This faith and finance podcast is underwritten in part by Eventide Center for Faith and Investing. They are an educational initiative of Eventide Asset Management that seeks to help Christians understand and practice biblically faithful investing. For a free list of faith-based funds from Eventide Center for Faith and Investing, visit faithandinvesting.com slash faithfi. Have you ever had a family member or friend ask you to lend them money?
Talk about being put on the spot. Hi, I'm Rob West. It's a tough situation to be in, and you should think and pray about it before deciding whether to lend or not. Today, I'll give you some advice from God's word to guide you, and then it's on to your calls at 800-525-7000.
That's 800-525-7000. This is faith and finance, biblical wisdom for your financial journey. Well, it's probably safe to say that being asked to lend money makes people uncomfortable.
It's often a big decision that has consequences no matter how it turns out. When you lend money to another, it changes the relationship. Proverbs 22-7 reads, the borrower becomes slave to the lender. Lending money can hurt a relationship, and that can happen whether you lend the money or not. You're between a rock and a hard place, and it seems like either way, someone may end up resentful.
There are really only three things that can happen, and only one of them is good. If you decide not to lend the money, the other person could be upset. If you do lend the money and the other person doesn't repay it, you'll probably be upset.
It's only the third possibility that makes everyone happy. You lend the money and the borrower pays it back. But consider carefully why they asked to borrow in the first place.
They may not be able to repay the loan if they're already in bad shape financially for whatever reason. Fortunately, the Bible has much to say about this predicament. First, God's word tells us to help those in need, lending money if necessary. Deuteronomy 15 8 says, you shall open your hand to him and lend him sufficient for his need, whatever it may be. Turning to the New Testament and the Sermon on the Mount, Matthew 5 42, Jesus says, give to the one who asks you and do not turn away from the one who wants to borrow from you. And finally, a verse that might make you think the only proper response is to lend money to a family member in particular is First Timothy 5 8, which reads, but if anyone does not provide for his relatives and especially for members of his household, he is denied the faith and is worse than an unbeliever. So do those verses mean you always have to lend money when asked?
Not at all. They imply two things. First, that there must truly be a need. And second, that lending the money would actually help the borrower and not simply allow that person to make more unwise financial decisions.
Here scripture has more to say. Proverbs 13 11 warns about one possible outcome with lending money. It reads wealth gained hastily will dwindle, but whoever gathers little by little will increase it.
Getting a loan is often the easy way out. Maybe the borrower tells you the loan would be a lifeline, which it may be, but it's also easy money and the borrower may not appreciate the effort it takes to create that wealth. When you have to work hard for something, you tend to want to hold on to it. Hard work produces character and wisdom.
Proverbs 21 20 reads precious treasure and oil are in a wise man's dwelling, but a foolish man devours it. So before you go get out the checkbook, think carefully about whether there's a real need. You also have to be sure that lending the money will actually help the borrower.
Here are some questions you can ask yourself. Can the borrower repay the loan? If there's not sufficient income or ability, promises to repay will come to nothing. Then ask what shape will you be in if the money isn't repaid? If you can't afford to lose it, then you can't afford to lend it.
Then ask can you help in another way? If the person needs money to repair a car, for example, could you give rides to work until they've saved enough for repairs? And last, ask yourself, can you make the money a gift instead of a loan? That way you're not expecting it to be paid back.
So you can't be disappointed and your relationship won't suffer. But again, only do that if you can afford it and the gift doesn't encourage more financial mismanagement. Finally, if you do decide to lend the money, drop a written agreement, even if you're lending to a family member. When something's in writing, it clarifies things and makes it known who's responsible for what and when. The loan agreement should specify the amount, interest rate if any, payment structure and collateral.
That will help eliminate misunderstandings later on. You can find lots of promissory note templates online, just fill in the blanks. One final thought if you end up lending the money, make preserving the relationship your priority.
Be prepared to forgive the loan if it keeps the relationship intact, but that's only possible if you have the ability to lose it in the first place. So those are some things to consider before lending money to a family member or friend based on the counsel from God's word. All right, your calls are next, 800-525-7000.
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This institution is not federally insured. I'm so thankful you've joined us today on Faith and Finance. We're looking forward to taking your calls and questions today on anything financial. We have the opportunity to invite you onto the program to ask the financial questions you're thinking about right now and helping you process those, encouraging you, but also directing you back to God's Word so we can look at a biblical worldview of money management in light of those daily decisions we're making.
And here's one of the realities. Money issues are heart issues. Jesus said where your treasure is, there your heart will be also. So we know that our heart follows our money. I experience that all the time, and I'm sure you do as well. When you spend money, you're more invested there. You're more attuned to what's happening. I see that play out in my life in college.
I have an oldest, my oldest son is a freshman in college. I write that check, my heart is with that university, and the same is true in our giving. You know, when we give, our heart is there. You know, as we allocate God's money daily, that's why every spending decision is ultimately a spiritual decision, and we want to look at those heart issues underneath the financial issues. You know, Larry Burkett would often say that the clearest indicator into someone's life spiritually in how they're doing is how they're handling money, because it's that tangible daily expression of what we value and where we've placed our trust. Well, we want to encourage you in that so that you can be that wise and faithful steward, but we also realize there's practical decisions that you're making every day, and so we want to help you tackle those.
So what are you thinking about today in your financial life? Give us a call. We want to talk about it. 1-800-525-7000, that's 800-525-7000. You can call right now. All right, let's dive in. We're going to begin in Pennsylvania today. Ezekiel, thank you for calling. Go right ahead. Thank you for taking my call.
I'm a long-time listener back in Larry Burkett days. Thank God for your ministry and the wisdom that God has given you in your ministry with faith ties. Thank you very much. Thank you. Yes, sir.
So this is my mortgage company, my former mortgage company transferred my mortgage over to a new company, and that's been a few months ago, and I received a letter in the mail from my former mortgage company that there was a breach in their system, and some of my personal information was taken from their account. And I just wanted to know, I don't know if I can mention the name of the, they set me up with a monitoring company. Yeah, and you can mention the name. That's no problem. Oh, Kroll. Okay.
K-R-O-L-L. Yes, sir. And I just wanted to make sure it is a legitimate company that I should share my information with before I do that. Yeah. And are they offering to cover those services from the Kroll monitoring for free as a result of this data breach? They are. Yeah.
For a certain period of time. I'm not getting what that is. Okay. Very good.
Yeah. This is absolutely a reputable company. They're one of the global leaders, not only in monitoring, but also in just corporate identity, protection, and cybersecurity. So they're absolutely a legitimate company. You know, my general recommendation is not to pay for these services, just because, you know, by using best practices, you can often accomplish much of what they're going to do for you. But whenever there is a breach, and unfortunately, these are happening more and more, no one is immune to it. I mean, here, the county that I live in just experienced in the last 30 days, a data breach, we're seeing it at the government level, the biggest, you know, institutions and even tech companies in the world are not immune to this. So it's going to continue to happen when it does, usually in, you know, their attempt to preserve their relationship with you and garner trust, they will offer these credit monitoring services for free. And I think you're, you're doing the right thing to make sure first of all, is this legitimate? And yes, it is. And then secondly, because they're offering it, I take full advantage of it. Now beyond, you know, a season where you have this being paid for by somebody else, you know, I think you can do a lot of this yourself. And, you know, there was nothing you could have done to prevent the breach. But you know, by following some key best practices, and I'll share a few of those in a moment, you know, you're going to do a lot toward protecting yourself from ID theft.
But I think absolutely, I would take advantage of it. Ezekiel. Oh, great. Great. Appreciate that.
Yes. Okay. I feel a lot better now.
Good. Well, I'm glad to hear it. Listen, appreciate your kind remarks about Larry Burkett, sir. I share your sentiment, Larry is just one of the wisest and gentlest giants of the faith I ever knew. It's amazing to me that not a week that goes by today and here we are 21 years beyond Larry's death, that someone doesn't mention the late Larry Burkett and so grateful to have you on the program, sir. If we can assist you further in any way, don't hesitate to call me Lord bless you. Let's head to Tennessee. And Brian, go right ahead. Yes, sir.
Thanks for taking my call. Quick question about Social Security as it relates to my wife, who has not worked since we had children. Right. So that's been 30 years or so. She did have some employment prior to that, is there any, will she be able to collect any Social Security at 65 on her own?
Yes. So long as you are or the spouse is collecting benefits. So the way this works is Social Security spousal benefits are available to a spouse who has never worked. It's generally 50% of the working spouses benefit. The non-working spouse has to be at least 62, but if they claim benefits early, like 62, and before full retirement age, it would be reduced by about 8% a year. So for instance, if a spouse takes it at 62 instead of 66 and a half or whatever their full retirement age is, they'll get instead of 50%, they'd get more like 32%.
And then the other spouse does have to be collecting his or her benefits for the non-working spouse to qualify for benefits. So you mentioned 66 and a half. So if I start collecting at 65, that's the early, well, you can collect at 62, right? But the kind of a sweet spot is 65, is that right?
No, the sweet spot is really, you know, full retirement age. And so depending on when you were born would determine what your full retirement age is. It's 66 if you were born between 43 and 54. And then it gradually increases if you were born between 1955 and 1960, it goes up to 67.
Oh, okay. Yeah, I was born at 66, so that would even be higher than that then, it sounds like. Well, it doesn't go any higher than that. So you'd be at 67. 67. Yeah. Oh, okay.
And so that would be currently based on the law, that's your full retirement age. I got you. Okay.
So I didn't find anything definitive online, but I did rate the 50% that you mentioned earlier. Yeah. Well, I'm not calculating anything into our retirement for 65, planning on being able to replace 80% of my income with no debt, right? So I should be on target for that, which is curious what her contribution might help on top or a little extra, if you will.
Well, I like the way you're thinking, Brian, because yeah, I mean, if you could cover your pre-retirement income with just your Social Security and then whatever retirement assets you have, whether that's a pension or a 401k or both, and then hers is just kind of a bonus on top, then absolutely, you're going to be well-planned. Yeah. Yeah. Perfect. Thank you for the input.
All right, Brian. Thanks for your call, sir. Hey, if you're looking for an advisor who shares your values, we recommend the Certified Kingdom Advisor designation. These are men and women, now 1,500 of them and growing, that have met high standards and character and competence. They've been trained to bring a biblical worldview of financial decision-making and could be just what you're looking for if you'd like to invest or plan God's money aligned with your values as a believer. Just head to our website, faithfi.com, and just click Find a Professional at the top of the page. All right, a quick break and then back with more of your questions just around the corner.
Call right now, 800-525-7000. We'll be right back on Faith and Finance. If you enjoy this radio program, you're going to love all of the many different resources waiting for you at faithfi.com and the Faithfi 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.
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Soundmindinvesting.org. Grateful to have you with us today on Faith and Finance. We're taking your calls and questions today, 800-525-7000, that's 800-525-7000. We'd love to hear from you. Let's go right back to the phones.
To Louisiana. Hi, Andy. How can I help, sir? Yes, sir. You kind of hit on those protection programs like LifeLock and other ones.
I know some of them have a better rating than LifeLock. If you can afford that, is it good to have that? I know you said you could do a lot of that stuff yourself, but if you can afford it, is it a good plan to have that?
Yeah. You know, it's never a bad idea, just given how prevalent these challenges are, Andy, and they seem like they're growing all the time. So yeah, if you can afford it, certainly it would be better than not having it. I guess the only potential downside, if there is one, other than the cost, because it can get pricey, especially with LifeLock, and if you add a second person onto it, it begins to add up.
Their premium service, I think, is $70 a month for two adults, and so you're getting up to around $850 a year, which is a lot of money. Now they're going to provide you up to a million dollars in reimbursements for stolen funds and personal expenses if your identity is stolen. They're going to not only monitor your credit at all three bureaus, but they'll even monitor investment accounts, they'll monitor your home title, they'll alert on crimes in your name, they'll obviously scan the dark web for your information. I think maybe the only other potential downside, if this is one, and you may not be concerned about this, but you may just start to ignore some of the alerts because you become accustomed to receiving them, and then maybe you become lax about your own what I'll call cyber hygiene because you believe it's being taken care of, and so maybe you're less prone to change passwords and freeze your credit and check your credit reports and things like that because you're like, well, I'm paying all this money, why would I do all of those things? But all things being equal, never a bad idea to have some protection just because it's making you more vigilant. You've got an entity out there that's out there scouring the web for your information and it's never a bad idea to have those notifications if they're available. So with LifeLock in particular, they have partnered with Norton, and so it's Norton, which is the antivirus software. So it's more than just credit and identity theft monitoring because Norton's been in the business of antivirus software for computers for a long time. They're one of the biggest in this space, and so that's going to add that element to it as well. So I guess bottom line, never a bad idea to have it, but it can be expensive.
So if you're on a tight budget, I would say just focus on the things you can do yourself. Does that make sense? Yes, sir, it does, and I sure appreciate your input on that. Absolutely. Andy, thank you for calling, sir. May the Lord bless you. Let's head to Chicago. Hi, Nikki. Go right ahead. Hello. Hi. Thanks for taking my call today.
I just had a question. I see the settlement for like 170K, and I was just trying to see like what's the best way to invest or how should I go about investing. I do currently like, well, I'm 49, I have a 401K with my job. I think that's probably close to 400K, and I have like a savings account, probably about $80,000, and I really don't have any debt.
I do have a car payment, but other than that, no credit card debt or anything like that. So I was just trying to see like what would be the best way to. Yeah. Well, it sounds like you're doing great to me here, Nikki. Have you ever done any retirement planning to determine kind of what your ultimate savings goal is?
I have not. Okay. Well, if you don't mind, Sharon, what's your income annually, roughly?
Probably about 100K, a little over that maybe. All right. And are you single? I'm not single.
I'm married. Okay. And then what does your husband earn? He probably earns about, I don't know, maybe I'll say like maybe 80 or something like that. Okay.
Yeah. So your typical goal would be 10 to 12 times your income, and I realize this number might sound a little scary because it's a big number, but that would put it at 2 million being your ultimate goal. Now, you mentioned the 400,000 and the 80,000 you have in savings, does he have some retirement savings as well?
He does. I don't know exactly like what the exact number is, like for 401K. Yeah. I mean, the good news is you guys are still quite a bit away from retirement. You're debt-free, you've already built up quite a bit in the way of assets, you've got plenty of liquidity in savings, and if he's got some retirement assets as well, I mean, you guys could be, maybe you're at three quarters of a million dollars or something like that. So if you continue to sock money away, it sounds like you'll have plenty. I think the question is, to your point, what to do with the roughly 170 that's coming your way. I think the first question is always, is there anything that the Lord's laying on your heart with regard to giving?
I would do that right off the top. Beyond that, if you want to put it to work, I'd try to get it inside a retirement plan if you can, if you want to make it long-term in nature. So one approach there is if you're not maxing out your employee-sponsored plan at work, your 401K, what you could do, even if by maxing it out and increasing your monthly contribution, even if that were to cut your check so much that it required you to pull some from the 170, I'd do that because that would, in a sense, be a way that you're shifting it.
Let's say you had 170,000 in savings, and you increase your 401K contribution by 10,000 a year, and so you'd pull 10,000 a year out of the 170 to supplement your income, and essentially you're moving it from one bucket to another, except when it goes into your 401K, now you're getting a tax break for it, and it's going to grow tax-deferred. Let me ask though, do you know if you're maxing out your 401K right now? I think my job matches like 4%. I think I'm doing like 5% now. So you're probably not then, because for 2024, you can put in $23,000, and that's just your portion, that's not the employee match, and so if you're not putting in a full $23,000, that would be an opportunity for, again, you to bump it up so that you're maxing it out, and then if that cuts your check down too low, where you're not able to cover your bills, then you'd pull that from the 170.
So that's one strategy. The second would be just investing it straight out, right, and if you wanted to do that in just some high-quality, no-load mutual funds, our friends at Sound Mind Investing can help with that, soundmindinvesting.org, the SMI newsletter would give you some great suggestions each month on which funds to buy or sell. You could also hire an advisor to manage this portion of your investments, and for that, I would head to our website at faithfi.com and click find a professional.
So hopefully that gives you a few ideas on how you can get it into the 401K, how you can invest it on your own, or how you could deploy it through a certified kingdom advisor. God bless you, Nikki. Thanks for calling.
Well, that does it for us today. I'm Rob West. Thanks to our amazing production team and to you for listening. I hope you'll join us again next time right here on Faith and Finance. Faith and Finance is provided by Faithfi and listeners like you.
