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1 Corinthians 4.2 says, Moreover, it is required of stewards that they be found faithful. Hi, I'm Rob West. Faithful stewardship doesn't happen by accident, and the choices we make with money can either create pressure or help us manage those resources with wisdom and faithfulness. Today, we'll look at six financial choices that can help us steward well what God has entrusted to us. And then we'll take your phone calls at 800-525-7000.
That's 800-525-7000. This is Faith and Finance, biblical wisdom for your financial decisions.
So, what are the six financial choices that can help set us up to steward well?
Well, the first is choosing to spend with a plan. Proverbs 27, 23 says, Know well the condition of your flocks and give attention to your herds. For us, that means knowing what's coming in, what's going out, and whether spending reflects our values. Without a plan, money tends to drift. A budget helps us practice faithfulness with what God has provided.
The second is choosing the right car for your budget. We need reliable transportation to get from point A to point B safely. But it's easy to confuse reliable transportation with a vehicle that strains the budget. According to Kelly Blue Book, the average new vehicle transaction price was more than $49,000. And according to Experian, the average monthly payment for a new vehicle reached $770.
That's before insurance, fuel, maintenance, repairs, and depreciation. At Faith Phi we generally prefer being free and clear of car debt when possible. That may mean buying used, driving a car longer, or choosing function over status. The point is to get where you need to go safely and wisely. The third is choosing to count the cost before taking on debt.
Proverbs 22.7 says, The borrower is the slave of the lender. That doesn't mean all borrowing is sinful, but borrowing should never be treated casually. If we go into debt, we should ensure the economic benefit outweighs the cost of the debt. The question is not simply: can I afford the payment? The better question is: will this strengthen my financial position or create more pressure later?
The fourth is choosing to prepare for the unexpected. Cars break down, medical bills come, jobs change, homes need repairs. Proverbs 21, 20 says, Precious treasure and oil are in a wise man's dwelling, but a foolish man devours it. Saving is not hoarding when done with humility and wisdom. An emergency fund can help us avoid high interest debt and make decisions prayerfully rather than desperately.
Now the fifth is choosing housing that leaves margin. Home ownership can be a worthy goal, but owning the home is not the definition of financial faithfulness. Renting is not a waste when it provides affordable shelter and flexibility. The danger comes when we feel pressured to buy just so we can say we finally made it. If the payment is too large, we may become house poor.
Owning a home, but lacking margin for giving, saving, repairs, utilities, food, transportation, and other necessities. We typically recommend keeping housing costs around 25 to 30 percent of take-home pay. We also generally recommend a twenty percent down payment when possible. But the goal is not simply to get into a house. The goal is to maintain affordable shelter and utilities while stewarding the rest of the budget.
Recent housing data shows why this matters. A typical family earning the national median income needed about thirty two percent of its income to cover the mortgage payment on a median priced home. If home ownership is possible within wise limits, that's wonderful. But if renting allows you to maintain margin and faithfulness, don't despise it. All right, the sixth financial choice is choosing to make the most out of a workplace retirement match.
Investing may not feel urgent when there are bills to pay today, but if your employer offers a match, failing to contribute enough to receive it may leave part of your compensation unused. This is not about trusting in wealth for security. 1 Timothy 6, 17 reminds us not to set our hopes on the uncertainty of riches, but on God. But trusting God does not mean ignoring wise preparation. If a workplace match is available, it can be a practical opportunity to steward well what has been provided through your employment.
So where do we begin? Not with guilt or fear, but with honesty and surrender. Stewardship means being responsible in both the big and small financial decisions because everything we have belongs to God. If you need help setting up a budget, tracking your spending, or creating a plan, check out the FaithFy app to help you. FaithFi.com slash app is the place to go.
We'll be right back. Are you a financial professional looking to grow your practice while offering advice that aligns with your Christian values? By becoming a Certified Kingdom Advisor, you'll gain the biblical wisdom and professional credibility to serve clients who are seeking faith-based financial guidance. Each year, more than 75,000 people search for a certified kingdom advisor. Join our community and share your expertise with clients looking for someone who shares their faith and values.
Start your journey today by going to kingdomadvisors.com/slash get certified. We are grateful for support from Movement Mortgage, who provides residential home loans and reverse mortgage options in all 50 states. Guided by a mission to love and value people, Movement seeks to help individuals and families make informed financial decisions from buying a home to planning for retirement. More information is available at faith5.com/slash movement. Movement Mortgage LLC supports equal housing opportunity.
NM LS number 39175. For licensing information, visit NMLSconsumeraccess.org. Yeah. Great to have you with us today on Faith and Finance, taking your calls and questions today, 800-525-7000. You can call right now.
Let's go to Texas, and how can I serve you today? Hi, thank you for taking my call. Of course. My situation is... I'm 70.
My husband's 71. He's still working. He's a independent contractor. He's been self-employed all of our married life. He's an optometrist.
We have not invested in anything. We don't even have a 401k of any sort. He's been Self-employed, and he's always provided well. We've gone through some sallies, like everyone does, and some bad times, but we have a very little savings. I have a little tiny stock that I get, like eight to ten dollars every three months.
And I just feel like we haven't been very good stewards of the blessings the Lord has given us. And here we are at the end, and he really doesn't want to retire. And if we did, it'd be just our Social Security is all we'd have really to live on. And we'd have to cut back a lot. to do that.
So I don't know where to start, really. I feel like we should start doing something. Yeah, yeah.
Well, I appreciate that. And I, you know, I think at seventy and seventy-one, it's less about building wealth quickly and more about just creating stability. And you know, having some margin or some cushion to fall back on, and I think to your point, you know, I love the idea that he wants to continue working. I think we were created to be workers before the fall. That's part of how we worship the Lord.
We take God's creation and we improve it and we order it and we do that unto the Lord. And God is obviously your provider, and He's provided well for you. You've given testimony to that today. And yet, you're looking at the future saying, you know, there would likely come a day where we're unable to work in the way that we are now. And when that time comes, because of a lack of additional savings, we will be limited to Social Security.
And so we're going to have to right-size our spending accordingly. And I think some of that may need to happen now, where you begin to say, okay, yes, we want to continue to work as long as we can, or certainly he does, and that's great. But what if we were to dial back our spending right now to create more margin?
So we're not having to do that in such a drastic fashion when that time comes. And we can look toward having something that would be there for you all to draw from as needed. What is your housing situation? Are you in a house that's paid for? We own our house.
We have like $40,000 that we need to still pay on the land.
Okay. And what is it worth? Do you know roughly? They say it's worth $325,000.
Okay. And you own the land underneath? Yes, we do.
Okay. Are you living in a trailer or are you living in a single family home? Yeah, we're living in a double wide and we're renting out a single wide. Got it, got it.
Okay, very good. Both of those. Yeah, so the other option you may have is to look at a reverse mortgage because you own the land underneath. You're not just leasing it, or and you will eventually own it. You could convert that equity into a monthly income stream.
And that is a planning tool to consider in this season of life, especially if you're ill-prepared for being able to cover your expenses when that time comes where you're on Social Security only. And what that would do is, it would give you, in most cases, people will take it as a line of credit. The key is, it's not like a traditional line of credit where you would have a monthly payment. The home equity conversion mortgage or it's called a reverse mortgage would make that payment optional. You'd never have to pay it.
Now, the balance would grow over time with interest, but you could get a line of credit on a reverse mortgage tied to the trailers and the land that would allow you to, you know, if you needed some additional income, you had a major medical expense, you wanted to take a trip, you wanted to be able to do some things that you are not going to have the flexibility to do in that season of life, that could give you the ability to do that. And as the value of the property increases, you know, you'd have more equity to be able to tap into. And after both the second person passes, it would all be sold. Whatever is left after the mortgage is paid would then go to your heirs or give it away. According to your will.
But that would be another option. In terms of what to do right now, you know, I think the idea would be: what can we do to dial things back and to start slowly building a cash cushion? And I think as you look at your budget and see where you can trim, maybe you could come up with $200 a month and you just maybe automate it where you make it like a bill. And every month, you just automatically move that over to your emergency fund. If you could do more, great.
Maybe you can't do that much. But whatever it is, make automatic transfers every time he gets paid into a separate savings account and it would be there for unexpected events like a car repair or something that was unexpected. And now we're not having to look to credit cards. We've actually got that cushion. And if we could get to a place where we've got three to six months' expenses stored up, maybe now we're even starting to put that into some investments that could.
Could grow over time so that maybe you have more than just an emergency fund, but something truly that could be a part of your overall retirement assets. You know, when you get to that point. Does that make sense though? Yeah, I'm not sure what kind of a savings should we start. You know, we do have some money that I've been putting aside monthly.
Yeah, I mean, usually you would want to do that in a separate savings account. You could, for instance, a lot of our listeners use our friends at Adelphi Christian Banking, the largest Christian credit union in the country. You know, they're paying 4% right now on their money market. And it's a banking institution that would align with your values as a Christ follower. In fact, they give a portion of their profits every year to incredible Christian ministries doing work all over the globe.
But that would be an example of a credit union where you could have a savings account where you're earning some interest, actually a pretty good interest rate on the savings. And, you know, if you wanted to do that with a local credit union or you wanted to just look for an online bank, you could do that. But I think that would be the kind of thing I'd be looking for. And you could attach it to your current checking account electronically so you can move money back and forth as needed. But at least you'd be earning some interest.
And the key is it gets it out of that operating account, that checking account where you write your bills from.
So hopefully you don't use it as readily. Does that make sense? sense.
Okay, so do I find them online? Yeah, if you go to uh faithfi.com/slash banking, that's faithfi.com slash banking, stay on the line. I'll make sure you've got that. Thanks for your call. Let's go to Mississippi DeBral.
Go ahead. Thanks for taking my call. Um My wife passed away back in December. And there's a possibility I may be getting some life insurance, and I was wondering if that would affect my Social Security. Mm.
Yeah. It's a good question.
So first of all, I'm really sorry to hear about your wife's passing. That life insurance proceed will not affect your Social Security benefits. Life insurance payouts are not taxable income. And Social Security is not reduced based on receiving a lump sum like that.
So, you know, your monthly Social Security check will stay the same. Your life insurance payment will not count as earnings. That will certainly not reduce your benefit. I mean, you can earn as much as you want anyway at 73, but it's not going to affect your benefit check whatsoever.
So if I was to put that into my checking account, it wouldn't affect anything at all. It would not. Not not related to Social Security. No, sir.
Okay. All right.
Well, thank you so much. I appreciate it. All right.
Happy to help. If we can help further along the way, don't hesitate to reach out. Thanks for being on the program today, sir. Lord bless you. A quick break and back with much more on faith and finance.
You all stay with us. We'll continue to apply God's wisdom to your financial decisions and choices just around the corner. 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 FaithFu.
Membership eligibility required. Accounts are privately insured up to $250,000. This institution is not federally insured. 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, multifund portfolio solutions, and money market accounts reflecting their 500-year-old Anabaptist Christian faith tradition. More information is available at praxisinvest.com. Hey, great to have you with us today on Faith and Finance. You can call right now. We've got room for maybe two more questions between now and the end of the broadcast.
We'll get to as many as we can. Anything on your mind in your financial life today? The number to call 800-525-7000. That's 800-525-7000. Let's go to St.
Charles, Missouri Joe. Go ahead. Uh hi, Rob. Uh Joe, thanks for taking my call. Yes, sir.
Um my question is I am required to take RMD from IRA every year. Uh And I was told that if I make my charitable donations, say to my church. from my IRA that, that would reduce Uh the uh Total amount of my RMD that I'm required to report and then pay taxes on. Is that correct? Yeah, what happens here is that normally when you take money out of an IRA, whether it's just a straight withdrawal or you're doing it.
Because of a required minimum, when you take that distribution, it gets added to your taxable income.
So your taxable income goes up. Equal to the amount you're taking as a distribution from your IRA on top of any other income you have. The advantage of the qualified charitable distribution once you turn seventy and a half. From an IRA to your church or other qualified charities, like a nonprofit, is that the distribution can count toward your required minimum. and it's not included in your taxable income.
So, it's not there as additional taxable income, which it otherwise would be when you take a distribution.
Now, that doesn't mean you're getting a deduction on it. But you're not going to have to pay tax on it in the first place, which again would have increased your taxable income.
Now it's excluded from your taxable income. Does that make sense? Yes, sure does. And uh I guess is there Yeah, kind of like a form. That you uh have to fill out for that or or how would that be uh filed?
Yeah, it's a good question. There's not a particular special form. Essentially, what happens is the IRA distribution will typically appear on the 1099R, which is where all distributions appear. But then you would report the taxable amount differently on the form and note that it was a qualified charitable distribution. Which is why you want to keep good records with regard to the acknowledgment letter from the church or your charity.
So you still reported on the 1099R, but that particular portion is noted on the tax return. And there's a place to do this: that it was a part of a QCD, and therefore it is not taxable. All right.
Well, thank you very much. I appreciate that. Absolutely, sir. Thanks for your call today. Call anytime.
Let's go to Tennessee. Monica, how can I help? Hi, and I'm so excited to get in. I've never had this opportunity before.
Well, I'm so thrilled you called. Yes, I'm almost 70, and I have married at a late age, so we're a blended family. And so what I had earned, all my earning investments were separate from my husband, and those will go to my daughters whose fathers have passed away. And I have the biggest I had started with Fidelity, went to Edward Jones, and just wasn't satisfied. I've lost a lot of money through some stuff.
And so I wanted it secure.
So the person I'm with now has me with three. Those things you hate. You're probably talking about annuities. I wouldn't go that far, but I hear you. They're not my favorite.
Because I just don't want to lose any money. I'm not going to put any more in there, so I don't want to lose any, and I want to leave something for my children. And so listening to your program every day, it just makes me wonder: do I? I've asked them if they're a fiduciary, they are. I've asked them if they're kingdom advisors.
They are not. I've tried to find a certified kingdom advisor in Tennessee just to have them review and maybe advise because I want to do the best. that I can with what God's given me. Yes, ma'am. I certainly understand that.
And, you know, an annuity does have a place. It's not for everyone. And often, you know, I don't know that they're always. Quote, sold in the right situations. You know, it's really for somebody that values peace of mind, doesn't want to take really any risk, would prefer to transfer that risk to an insurance company in this case, in exchange for perhaps a lower return.
And a little bit more complexity, you know, and a loss of full access to the money.
Now you can get it, and increasingly over time, whether that's 10% a year or once the surrender charge expires, then you can get to your money and transfer it out until you annuitize, like convert it to an income stream. But they are complex, and often you are giving up some of the upside potential, which I believe is possible to manage. With the right advisor who understands your investment philosophy and more than that, your risk tolerance and your goals and objectives, who can manage the risk, but give you still full access to the money whenever you need it and have something left to pass on to your heirs. Let me ask you: what city are you in in Tennessee? It's Hendersonville, Gallatin.
The my investor's in Hendersonville.
Okay, got it. Yeah, so I can get 10% out, but you know, this is all pre-tax income. And but then they tell me if I get 10% out, that makes my income go up and gonna put me in a bigger tax bracket and all these things.
So I'm totally confused. Yeah, yeah.
And and so these are IRAs, they're pre-tax money, is that right? Pre-tax. Yeah, yeah.
So, and what is your age? 69 and a half.
Okay. So you're a year away from being able to, you know, use this money for a qualified charitable distribution where you could replace any current giving that you're doing. Are you relatively close to Nashville there in Hendersonville? Probably about 45 minutes away. Oh, okay.
30 minutes away. Because there's plenty of CKs in the Nashville area. And so that may be a good option for a second opinion because that would allow you to have somebody who shares your values, who could really help you kind of look at another option versus just continuing to add more annuities over time and at least give you some other option to consider.
So I would head to findacka.com and put in your zip code. You know, whether you meet with somebody virtually or you plan it on a day where you can drive the 45 minutes, again, you'd have plenty of options there in Nashville. But I just think having somebody who can do a comprehensive plan for you once you find the right person to give you that peace of mind to think about the tax side, to think about the investment strategy, to think about your estate plan and ultimately who the next steward is. All of these things play into ultimately how you would position these assets for the future. Not only for their growth, but for the efficient management of them.
Stay on the line. We'll talk a bit more.
Well, folks, we covered a lot of ground today.
So thankful to have you along with us here on Faith and Finance. Our heart that you would understand your opportunity to be faithful stewards. Everything belongs to God, He entrusts it to us. We're to be His household managers. Our goal is to manage it faithfully over our lifetime.
We want to help you do that each day.
So come back and join us tomorrow. We'll do it all over again. Big thanks to my team today: Taylor Stanrich, Sandy Dickinson, Devin Patrick, and everybody here at Faith Five. We'll see you tomorrow. Bye-bye.
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