What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values. How about someone who will take the time to explain your options? Certified Kingdom Advisors are professionals who meet high standards in competence and integrity and have been trained to offer biblical financial advice. To find a Certified Kingdom Advisor in your area, visit faithfi.com and click Find a CKA. Proverbs 27-12 reads, The prudent sees danger and hides himself, but the simple go on and suffer for it.
Hi, I'm Rob West. The word insurance isn't in the Bible, but it does say that it's wise to protect your financial holdings, and insurance is one way to do that. We'll talk about all the insurance you need today, and then it's onto your calls at 800-525-7000.
That's 800-525-7000. This is Faith and Finance, biblical wisdom for your financial decisions. Well, unless you have tens of millions of dollars spread across dozens of investments, you're going to need insurance for several things. So what insurance do you need?
Well, let's start with policies that you don't have much choice about purchasing. Auto insurance, for example, is usually required by law if you own and drive a car. Homeowners insurance is also required if you have a mortgage, and it would be quite foolish not to have it even if you don't have a mortgage. You can usually save money by bundling auto and homeowners insurance. While you're at it, look into the option of an umbrella policy. For $300 or $400 a year, you can add a million dollar policy to protect your assets in case you're sued and the settlement exceeds the limits of your auto or homeowners policies, which is easy to do these days. By the way, if you're a renter, you need to have renters insurance. It will probably cost you less than $200 a year, and it's well worth it.
It not only protects your property inside the rental unit, but also covers you if you're sued by your landlord or someone else for negligence. Obviously, another must have is health insurance. If you think it's too expensive, consider not having it. The average cash cost of a doctor visit is $100 to $150.
Paying cash for an emergency room visit will cost you around $2,500, and a one day stay in the hospital without insurance can set you back around $9,300. You know, a lot of folks call asking if they need life insurance. The truth is you don't need life insurance unless someone is depending on your income. When the kids are grown and out of the house, you may not need it at all, or perhaps you can downsize your policy to provide for your spouse only. And in most cases, I would advise you to get a term life insurance policy, not whole life.
Don't mix insurance with investing unless there's a specific reason to do it. Once you reach your 50s, you really need to look into long term care insurance. If you don't think you need it, consider that 70% of 65 year olds will need some type of long term care, according to the latest data from the Department of Health and Human Services. Women typically need this care for 3.7 years.
Men need it for 2.2 years. That's plenty of time to wipe out all of your assets before Medicaid takes over paying for your care. Long term care insurance is generally expensive, but again, consider the cost of not having it.
You will purchase it between ages 55 and 65, start looking at policies in your early 50s, and select one with the longest term you can find. Another form of insurance you probably should have is long term disability insurance. If you are incapacitated due to an accident or illness, you could be without a paycheck long enough to wipe out your emergency savings. A long term disability policy will cover you in that event. Plan on it costing between 1 and 3% of your annual salary.
Premium amounts are tied to how much you make, so the higher the salary, the higher the premium. Now let's look at a couple of types of insurance you probably don't need. First is title theft insurance. These policies don't really lock your title, and if someone files a false deed and takes out loans on your property, you can't be foreclosed on because it won't hold up in court. Also you can sign up for free monitoring now with most county deed offices. By the way, don't confuse title theft insurance with title insurance, which you really do need when you purchase a house.
That protects in case there's a legitimate challenge to your ownership of the property. And finally, there's identity theft insurance, another type of policy that claims to, quote, lock your credit. You can freeze your credit all on your own for free with the three credit bureaus, Experian, TransUnion, and Equifax, and you really should do that. You can freeze and unfreeze your credit any time you want.
Identity thieves won't be able to open accounts in your name because lenders can't check your credit if it's frozen. Still, credit monitoring services can be valuable. Many times when there's a data breach somewhere and you have to get a new credit card number, for example, you'll be offered free credit monitoring perhaps for a year. Always sign up for that. It'll alert you if someone tries to open an account in your name. All right, I hope that helps you today. By the way, be sure to check your credit report and credit score regularly. Credit report, annualcreditreport.com, credit score, credit karma, or credit sesame. Your calls are next, 800-525-7000.
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Visit faithfi.com and click the word app to get started. Are you a financial advisor or CPA seeking to build your practice on biblical wisdom? Not only does the Certified Kingdom Advisor Education provide you with deep biblical insights, the CKA designation sets you apart. Each year, almost 50,000 people search for a Christian financial advisor. Join our community and share your expertise with clients looking for someone who shares their faith and values.
Find more information at kingdomadvisors.com slash get certified. Great to have you with us today on faith and finance. I'm Rob West.
I'm so glad you're along with us today. It's time to take your calls and questions on anything financial. Here's the drill. You call, and we help you process and think through your financial questions in light of biblical wisdom. That's right. We want to be wise and faithful stewards.
We do that by looking to God's Word, but we also want to give you some hope and encouragement along the way. The number to call, 800-525-7000. Again, that's 800-525-7000. We've got lines open today. You can get through right now. Let's dive in. We'll begin in Hartford, Connecticut, and Robert's calling with a mortgage question. Robert, I understand you're going through something right now that I've done recently. You're at the DMV with your daughter, is that right?
That is correct. I love that. Now, you're not going anywhere anytime soon, so we could take our time with this question, I guess.
We'll see. She passed. She passed.
Hey, congratulations! Thank God. That's awesome. Now, was this the driving test or the computer test? The computer or the permit, yeah. Okay, for the permit. All right. Yeah, that's a good one.
Now, you get the fun job of sitting next to her and coaching as she feels her way through that, huh? Yes. That's the next few months. All right. That's great. Well, I'm sure she's ready to get out of there, so let me let you get to your question.
Yeah. So, our question is that we sold our house in 2019 right before the pandemic, and we went overseas, and then we came back, and the pandemic hit and the housing prices went up. Some dear friends of ours from church allowed us to rent at a very, very below market price. We have four kids, three-bedroom, one-bath house, and we're renting for $1,100.
Both my wife and I are teachers, so we have about 20% that we could put on a $300,000 house, but we're like, man, with these interest rates, we just don't know if this is the right time. We're like, maybe we should just wait. So we're kind of just trusting God and just waiting, but we thought it might be a good idea to get a little bit of advice. Yeah. Well, I can certainly appreciate the dilemma, and you went out of the country. Did you go do some mission work, or were you all, what were you up to out of the country? Yeah.
We were working with an organization called Mission Aviation Fellowship. Oh, yeah. Yeah. We're teachers. I'm familiar. Oh, you are.
And we taught a little school in Papua, helping translators and pilots and mechanics, basically giving them a Western education as they served, and getting the Bible to last, last, and least. That's incredible. I love that. That's awesome. And so, obviously, that had a season. The Lord's brought you back, and now you've got this great opportunity, but I realize it's cramped.
I mean, I know what it's like. I've got four kids. You're in a 3-1. It's a blessing that you're spending kind of below market rates, but you're probably looking for a little more space. Now, in terms of the housing prices, we don't expect housing prices to go down. The pace of increase has kind of tempered, and we've slowed the rate of appreciation, but I don't think we're in any kind of bubble situation. Even if we were to hit a recession, we don't expect housing prices to dip, just because the supply and demand is still an issue. There are too few homes in this country for the demand that exists for a variety of reasons, and we are at a high point on interest rates. I just saw that we ticked back up to pretty close to the high watermark on interest rates. I mean, we're above 7%, so the challenge I think you're going to have is, even if you were to find something, let's say you get in something that's 7.1%, I mean, you're going to be spending $1,900 a month when you look at principal and interest plus taxes and insurance, depending on what part of the country you're in. The taxes and insurance might even be a little higher than my estimator, but the principal and interest alone is going to be $1,612 on a $240,000 loan when you put 20% down on the $300,000 purchase price, and then you've got taxes and insurance on top of that. If your $1,100 goes to $1,900, kind of what percent of that is your take-home pay, do you know?
Not off the top of my head. Yeah, I can imagine. What do you think you guys bring home after tax?
Well, we have all four kids in a private Christian school, and so that's a huge chunk of our earnings, because we didn't feel comfortable putting them in a public school in Connecticut. Yeah, I can certainly get that. Well, here's the reality, and I think you've got to go back to that budget, because as much as you'd like to get into a place of your own and get some of that appreciation that's coming and just get a little more space, you know, if that what is today $1,100 goes to $1,900, even though, you know, if you factor in renter's insurance and things like that, if you've got it, it may be a little higher than $1,100, but let's say you're adding seven or $800 a month to your budget, can you afford that? Where would it come from? And if not, then continuing to save and waiting for the rates to come down may be the better option despite the fact that you guys would like to get into something sooner rather than later. So I'm thinking, you know, the question would be if you continued at $1,100 a month, and you said, okay, our goal is to buy something in the next 24 months, two years, how much could we free up, you know, per month to add to our existing savings? So maybe now we're putting down a 30% payment, and let's say instead of rates at 7.125, they're at, you know, in the fives, you know, a couple of years from now, that would be a game changer. Because now all of a sudden, you know, let's say you're putting down, well, let's just go with 70,000. And let's say that rate comes down to 5%, you know, now all of a sudden, we're at 1500 a month with taxes and insurance, you know, instead of 1900 a month.
So that's $400 a month you're saving. So I think that may be the better option, but we've got to let the budget drive that. Does that make sense? That makes sense. Yeah. Yeah.
Okay. So I think it's probably let's hold off, but let's not wait to go ahead and do the hard work on the budget. And if you find that, yeah, we just can't swing that right now, because 1900 is a little too rich, well, then let's use this as an opportunity while you have this blessing of this home under market. Even though you're cramped, let's use that as incentive to say, All right, we're really going to buckle down, we're going to save as much as we can out of surplus every month. But hopefully that's an encouragement to you tell your daughter on behalf of listeners to faith and finance live nationwide.
We're excited for her test score. Thank you so much. I will and I thank you and I appreciate your help. And, you know, it's just blessings to you and your program and we much appreciate it. That means a lot, Robert, and thanks for your service to our Lord. And I know that continues even though you're off the mission field, but what a privilege that must have been to be able to serve in that way for for that season.
So appreciate you being on the program, sir. Harold and Zephyrhills, quickly, I know you're asking about Social Security versus disability. Is that right? Yeah, yeah, I'm getting Social Security disability right now. 56.
I want to know is the price of what I'm getting now monthly. Will that change when I turn 67? It will automatically convert to the retirement benefits of the same amount. And so typically, you don't even have to do anything to make that happen.
If it didn't happen, you'd contact your local Social Security office and let them know that you've reached full retirement age, but it it will convert and it will stay the same. All right. Thanks.
That's all I need to know. All right, Harold, thanks for your call today. By the way, if you're looking for advice from a financial professional and you'd like someone who shares your values and has met high standards and character and competence and ethics, well, we trust the Certified Kingdom Advisor designation, the only financial services industry designation out there that is around biblically wise financial advice, pastor and client references, annual continuing education, experience, character and ethics requirements all having been met. You can find a C.K. in your area and I'd interview at least two or three. Just go to faithfi.com, click find a professional.
That's faithfi.com. Hey, back with more in our final segment right around the corner. Stick around. What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values? How about someone who will take the time to explain your options? Certified Kingdom Advisors are professionals who meet high standards and competence and integrity and have been trained to offer biblical financial advice. To find a Certified Kingdom Advisor in your area, visit faithfi.com and click find a C.K.A. Paying too much for health insurance, frustrated by high deductibles and increasing premiums?
There's a better way. Christian Healthcare Ministries, CHM is a Christian community delivering a faith-based solution to the high cost of healthcare. Take control over your healthcare costs with a program from CHM that could save you up to 40%. Learn more and enroll today at chministries.org slash faithfi. That's chministries.org slash faithfi. This is Faith at Finance for taking your calls and questions today on anything financial.
800-525-7000. You know, as we think about managing money so often, it seems very complicated and overwhelming and I get that. It certainly can be and so that's why we try to simplify as much as possible money management saying that, okay, money is a good creation from God to provide and enjoy and to give generously. God owns everything so we're stewards or money managers and if we start with that premise then every spending decision is a spiritual decision. We make God our ultimate treasure and we see money as a tool to accomplish God's purposes so it's not an end, it's a means to an end which is really a big idea because the world would have us to find our fulfillment for a longing for abundance in the things of this world. They don't satisfy, only God does and yet we can use money to accomplish God's purposes. So how do we handle it?
Well, there's kind of five big ideas we see in Scripture among other things. Live within your means because that's the key to every financial success. Avoid the use of debt because debt mortgage is the future. Set long-term goals because the longer term your perspective, the better the financial decision you'll make today. Have some margin or some surplus because that's how you ultimately are going to fund your longer term goals and then give generously because giving breaks the grip of money over our lives and recalibrates our hearts to the fathers and allows us to participate in his activity and when we do those things with God being our ultimate treasure in the center of it all, well, it changes everything and it doesn't mean we'll be free from difficulty in our finances.
We will go through those difficult seasons. We live in a fallen world but at least we put ourselves in a position to know that before even the first dollar we're rich because God has given us his son. He's paid the penalty for our sin.
He's reconciled us to him and so we have life and we can have life abundantly through Jesus and his finished work on the cross. So hopefully that's an encouragement to you today but I realize that beyond that you have specific questions in your financial life so let's dive into those. In fact, we'll head now to Dyer, Indiana. Hi, Carlos. Go ahead, sir.
Hey, how you doing? Thanks for taking my call like everybody else says but my question is that I purchased a home in Dyer at the balance of $310,000 and I put a substantial amount and I owe a balance of $17,338 as of right now. My payment that I'm paying on this mortgage is $31.92 goes to my principal, $101.47 goes into my entrance and then my S score, my tax S score is like $443 that leaves me a balance of $577 per mortgage payment. All right, so I got locked in on a 7% for 30 years and I have substantial enough money right now to pay it off, a balance of $17,338. My question is should I pay it off or should I just hold onto another year and I'm in limbo with that question. All right.
Well, that was really helpful background. Where would the money come from if you paid it off? I have three savings accounts, one for this purpose where I work part-time and all that money goes into that account that pays my monthly payment on this regular.
The other mortgage is like my savings and then of course my social security account that I have on the side is like my emergency account. All right. So how much do you have in each of those accounts? Okay.
And my social security account, I got $41,000. The other two, I got $10,000 each. Okay. So 10 and 10, so a total of 20.
And are any of those earmarked for anything in particular? No. Okay. The only thing I'm paying right now is just my regular utilities, but I've been through this before because I sold my home last year and then I purchased this home and the fact was that when I purchased this home, I purchased it before I sold my last home and with the capital that I walked away from selling a home three months later, I put it all, every penny on this home that brought it down to where I'm at now. Got it.
Yeah, that makes sense. And so you plan on living in this home for the foreseeable future? As of right now, I'm looking at possible, I'm looking at my age, I'm going to be 69 and I don't know if this is my last hurrah living in a home. My three daughters have left the house and I raised my daughters and now I'm trying to do something for myself. So then just to put this in there, recently in March, I had a personal health issue.
I recovered for it and that's when they woke me up to say, okay, well, my ducks are not in order as far as this home, it's not where they are now that I have time for it. I have, you know, and so I was just wondering, just in case you never know no more, I want to have the house, you know, either paid off or I'm going to have a balance that my daughters will have to pick up. Yeah. And you said that the interest rate's about 7%?
Yes. Okay. And last question, what are your income sources today beyond social security? My only income working for the town of Dyer is about, I'm going to guess about $1,200 per month. I get paid every two weeks. All right.
And how much do you usually have left over at the end of the month? With that one, I have at least, oh, I'm sorry, I didn't add that I have a pension because I'm retired from a company. Oh, okay. Yeah. So if you put all your income together, the city of Dyer as social security and the pension, how much do you usually have surplus at the end of the month?
Okay. I'm going to say at the end of the month, about $38,000. Per year you have that left over? No, no, monthly, monthly.
Well, not $38,000 a month. You mean $3,800? Yeah. Yes. I'm getting, you know, $14,000 and $22,000 from social security, so I'm looking at $36,000 and then whatever I own with monthly. But after your bills are paid, you usually have something left over?
I'm going to say about maybe $500, $700. Okay. Got it.
Yeah. I'd pay it off. And here's why. I mean, it's an immediate 7% return on your money. You're not going to get that anywhere else, guaranteed, and it's guaranteed when you pay off the mortgage. Number two, you've got plenty of liquid savings. You're up at over $60,000 in liquid savings. You got an extra $500 to $700 a month. As soon as you do this, if I understand correctly, you know, you'll have another, what is your mortgage payment today? Right now it's $577 and only $31.92 goes to my principal, the rest are interest and escrow.
Yeah. But obviously you'll continue to pay the escrow to yourself because you need to have the money available for the taxes and insurance, but you're going to free up $150 a month between the principal and interest that you're no longer going to be paying, and that's just going to go on top of the $500 to $700 surplus. So I'd say wipe that thing out, own your home free and clear, and never look back. I think, I kind of figured it'll be that route, but like I said, I just want to make sure because right away, you know, they told, well, that's a tax write-off, yeah? But I'm still paying interest on this tax write-off. Well, not only that, but 90% of taxpayers take the standard deduction. And if you do that, you don't get, you get no benefit from a tax standpoint on that interest unless you itemize.
And even then, you only get equivalent to whatever tax bracket you're in. So yeah, this one's a no-brainer here, Carlos. But listen, I appreciate you calling. You sound like a wonderful dad, and I'm excited to hear in the future what God has for you in this next season of life. Thanks for your call today. Hey, a big thanks to my team today, Dr. Robert Youngblood, Devin Patrick, Jim Henry, and everyone here at Faithful.
I couldn't do it without them. Hope you have a great day, and come back and join us tomorrow. We'll see you then. Bye-bye. The American finance is provided by Faithfi and listeners like you.
