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Summer is not that far off and the kids are already thinking vacation, but you be ready for it? I am Rob West. How can you make great family memories without breaking the budget? That's always the challenge. But Crystal Payne joins us today with some great tips for a budget-friendly family vacation.
And then it's on to your calls and questions at 800-525-7000. That's 800-525-7000. This is Faith in Finance, biblical wisdom for your financial journey.
Well, our friend Crystal Payne is our guest today. She's a sister in Christ, the creator of the very popular website moneysavingmom.com and a frequent contributor here at Faith and Finance. And we're delighted to have you back, Crystal. Thank you so much for having me back. All right, Crystal, today we're talking all about having a great family vacation while sticking to a spending limit.
And I know you've got some tips for us.
So let's dive in. What's first?
So, the first step is always planning ahead. Start early to maximize your options. Consider traveling to an area that's not on the beaten path for fewer crowds. And if you're flying, I love to use the Google flight search. You can choose your dates of when you want to go, and then you can choose to fly anywhere to see the lowest options available around the country during those dates.
So, it's just really helpful to figure out where would be the best place to go for the best price. And then also to set a clear budget for your entire trip and decide what's important for you and what's not.
So, maybe staying at the beach is a priority, but you're happy to bring food instead of going out to eat. Yeah. For your household, do the kids get in that conversation when you're picking the where? Absolutely. Yes, they do.
I just took my daughter on a spring break trip recently, used the Google Flight search, and she said, I don't care where we go. I just want to go to a beach. I love it. That's so good. All right.
Well, obviously not having a plan can be very expensive.
So I love that first tip. What's tip number two?
So this is going to really save you money and that's to take advantage of free activities.
So these can be the hidden gems of any vacation. You can search online for your destination plus the words best free things to do or something similar like that. And you usually find a lot of great ideas. I do this often and you can look into hiking options, self-guided walking tours, local parks.
Some even museums are free or art exhibits or even free festivals or concerts. Mm. Crystal, are you using AI tools to build itineraries or are you just still doing an internet search and then kind of building it yourself? I haven't used AI yet, but I use AI a lot for my business, and I keep hearing from so many of my friends who are using it for planning trips.
So I want to try it. Yeah, I love it.
Well, I think the free options are often overlooked, and it's a great reminder that there's some great things that'll be really memorable that we don't need to miss. All right, what's next?
So, get the family involved in planning would be tip number three. We talked a little bit about, you know, letting our kids choose where they want to go, but maybe that's just allowing them to choose an activity. You're not going to be able to do everything where you go, and you can't always know what your family members would love to do.
So, ask them what's important to them. Let them help with the planning. And also, a fun thing to do is give everyone a set budget. Let them plan a few hours of the vacation with that budget. That's a great way for kids to learn practical skills and they can also appreciate how much things cost.
Totally. That's a great idea.
So practical. And it allows everyone to have a piece of the vacation that their interests are going to be reflected.
So that's really good. All right.
What about tip number four?
So, that's to be strategic about your meals. Food can cost a lot if you let it.
So, really paying attention to that. We like to stay in a hotel that offers a free breakfast and then bring snacks and food from home for at least one meal a day. That way, we usually only eat out once a day, and that saves a lot of money. Another thing that we've done a lot, especially if you're flying and you can't bring as much food with you, go to the grocery store when you get into town and pick up stuff for sandwiches. For instance, buying a loaf of bread, a jar of peanut butter and jelly, some chips, carrots, fruit.
It's usually going to be a lot less expensive than if you were to go and eat out. Yeah, and part of traveling is just having fun, splurging with a nice meal. But let's be strategic about which meals those are. And I think picking up some things at the grocery store for lunch is a great way to do that. All right, we've got time for just one more about 30 seconds.
What is it?
Okay, back to the budget. Set a daily spending limit at the beginning of the trip. Make sure you know what your daily spending limit is. View it as a sort of family game. See how far you can stretch this amount every day.
And stay under budget. This is a really fun way to get your kids involved, to help them think intentionally about purchases, and to make budgeting a fun family affair. I love it. Well, and the best vacation is the one you come home to that doesn't have any debt involved, no credit cards that you're still paying on. Crystal, this has been so helpful.
As always, thanks for stopping by today. Thank you so much for having me. That's family finances expert Crystal Payne. Learn more at money savingmom.com. That's money savingmom.com.
We'll be right back. I was in ministry full time and I was always looking for a way to integrate my faith with this new industry around money and finances. This is Mark. He is a certified kingdom advisor. As a CKA, one of the best things I offer my clients is trust in knowing that they're working with a professional that understands their values.
And I think in all of the different challenges that clients go through, if we can go back to trusting in God, then He'll make the path straight. You can find an advisor like Mark at findaceka.com. FaithFi's preferred banking partner is Christian Community Credit Union, now joined with Adelphi, a division of CCCU, bringing you the best in Christian banking for Greater Kingdom Impact. With high-yield checking, savings, Visa cash back cards, and a new competitive high-yield money market account, your everyday banking helps advance the gospel. Visit faithfy.com/slash banking and use the code FaithFuy.
Membership eligibility required. Accounts are private. insured up to $250,000. This institution is not federally insured. Uh Yeah.
Great to have you with us today on Faith and Finance.
Well, in just a moment, we're going to begin taking your calls and questions.
So, if you'd like to get in on the conversation today, we're ready for you. That number is 800-525-7,000. That's 800-525-7,000. You can call right now. The calls are coming in, but at the moment, at least, we still have a few open.
We'd love to hear from you. In the news today, even as many families feel the strain of higher prices, there is an encouraging trend worth noting. New research shows that low and moderate-income Americans are investing at sharply higher rates, up 167% since 2020. More than half of households earning between 30,000 and 79,000 a year now report participating in the markets, and many began just in the past five years. Greater access to online platforms, lower minimums, even temporary.
Boosts such as tax refunds have helped make investing more attainable. But here's what's especially telling: those who build even a modest emergency cushion, about two weeks' worth of expenses, are far more likely to begin investing. That's a reminder that wise stewardship starts with preparation. When we create margin, we gain opportunity. While markets rise and fall, disciplined long-term investing remains one way families can participate in compound growth.
The key is balance, prioritizing emergency savings, avoiding speculation, and remembering that our ultimate security isn't in the market, it's in Christ alone. All right, we want to take your calls and questions today. Again, that number 800-525-7000. You can call right now. Let's begin in Oklahoma.
Robert, go ahead, sir. Hi, thanks for Thank you my call and Course. Um I've got a situation where I I I'm sixty six years old, turned sixty sixth of January, and I retired from the Air Force Um uh just in December thirty first.
So uh I've been going through some health issues. Uh you know I've had just recovering from surgery and it's I'm having to deal with some Cancer issues, and I've got treatments still lined up, and I got to do. uh radiation treatments and whatnot.
So I'm kind of out of proportion in here. I mean, for thinking of other employment at the moment.
So I'm thinking about just Retirement at my age, but I'm not full retirement age till 67 for Social Security. Yeah. I was I was thinking Um I've got a small retirement coming from the government because I didn't I wasn't a civilian very long. And it's not much. It's probably only about five hundred dollars a month.
And I uh I have some IRAs, I got a Roth and a small Roth and whatnots. But if one of my question is, If I if I think about uh retiring I know that it can you know, if my income is over 24 something, it's almost $25,000, it counts against my Social Security. you know, uh, a dollar for every two that I earn.
So what income counts against that For my Social Security, is it earned income or or all income or unowned income? If I drop from my R age or I have some retirement income, is that going to count as income? It goes against my Social Security. Yeah, it's a great question. Thank you for your service.
And I'd love to help you think through this. With Social Security, there's two things that can reduce your Social Security benefit, your monthly check. The first is you taking Social Security early before your full retirement age. That benefit reduction is permanent.
So, based on how many months you start early is going to drive how much of a reduction you have, and it lasts for the rest of your life.
Okay, and even when you reach full retirement age, the reduced amount stays. With the cost of living adjustments applied to that lower base.
So think of it as a smaller pension because you started it early.
So that's permanent. What is not permanent is the reduction that occurs when you go over the earnings limit.
Now, in the year you turn full retirement age, which you're close, it goes up and it goes to a dollar for every $3 you go over the limit. But again, that reduction is not permanent and will ultimately be paid back to you after you reach full retirement age in the form of a higher check. But let me stop there and just get any questions you have. No, I understand. I got that.
Okay, cool. And then the next question is: okay, what is the strategic priority of these various assets you have access to in the form of either guaranteed income through Social Security or your IRA? And what I was saying is that, you know, typically what we look at is by saying, okay, for a healthy person with a normal life expectancy who doesn't have a, you know, a dire need for income right now, we would start with. Taxable accounts, if you have any taxable investments outside of retirement accounts, if you don't, then we go to the next bucket, which is IRA withdrawals, because you're in a lower tax bracket right now. You're not working and you don't have any required minimums yet, because that's not until 73.
So, this is often a great time to start pulling from those required minimums, or excuse me, pulling from that IRA prior to required minimums. And then we delay Social Security at least until full retirement age, if not longer, to try to get that. Lifetime income, that monthly check, up as high as we can, which also helps with the survivor benefit if you're married, because that would be a higher benefit that would go to your spouse after you pass away. But let me stop there and get your thoughts on that.
Okay, yeah.
So you're saying the taxable accounts, I do have a couple of small taxable accounts that are IRA. Uh That I've had for a long time.
So you're saying I should draw the The capital gains out of those accounts first before I draw out of my RAs. Yes, typically so, because the ta the cat long-term capital gains is going to be lower than you creating taxable income through the IRA.
Okay. Yeah. The only issue there would just be depending on your life expectancy and whether your cancer is manageable and so forth. You know, obviously Social Security goes away when you pass away.
So that is a factor if we're not talking about a normal life expectancy.
Now, none of us know the hour the Lord will call us home.
So it's not like even if we're completely healthy, we can predict how long we're going to be here. But that is a factor. Alongside that, you need to think about whether you're married or not, whether you want to get your survivor benefit up as high as you can. But those would be the other considerations. Yeah, because the problem I have is when I retired at twelve thirty one, Uh I got a settlement.
You know, for all my vacation and everything. And they paid me in January, and it was over $25,000.
So unlike I've already maxed out my earned income. You know, that with my Social Security for the entire year. But is this the year you turn full retirement age? It'll be January of next year at 27. Got it.
Okay. Yeah. I got paid in January twenty sixth a settlement.
So that for twenty six, I've already maxed out my income. Got it.
Yeah. So if you if you had that reduction because of your income, it will eventually come back to you.
So that would be temporary.
Okay. Yep. Thank you so much. Absolutely. Thanks for your call, my friend.
And I appreciate again your service to our country. And if we can help you in any way along the way, don't hesitate to reach out.
Well, folks, we're up against our next break here. When 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. All the details on supporting our ministry at faithphi.com/slash give.
You can check that out today. We'll be right back. As the leading advocate for the Christian financial industry, Kingdom Advisors serves the public by promoting the integration of a biblical worldview across every aspect of the financial services industry. And we serve a growing network of thousands of Christian financial professionals, equipping and empowering them to carry biblical financial wisdom to their clients, peers, and community. For more information, visit kingdomadvisors.com.
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Here in our final segment, we're going to get to as many calls as we can today. That number, I've got room for maybe one more question: 800-525-7,000. Let's head to Texas. Susanna, thanks for your patience. Go ahead.
First and foremost, thank you for taking my call. I appreciate it. And I have a very simple question. I have two traditional IRAs. and one Roth IRA.
I'm 60 years old. I work full time. I'm going to continue to work as long as I can up to 67. My plan is to transfer these traditional IRA into my Roth IRA, but I know I have to be careful because I have to pay taxes on that money.
So my question to you is, is that a good plan? Or is there somewhere else to put this traditional IRA money into? What is your advice? Yes. It's a great question.
So the core question here is always with a Roth conversion, would you rather pay taxes now or later? Because a Roth conversion means you pay tax today. The money grows tax-free forever. You have no required minimums later. and you get tax-free withdrawals, and your heirs do as well.
Which is a benefit. They wouldn't have to take the money out during their potentially working years in higher tax brackets and pay tax on the pre-tax money. You would go ahead and pay it now. That's a benefit. Keeping it traditional, though, means no tax today, taxes later, required minimums at 73, and taxable income in retirement when you start drawing these out.
So you have to always ask: is my tax rate likely lower now? or lower later. The challenge is you're still working. And so, you know, you are likely in a higher tax bracket if you have higher income now that's going to be lower in retirement because you're no longer working at that point. But if you expect large required minimums in Social Security, and maybe you're going to have a pension, or you're just anticipating, and I wouldn't disagree with this, tax rates rising in the future versus where they are today.
Then that's where it could make some sense either to convert all or a portion, more likely. You'd either stagger it over multiple years or you'd maybe target a certain percentage. And that way you'd have two buckets of retirement assets. You'd have the pre-tax bucket that you leave in the IRA and the after-tax bucket that you convert. The timing matters, though, because again, you're still working full time.
So that usually means a higher tax bracket right now, and therefore the conversion could be expensive. The sweet spot for conversion is often the early retirement years before Social Security starts.
So, if there was a window where you stopped working and retired, and you have not started taking Social Security, those might be the sweet spot for when you might want to start converting a portion of it over to Roth at that point. But I would say, you know, you'd want to know why you're doing it. Number one, and number two, I would want you to have the taxes available to pay the bill without having to pull from the account.
So let me stop there because I've thrown a lot at you and get your thoughts. No, and I somewhat understand. I am at a high tax bracket. I talked to my CPA, and she says it's probably a safe place for you to transfer two thousand five hundred a year until you're sixty five, sixty seven.
Okay. So if I decide first of all, should I continue to transfer two thousand five hundred until I retire? And if I do retire before I collect Medicare, what is the advantage of doing it then compared to what I'm doing now? Yeah. Well, the benefit of not converting prior to you being taking Social Security and Medicare is.
Every conversion is going to add taxable income. And what you don't want is that taxable income through the conversion on top of whatever other income you have, pushing you up into a situation where more of your Social Security is taxable and tripping over what's called an IRMA threshold where your Medicare premiums are more expensive because you have a higher modified adjusted gross income, which the conversion would contribute to. But I think, just based on what your CPA is saying and the modest amount you're talking about, $2,500 a year, you're probably in pretty good shape there. Again, as long as your CPA has looked over it, I don't have any issue with that. And that's just going to slowly get more out of the account that's ultimately going to have a required minimum because the Roth won't.
And it's going to make it tax-free forever.
So if we find ourselves down the road in much higher tax rates, you'd have the ability to start pulling from the Roth and not from the taxable IRA.
Okay. And that does make sense because we're talking twenty three thousand dollars. And I can do that within the next five, seven years, I think, without a problem. Got it.
Yep, I like that plan a lot. I think that makes a lot of sense.
Okay. Well, listen, I just needed some good advice, and I appreciate you. I appreciate your show. And thank you for everything that you do and for taking my call, sir.
Well, I'm delighted to do it. And call anytime, Susanna. All the best to you. Julie's been waiting patiently in Indiana. Julie, go ahead.
Hi, Rob. It's great to talk to you today. Thanks for taking my call. Of course. I have a question about donor-advised funds and Minimum required distributions, and I'm wondering if The donor advised fund can be used to receive funds that are required to be taken from an IRA or a 401k.
Yes, unfortunately not. The IRS specifically excludes donor advised funds from receiving what are called qualified charitable distributions, which is where you take money out after seventy and five going not from a 401k but directly from an IRA. It has to go to what they call an operating charity.
So, you know, a 501c3 ministry, a church, a hospital, a food bank, another ministry in order to count.
So you would have to just take a regular distribution and then make a contribution to your donor advised fund, at which point you'd get a charitable deduction for that. But you can't do the qualified charitable distribution where you just exclude it from your income altogether.
Okay. And at what age does the minimum required distribution kick in? At 73 is the current age.
Okay, so the year that you turn 73 on that tax year? Uh yeah, what is your age right now? I'm seventy-two. My birthday's in October. Yeah, okay.
Yeah, so you have to take Uh your first required minimum. By April 1st of the year following the year you turned 73. And then, if you wait all the way until April 1st, you would take a second one that year because moving forward has to be by December 31st of each year.
So you could take the first one for the year you turn 73 by April 1st of the following year, and then that year's required minimum would be by December 31st and each December 31st thereafter.
Okay, but I could take it before April. You could, uh-huh, absolutely. The first one.
Okay. Yep, okay.
Okay. Thank you. I appreciate your help. You are welcome. Thanks for your call today.
Lord bless you. Thanks to my team today. Pat, Jim, Taylor, and Devin. Couldn't do it without them. We'll see you next time.
God bless you. Bye-bye. Faith in Finance is provided by Faith Buy and listeners like you.
