Many people are using the FaithFi app to help provide the wisdom, community, and money management to stay on track, financially speaking. To date, over 37,000 members are using its digital envelope system, participating in our community forums, and engaging in virtual workshops. And one of the most convenient features is the ability to keep all your accounts in one place for an easy-at-a-glance view. You can choose from one of three options, depending on your management style, and it's available on desktop or mobile.
Go to faithfi.com and click App to get started. The philosopher of baseball, Yogi Berra, once said, If you don't know where you're going, you'll end up someplace else. Hi, I'm Rob West. So it's important to plan where you're going, and financially, that plan is called a budget, planning where your dollars will go. But there may be some dangers associated with budgeting, and Chad Clark joins us to talk about it today. Then it's on to your calls at 800-525-7000.
That's 800-525-7000. This is Faith in Finance, biblical wisdom for your financial journey. Well, it's always fun to have Chad Clark on the program. He's executive director here at FaithFi. Chad, great to have you in the studio today.
Thanks for having me. Chad, as you know, there are some dangers when it comes to having a budget. And by the way, folks might be surprised to hear us say that. So why don't you explain? Yeah, you don't typically hear us talking about the dangers of budgeting. And let me just start by saying that this is not an excuse not to have a budget.
So let's just clear the air here. What we're talking about is that there are some warning signs, some warning labels that we need to be aware of. So if we purchase a tool, it usually comes with some warning signs, some warning labels.
My wife and I were originally from New Mexico. Not a lot of trees out there. We moved here to Atlanta and lots of trees. And one of the tools that we use a lot out here is a chainsaw. Chainsaw comes with a lot of dangers and some major warning labels on it. And those are just to help keep you safe and keep other people safe.
And so that's what we're talking about here is we're not saying that a budget is a bad thing by any means. Just like a chainsaw is not a bad thing by any means. But we have to make sure that we're aware of some of the dangers if we don't use it properly.
That's exactly right. If you want to cut down a tree, you're very glad to have a chainsaw. So let's slap some warning labels on our budget. What do we need to be aware of? Yeah, we're going to talk just about three dangers that we need to be aware of when it comes to using a budget. Again, these are not excuses not to have a budget, just things to be aware of so that we can overcome them and we can use the tool properly. The first one we're going to look at is a budget can lead us to idolizing money. So we encourage people when they use a budget that it becomes a part of their daily rhythm. But by doing that, you can really start to idolize money as you watch every dollar and where it's going.
And it can actually cultivate this love of money if we're not careful. But we can overcome that idolization of money by renewing our mind and God's word and reminding ourselves that God is our ultimate treasure, that our hope is not found in money and possessions. The second danger that we want to look at is pride. When we have a budget and we can start to see success in reaching our financial goals and milestones, pride can start to well up within us.
But ultimately, we are not to boast in any of our own abilities. It is God who gives us the power to create wealth to achieve these goals. And so we should always be overcoming that temptation to pride and boast in self and just turn back to the Lord and give thanks to him for all things. And then the final danger is relying on the budget more than God. When we have a budget, we start to make decisions off that budget and that's great and we encourage people to do that. But when we feel the prompting and the leading the Holy Spirit to do something beyond our budget, there's a temptation to use the budget to override what God is calling us to do. So, for instance, if you're called to give and you go back to the budget and you go, well, God, I can't give that much. You should discern, well, am I going to listen to the budget or am I going to listen to God? Or if he's calling you to take a new job or to take a step of faith, let's make sure that the budget does not restrict our trust in God. But we maybe take the budget to him and say, God, I don't see how this is going to work out. But just like in Malachi 3, he says, test me, bring the whole tithe to the storehouse and he's going to show you just how powerful he is.
I love that. So we have to be on our guard against idolizing money, against pride and relying on our budget more than God. But if we do that, a budget, as we said at the top, is still a very valuable tool. And I can't help but think that the FaithFi app would help us to budget in a way that honors the Lord because of all the other resources that are there. So for someone in our audience, Chad, who's not familiar with the FaithFi app, quickly explain what it is. Yeah, we built the FaithFi app really, again, just as a tool.
We want to help you on your stewardship journey. But like we just talked about today, we want you to be aware of some of the dangers that come with using any tool, but specifically a budget to make sure that you're not idolizing money, but that you're putting your hope in your future. And your ultimate treasure is only found in the Lord. And that money is just a tool for his kingdom and his purposes. That's what we designed the FaithFi app to help you steward his resources well for his glory.
All right, we're still close to the beginning of the year. This is a great time for you to start budgeting in a God-honoring way. The FaithFi app can help you do it. Download it today at faithfi.com.
Just click app or search for FaithFi in your app store. Chad, thanks for stopping by. Thank you.
All right. Back with your calls just around the corner, 800-525-7000. I'm Rob West, and we'll be right back. Stick around.
We'll be right back. 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. Welcome back.
This is Faith and Finance. I'm Rob West. We're taking your calls today, 800-525-7000. That's 800-525-7000. All right, let's dive into your phone calls today. I'm ready, and we're going to begin in Clemson, South Carolina.
Mike, go ahead, sir. I have enough money to actually get an advisor, a CKA, to help me, and it'll be a big help to me. I think I found one close by, and he does use Charles Schwab. I'm just curious about the different custodial accounts. Can you have a faith-based type of investing?
I'm just curious. I know you can't be perfect in all your investing and everything, but generally, would I be able to stay away from the Planned Parenthood or pharmaceutical drugs that cause abortions and things along that line? Absolutely, Mike.
It's a great question. Yeah, you'll find that Schwab and Fidelity, among others, are some of the more popular brokerage firms that a fee-only Registered Investment Advisor might use. Others would include Edward Jones or LPL or even the big wire houses like Merrill Morgan and others. You absolutely will have plenty of access, or your advisor will have plenty of access to the faith-based investing fund families. And the exciting thing is, Mike, that this whole space of faith-based investing, that is selecting investments, either selecting individual stocks or buying a mutual fund that is faith-aligned, that whole space of faith-based investing is really just taking off. There's 55 new products, so new ETFs, new mutual funds, just in the last three years. And these are world-class investments getting phenomenal returns, very consistent with what their peers taking a secular approach might find, but where they're intentionally aligning the investment selections, the deployment of capital, your capital, with Christian values. And that includes both avoiding companies that are misaligned with your values, you mentioned a few of those categories, or in addition to that, they will also select intentionally companies that are promoting human flourishing or really focusing on a kingdom impact outcome. So, yes, Schwab will be a great platform for that. But the key is to have that advisor who has, as a part of his or her practice, the ability to select faith-based investments based on your values and working with you to build a portfolio that's consistent with that.
But nothing about Schwab would prevent the advisor from doing that. Okay, that's wonderful. Okay, well, thank you very much for that input. All right, Mike. God bless you, my friend. Thanks for being on the program today. Let's go to Tampa, Florida. Hi, Stacey.
How can I help? Yes, I had a concern about a vehicle that I have. So, right now, it's financed within two years, but I was in car accidents, a couple of wrecks.
My last one was back in February. So, of course, that caused my insurance to be now close to $900. So, with my car payments and insurance in total, I'm paying roughly $1,300 for a car, and that's more than just one paycheck that I make in two weeks. So, it's not making sense for me to keep the car.
So, I've been talking around. I just want to know what's the best option, if I should, like, return the car to the loaner and just be responsible for the rest that's owned, because since I broke the lease, they add the lease on top of the financed car. So, the car is worth more than what it's really worth. So, I'm, like, really stuck in a sticky situation.
I'm not really sure what to do. All right. So, how much do you owe on this car today?
About $23,000 less on the car. All right. Okay. And have you run a private sale, Kelly Blue Book or Edmunds Value on it? Do you know what it's worth?
The estimate was, like, $11,000. Oh, wow. Okay. All right. Yeah. Yeah.
Okay. So, you've got a couple of options. I mean, number one is, you know, you just continue to make the payments and you drive it until you pay it off. Obviously, just given how high it is because of the car insurance. Now, that's not going away. I mean, you could shop this around and see if, you know, another insurance carrier to win your business, you know, might come in lower.
And even though it may go up over time, it might be worth shopping around. But, you know, because of your recent accident, there may or may not be able to improve that. But that's going to follow you, obviously. And so, you're going to need transportation. If you were to, let's say, turn it in, and I'm not saying you necessarily should because that's going to result in, you know, you having this deficiency balance between what they're going to sell it for at auction, which is going to be a lot lower than the $11,000, and what you owe.
And if you don't pay that, then they'll seek a judgment against you. And, you know, that could get pretty messy. But, let's say you were to turn in the car, what would you do to get to work and so forth? What's your plan at that point? It was an option, like, to carpool with my brother-in-law to work, but then that would mean for me, like, to kind of, like, move into my boyfriend's place. And then my mom also suggested for me to get, like, a scooter to drive around because my job is only about 30 minutes away. All right.
Well, I would say let's not pursue the plan to move into your boyfriend's place. Let's try to keep you on your own. And I think you're exactly right. I mean, you're going to have to get creative here. You know, maybe it's the scooter option. When you do your budget, you know, are you able, let's say you weren't to have the car payment and the car insurance, you know, do you have a surplus every month at that point? Like, right now, if I'm going to be frank, I only have $20 in my account right now, and I just put $35 worth of gas in my car to fill it up. And I get paid on Friday. My next paycheck is on Friday, but then that Friday, I'm going to put like $800 towards my car for this month's payment and last month's payment.
Yeah. I mean, obviously, it's a really difficult situation because there's just not a lot of money there. I mean, your expenses I expect are as lean as they could be, given that you're living with your mom, even though you're contributing a portion, you know, toward your housing expense.
This car obviously doesn't fit into that, and you're way upside down on it. So let's do this. You know, I think it really is going to involve someone helping you kind of dig into those numbers and just trying to help you create a path forward. You know, it may involve you having to get bankruptcy protection, but that's an additional expense, even if you, you know, try to make good on paying all of this off over time. So I think the next step is just to, you know, have somebody walk alongside you as you get all the numbers in place, look at all the different options, see if we can get a, you know, the credit cards into a credit counseling program, see if we can work with your lender to perhaps turn this in and get you on a smaller payment plan. You know, look for a scooter, maybe somebody at, let's just start praying about this.
Maybe somebody at your church would be willing to bless you with an old car. I mean, you know, we need to trust the Lord in this. You need to do your part the best you can. And let's just see how the Lord shows up in the midst of this very difficult situation. But what I would say is let's continue to honor him with each of your decisions. So not moving in with your boyfriend, really, you know, continuing to trust him and be faithful with what passes through your hands. So you're, you know, doing your part to just live as lean as you can.
Look for other opportunities to bring more income in, whether that's picking up a second job or maybe find it something you can do where you're working remotely from home so you're not having to, you know, commute and save that money. I mean, we're going to need to get creative here. And, you know, obviously the Lord is going to have to intervene in a very difficult situation. So let's do this, Stacey. I'm going to ask you to hold the line and I'm going to put one of our certified Christian financial counselors in touch with you just to work through your financial situation.
There's not going to be any cost to this. We'll pick up the cost for it. And let's just see if the two of you can't come up with a plan to get you pointed in the right direction. And we're going to trust that the Lord is going to intervene as well along the way. Because ultimately our trust is in Him, right?
Because He is your provider, no one else. So, hey, keep us posted and we'll be praying for you. I'll ask our faith and finance community to be praying for you as well. And thanks for your call. We'll be right back. We'll be right back. You're listening to Faith and Finance, where we talk about how we handle God's resources.
How are you using God's resources? We're talking about it and the lines are open to take your calls and questions. 800-525-7000 is the number to call. Let's go to Tidewater, Virginia. Joe, thanks for calling, sir.
Go ahead. My question was about refinancing a mortgage, a recent home buyer. And we were able to put a significant amount down, but we're in a 30-year mortgage, right about a little over 5.5%, 5.625. So about $140,000 on the house, that's about 18% of the value. I was wondering how, if you'd give me your perspective on how I should think about refinancing and at what point that becomes a wise move. Yeah, it's a great question.
I love that you were able to put so much down, Joe. I mean, obviously, with rates where they are now, you're not excited about that 5.625 rate. And so it could make some sense, especially given that this is a 30-year loan for you to refinance. Probably going to not be next year.
It would probably be the year following before it would make sense. But let's talk about that. Do you anticipate, Joe, first of all, being in this home for a long time, just based on what you know today? I do, yes. Okay. What is your age currently?
54. All right. So this could be, in effect, your retirement home, right?
Correct, yes. All right. And would you anticipate paying this off at a more aggressive rate than the 30-year amortization, or do you think you'll just let it play out with the consistent monthly payments? We've been saving and we're reducing the principal by about $2,000 a month. So, yes, paying it off an accelerated rate. Okay. So $2,000 in addition to the scheduled monthly payment? Okay, great. And have you run the amortization schedule to see how much quicker that would allow you to pay this off? Not that I could give you an answer. I know that I suspect that is true, but I don't know how much exactly.
Okay. I mean, let me just run some quick numbers here. It looks like that you could pay that off with an extra $2,000 a month starting this month, $5.65, $140,000. It looks like $2028.
So, here we are, 2024. So, I mean, we're talking within four years on your current track, you could have this paid off, which is great. Now, at $5.625, you're going to end up paying a total of $46,000 in interest if you were to continue this $2,000 a month. Normally, we say you'd want to be able to save a percent and a half. So, that would be, you know, $4.125 would be when you'd want to refinance. And if you stay on this current track, but we drop the rate to $4.125, you know, it looks like, well, excuse me, I made a mistake there.
So, $5.6, let me just do some numbers here real quick. It looks like your total interest is about $20,000 that you would pay, a total of $46,000 including principal and interest, but the interest only portion would be about $20,000. And at $4.125, you would pay a total of $14,000 in interest. So, you'd save about $6,000.
Now, here's the kicker, though. The cost to refinance can run anywhere from 3% of the loan all the way up to $6,000. So, that's anywhere from $4,000 to $9,000 on a $140,000 loan.
Now, I realize it's coming down quickly, and so that number will change. But if we just look today at you spending, you know, essentially, you know, $5,000, let's say on the low end to refinance it, in order to save $6,000 in interest, given how quickly you all are going to pay this off, it just doesn't make sense. So, you'd probably need to save, you know, at least a couple of percentage points, and you'd need to do it in the next, you know, 12 to 18 months in order to make this make some sense.
But at the end of the day, you know, you're probably going to find that just given how quickly you're trying to pay this off, there's just not a whole lot of reason for you to make the extra effort to refinance it, just given the cost that goes along with that transaction. Does that make sense? It does make sense. And I appreciate you articulating that.
I was wondering how that would break according to what you and Larry Burkett and others have articulated. So, thank you for that answer. Awesome. Joe, God bless you, my friend. We appreciate you calling today. Let's go to Ohio.
Hi, Christie. How can I help? I just wanted some information about my son. He's 17. He lives at home. This is his first job and he makes about $30,000 a year and he has no bills and he's wanting to know what he can do to invest his money to make money off of that money.
Yeah. Well, I love that he's thinking about that now. I think the key is for him to start learning early God's way of handling money.
So, when you're done here, hold on the line. I'm going to send you a copy of Howard Dayton's book, Your Money Counts. I want you to give that to him as our gift to him, just to begin to introduce him to not only wise money management skills, but also how God's word speaks to just the whole topic of finance and how we ought to think about managing God's money. Secondly, I think the next step is to really earmark the savings that he's accumulating, and that's great, for specific goals. So, he might have an emergency fund bucket where he's got maybe $1,000 or $2,000 because he probably doesn't have a lot in the way of expenses that's just purely for the unexpected. And then he might have a couple of additional savings buckets that are for a specific purpose.
So, he might be looking down the road to when he was moving into his first apartment, or he wants to buy a house, or he needs to replace a car. If he has any of those, he ought to save for those along with the emergency fund in a high-yield savings account. He can get 4.5% right now with an online bank with FDIC insurance, and at least he's making some money even though it's liquid and safe. Now, beyond that, given that he's working, the very best tool is a Roth IRA. And this will be a way that he can put in after-tax dollars into a Roth IRA. And this year, 2024, the contribution limit has gone up $500, so he can now put in up to $7,000 in 2024 as long as he has that much in earned income, which it sounds like he does. And what I'd probably do is just open an account at Fidelity or Schwab. He could use one of their robo-advisors like the Schwab Intelligent Portfolios, very low cost, and he could even set up an automatic transfer into that Roth IRA every month, and then it would systematically invest it in some index ETFs. He could also look at some of the faith-based investing funds, which, again, there's some wonderful funds out there like Eventide and One Ascent and Praxis and Guidestone and Timothy and others that are specifically choosing investments that align with your Christian values, and they have wonderful performance. And you could find those fund families if you click on the show when you visit our website at faithfi.com. But I like this idea, Christy.
I'd start with the emergency fund, then planned savings buckets, and then finally a Roth IRA and have him set up a systematic contribution there. Hey, stay on the line. We'll get your information to send you that book.
Well, we're almost out of time. If you liked today's program, why not share it with a friend? And while you're at it, share the FaithFi app with them as well. Help us get the word out. Thanks for listening and sharing, and I hope you'll come back and join us again next time for another edition of Faith and Finance. Faith and Finance is provided by FaithFi and listeners like you.
