when we spend within our means and focus on Christ, the greatest gift, we find true peace and joy that lasts long after the season ends. Neely, great to have you here. Thank you so much. Our guest today has been Neely Simon, certified credit counselor and director of strategic partnerships at Christian Credit Counselors.
Folks, if you feel weighed down by credit card or consumer debt, Christian Credit Counselors can help. As a nonprofit ministry, they specialize in debt management, not consolidation, working directly with your creditors to reduce interest rates and clear the path toward freedom. Just go to ChristianCreditCounselors.org slash FaithFi, ChristianCreditCounselors.org slash FaithFi. We'll be right back. Faith and Finance is a listener-supported program, and right now I'm excited to announce that your gift to FaithFi will go twice as far.
Thanks to generous donors, every donation made before December 31st will be matched dollar for dollar. That means your gift goes twice as far to help families manage God money God way and treasure what truly lasts But the match ends soon so consider joining us Visit faithfi slash give today Are you feeling overwhelmed by credit card debt? As followers of Christ, we are called to be good stewards of what God has given us. That's why our trusted partner, Christian Credit Counselors, is here to help. Their debt management program can help you pay off your debt 80% faster while honoring your commitments in full.
Take the first step toward financial freedom today. Visit christiancreditcounselors.org or call 800-557-1985. I'm so glad to have you with us today on Faith and Finance, helping you see God as your ultimate treasure and money a tool to accomplish God's purposes. Do you have a question today in your financial life?
Well, we've got lines open. we're ready for you. We'd love to take your call at 800-525-7000. We've got, it looks like four lines open right now, 800-525-7000. Whatever is on your mind today, whether it's your lifestyle and your budget, maybe it's the best way to pay off debt.
Maybe you're struggling with that credit score. You're getting ready to buy a house or get a car loan and it's concerning you. Maybe you want to give wisely, especially this time of year. And maybe you want to do a qualified charitable distribution out of your IRA.
Well, any of those topics and more, we'd love to chat with you about. The number 800-525-7000. You can call right now. Let's begin today in South Carolina. Nick, go ahead.
Hey, Rob. Thanks for taking my call. You had given me advice on refi versus HELOC, and you had recommended the HELOC over the refi. I just wanted to give you a little bit more specifics about my situation here and see if we can come up with the same advice. All right.
Number one, I'm a retired veteran, 84 years old and excellent health. My wife is 81 years old. She's an excellent health. We own our own home and we have a $375,000 mortgage on that home. And its estimated value of our home is between 3.2 and 3.4 million.
So we have a lot of equity. We have a portfolio of $140,000 in three accounts. I have a 529 college fund set up. That's 55K. And I've got about $100,000 in gold jewelry.
I also receive $40,000 a year in Social Security. And we have about $15,000 in credit card debt with one card.
Okay.
Okay.
That was a pretty good list there.
Well, they should be succinct and pithy.
Well, you're checking all the boxes so far, Nick. I like it. Keep going.
Okay.
So my question is, we're getting pretty close to running out of money here, and I needed some advice as to where we could possibly delve into the equity of our home. And I called the VA up, and they had told me that they could give me a VA loan, being that I'm a veteran, and it would be $400,000 in addition to the mortgage that I have now. and that would be at 6%. That would be a fixed rate 30-year and it would amount to about $4,249 per month. I love the VA, but they don't do a HELOC, unfortunately.
And so if you're recommending the HELOC, I would have to go elsewhere and I'm kind of in a quandary as to where to turn to tap into that HELOC situation. Yeah, yeah, good question. Yeah, you're what we call house rich and cash poor, right? in the sense that you've got a lot of your net worth tied up in the home, plenty of equity, but very little liquid cash to cover day-to-day expenses. You know, this is probably a prime situation just given your health, and it sounds like that you don't want to go anywhere, and you've got all this equity in this home, and very little just to cover your day-to-day obligations.
I mean, there's no reason with your net worth for you to have any credit card debt paying any interest at all. The problem is it's all illiquid.
So, you know, I would recommend not just a traditional home equity line of credit because that's just going to require you add a payment to this mix, even though you're going to be able to tap into it. I'd probably go with the reverse mortgage where you'd get a home equity conversion mortgage.
Now, all of a sudden, the payment is optional and you could get it either as a monthly cash flow for the rest of your life, which, by the way, might increase over time as the house appreciates. or through the same line of credit. But again, now you never have a payment. It's optional. And so you can tap into that equity as long as you need.
Yes, whatever balance is outstanding would grow with interest and fees, and it would be variable moving with the prevailing rates. But the key is you don't have that mortgage payment, which in your situation I think is pretty important. And whatever equity is used over the rest of your life and your wife's, whichever one of you dies last, then the home would be sold unless your heirs wanted to refinance it. The home would be sold. Whatever outstanding balance would have to be paid.
And then everything else is available for your heirs or for ministry. But I think the key on that home equity conversion mortgage is you're tapping into that equity tax-free because it's your money. It's just tied up in the house. And the payments are optional, which I think is a game changer for you. But give me your thoughts.
Okay.
So let me make sure the word reverse mortgage kind of has a darkness to it that I've experienced other people having problems with it. But that was one of the options. And I was going to bring it up to you, but you absolutely were on spot there.
So what I'm looking to do is what is the full name? Is it just reverse mortgage? You said a couple other adjectives in there. Yeah, it's known as a reverse mortgage, but it's technically a HECM, a home equity conversion mortgage. And the difference between the home equity conversion mortgage and the reverse mortgages that got a bad rap you know 20 years ago for good reason is they very different in that number one it not there it a non loan So like unlike other mortgages where you personally guaranteeing it if the home equity doesn satisfy it that not the case with a home equity conversion mortgage If for some reason they paid you out more than your home was worth because all of a sudden your home lost value for some reason, we're hypothesizing here, the Federal Housing Administration is going to pay the difference.
The other thing is you and your wife are able to stay there as long as you live. and if your wife's going to be on the mortgage too.
So if something happens to you first, which is what happens with most guys, she can live there as long as she wants.
Now, if she moves, she'll sell it, she'll pay it off, but she can live there as long as she wants. And then your family will, or whoever's your executor, will have plenty of time to settle the estate and get the mortgage paid after you both pass away, assuming you stay there until you die. And usually people will get a line of credit where you can access however much you want, usually up to about 50%. You'd probably be able to get a little more than 50% of the home equity given your age, or you can get a monthly check. And then whatever you use, the payment is never required, always optional.
So if you never pay in a penalty, a penny is what I'm trying to get at, then that balance would grow over time and then have to be settled at your death. But what other questions do you have, Nick?
Well, this home equity conversion mortgage certainly appeals to me. And you really encapsulated the whole program right in front of me here. And thank you for that. Where do I go to get more information on this conversion mortgage? Yeah, two things.
I'm going to send you a book called Home Equity and Conversion Mortgages that I think will shed some light on it. And it's by my friend Harlan Akala. He's kind of our go-to guy on this. He loves Jesus. He's with Movement Mortgage, which is a Christian nationwide mortgage company, but he runs the division inside Movement on reverse mortgages.
And he'd be delighted to chat with you and kind of go over all the ins and the outs. He kind of leads with education, which is why, you know, we have him on so often, just because, you know, his point is so often people have a misunderstanding of what these products are, and he just loves to educate God's people on it.
So if you'd like to connect yourself, you could go to movement.com slash faith. Otherwise, when you give your info to our team to get the book sent to you as our gift, if you just want them to have him reach out to you, they can make that connection as well. All right. Well, movement.com.faith. And shall I just wait to hear from you people?
Will you? No, I'm going to have you hold the line right now. They'll pick it back up and get your info. but one correction, movement.com slash faith is the place to go. But they'll get your information right here.
Hey, Nick, thanks for your service to our country, sir. Oh, thank you. And Rob, you guys do a blessed job, and God bless you for it. I listen to you every day. You're wonderful.
Well, thank you, Nick. Lord bless you, sir, as well. A quick break and back with more questions after this, 800-525-7000. We'll be right back. We'll see you next time.
is available at oneascent.com and by clicking Analyze My Investments. Faith and Finance is grateful for support from Sound Mind Investing. For more than 30 years, they've offered financial wisdom for living well. SMI provides step-by-step guidance for do-it-yourself investors, from those just getting started to those getting ready for retirement. More information, including a short video webinar on profit and peace of mind, no matter what's happening in the market, is available at soundmindinvesting.org.
Hey, thanks for joining us today on Faith and Finance. We've got time for more questions today, something going on in your financial life you want to talk about. Give us a call. We'll help you process it through the lens of scripture, but help you make a practical decision, whether it's your lifestyle and your spending plan, reining in your spending, balancing that budget, Maybe it's investing for the future, given all the uncertainty. How do you save effectively, build up that emergency fund, pay off debt, improve that credit score?
Whatever it is, call right now, 800-525-7000. We've got a few lines open. Let's head to Orlando. Dawn, go ahead. Hi.
Yeah, thanks for taking my call. I appreciate it. We're getting a small inheritance from my husband's parents. and we have like $10,000 in credit card debt.
So I was wondering, would it be better? I mean, take some of that money. It's maybe about, I don't know, we might get about $60,000 and pay off the debt and then put the rest. I don't know what to do with it. Put the, you know, I don't know if we're two or about, we're in our 60s.
My husband's disabled. He's in a wheelchair. He had a heart transplant. it. And so I don't know if it's a good idea to put any in the stock market.
Yeah, it's a great question, Dawn. And so I would say, you know, paying off the high interest credit card debt is going to almost always be the best use of inheritance money, you know, because credit cards, I mean, the average interest rate right now is 22 percent. You could be as high as 25 or 28 And that far exceeds what you'd earn safely in investments or retirement accounts. And paying it off is a guaranteed return equal to that interest rate. It also frees up monthly cash flow because you no longer making the payment and it reduces overall financial stress So that a triple win in my book Next I would say in terms of order of priority would be if you don already have three to six months of expenses in a high yield savings or money market account, set aside funds for that next.
You know, it prevents future debt if an unexpected expense arises. And so I think that would be the second priority. And then the third, you know, other than giving goals, and if you have giving goals, maybe you do that right up front. But I think then we're starting to look at investments, you know, either adding to retirement accounts if you're still working or if you're already retired, just investing conservatively in a mix of fixed income investments and stocks to stay ahead of inflation while maintaining some stability. But give me your thoughts on all that.
OK, yeah, that's that's a good idea. I do have zero percent interest. I'm doing one of those change, changing the cards, but you do have to put in that fee and they're coming up.
So that's I get rid of that. Yeah, that's the other thing. Should you tie there whatever you want to call it on that money? Yeah, it's a good question. And I appreciate, you know, you thinking along those lines.
I mean, here's what I would say. You know, if you're if you're trying to apply the principle of the tithe, then the tithe is based on the increase. and this would absolutely be an increase. I mean, this is ultimately from the Lord by way of an inheritance. It all belongs to Him.
And I think, you know, why do we give? We give as an overflow of our gratitude for the grace extended to us.
So we should be givers. In the New Testament, we're no longer a part of the, you know, the Mosaic law. And so the tithe is not necessarily a minimum standard for New Testament believers. And yet we see plenty of reference to the tithe. And I think the idea, even in the New Testament, you know, is that we should give systematically and proportionately to what we've been entrusted.
We should even give sacrificially.
So I think that would even take it beyond the tithe, which is why Randy Alcorn calls the tithe the training wheels of giving. And it's a great, simple way to give a systematic gift on an increase because it's just every one out of ten, we make a gift.
So if we're applying the principle of tithe, then yes, I would say, you know, you give on your increase, and this certainly is that. But ultimately, is that a requirement? No. Ultimately, it's between you and the Lord what you give. And so I wouldn't say that's a must-have by any means.
Okay, yep, I get that. I understand that. That makes sense. Thank you. All right, Don.
Lord bless you. Thanks for being on the program today. Call anytime. Evanstown, Illinois. Peggy, go ahead.
Hi, I am calling just one, two questions. The first is, what is the right time to take your Social Security? I just turned 65, so I'm still working full time. I'm a basic caregiver for my sister and another person. And I may probably, I have in my 401 about 900,000 plus.
So I'm just trying to figure out what is the best time to take your Social Security? Should I take it now or wait when I think I'm going to come out in May of 2026? I know I'm not going to work until 67 because I'm a caregiver.
So getting a little tired of doing both jobs. Yeah.
So is the decision here, if you did start to take it now, would you go ahead and stop working immediately? Is that really what this is all about? No. No, I'm going to work probably until May of 2026.
Okay.
Got it. Yeah.
I mean, I would wait as long as you can. I mean, you're close to full retirement age, likely somewhere between 66 and 67. And if you don't need the income yet, waiting increases your benefit by about 8% per year. And you're not going to get that guaranteed increase anywhere else.
Now, you obviously have to collect long enough to be paid back for what you didn't take between 65 and let's say 66, you know, or even six months from now. But basically, one twelfth of 8% is going to, you know, your benefit is going to increase by for every month you wait.
So at a minimum, I would wait until you retire and need the income. And if you wanted to continue to wait and just start drawing something off of your investments, you could do that as well, especially if there's a portion of it in money market that's not earning a whole lot. You know, you're going to get that guaranteed 8% increase on this Social Security. and, you know, if you've got, you know, good longevity in your family and you're healthy, you know, you might really be glad you had that extra 10% a month, you know, a check 10% higher for the rest of your life.
Okay, and then the second question, I appreciate that, is when do you ever know how much is enough money? You know, because I have no debt, I have no car note, I have no mortgage, I have no charge cards, everything's paid up, I'm just doing basic homeowners insurance, insurance, commercial insurance, and utilities, and that's about it.
So when do you know if you have a step? Yeah, I think you would want to put your retirement budget together and then say, what is it going to take to fund that for the rest of my life? Let's say I lived age 95, and a great way to do that would be to take your monthly Social Security benefit and then take 4% of your retirement balance divided by 12, add that to your social security benefits and see if that gets you to your monthly expense number. If it does, you're in great shape. You may have even over-accumulated because you should be able to maintain 4% a year as a withdrawal rate and never deplete that 401k.
Folks, that's gonna do it for us today. I hope you found something today helpful and you were encouraged. I certainly couldn't do this without my amazing team. My incredible producer, Devin Patrick, providing great research today and assistance is Mr. Jim Henry, providing our phone support and call screening today, Sandy Dickinson.
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