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Go to faithfi.com and click App to get started. People come up with all kinds of reasons not to budget, but none of them are very good. Hi, I'm Rob West. Today we'll go over some of the many reasons folks come up with to live without a spending plan.
It's sort of like walking a tightrope. And I'll have some very good reasons why everyone should budget. 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. Okay, let's start with the biggest reason why you should budget, and that's because it's a biblical principle. Now, you won't find the word budget in the Bible, but it does say a lot about stewardship, and budgeting is stewardship. Having a spending plan and sticking to it is the only way to control your money, stay out of debt, and gain peace of mind about your finances. When you practice faithful stewardship, you no longer have to worry about your money because you've accepted that it's God's money.
He owns everything. So budgeting is a key part of stewardship. When you live on a budget, you know where your money is going because you've planned it ahead of time. Proverbs 27-23 puts it like this, know well the condition of your flocks, and give attention to your herds. Of course, back when that was written, flocks and herds were money. And perhaps the verse most associated with budgeting is Proverbs 21-20, precious treasure and oil are in a wise man's dwelling, but a foolish man devours it. People without a budget often end up living paycheck to paycheck. So those are just a few of the many reasons why everyone should budget. Now, let's look at some of the reasons why folks say they don't. One that you'll hear a lot is, I'm terrible at math, so I can budget.
Well, good news. The Faithfi app will do all the math for you. You can download it at faithfi.com or anywhere you get your apps. Just look for Faithfi, Faith and Finance. By using the app, you can set up a budget in no time. Another top excuse is, I make plenty of money so I don't need to budget. Well, what if you suddenly stopped making plenty of money because you've lost your job?
People are surprised by layoffs every day, especially today, with predictions of a looming recession. That's why everyone needs three to six months living expenses in their emergency fund. Try saving that up without a budget.
Here's another one. I'll always have unemployment benefits if I lose my job. You would only think that's a good plan if you've never relied on unemployment benefits before. Odds are they won't come close to what you were making. So again, get on a budget and save up an emergency fund.
Now, this next one is probably true for a lot of folks. It's, I'm afraid to set up a budget. They don't want to know how much they've been spending on things they may not really need. It's always a shock to discover how much you're overspending on things like groceries and eating out.
But it's necessary because it gives you a starting point. By planning meals more carefully, you can trim your spending. That will free up discretionary income that you can put to better use somewhere else, like your emergency fund. Here's another. Some folks say they've tried to budget, but it didn't work.
That dog won't hunt either. Almost everyone living successfully on a budget will tell you it didn't work at first. Your spending plan will always need to be adjusted at first. Just keep trying. Learning to live on a budget is a life-changing experience. It's worth the effort.
Okay, last one. I don't need to budget because I've always got money left over each month. Well, with the inflation we're seeing now, you've probably noticed you have less and less left over at the end of the month.
There's also something called lifestyle creep. It means the more money you have available, the more you tend to spend. Raises and tax refunds get gobbled up quickly. Then, if you suffer a loss of income, you'll wish you'd saved that money. If God has blessed you with more than you need right now, that's even more reason to use it wisely. A spending plan will also help you to be more intentional with your giving.
It's all God's money anyway, and we should use it to give glory to Him. What a lot of non-budgeters don't realize is that most people eventually do learn to live on a budget. If they don't do it voluntarily, they'll eventually be forced to by debt. The trick is to set up a plan for spending wisely before that happens.
And when you stick with it for a few months, you'll discover that it isn't really limiting, but liberating. You have the same amount of money, you're just deciding ahead of time where it goes. One financial commentator put it like this. A budget is like a fence around your money. It protects it from impulse spending. You can still spend money on things you enjoy as long as you stay on budget.
You can hide behind your budget fence and avoid a great deal of financial danger. By the way, again, you can download the Faithfi app at faithfi.com. All right, your calls are next, the number 800-525-7000.
Call right now. membership eligibility required. Each account is insured up to $250,000.
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And you can too. Create your free Faithfi account by going to faithfi.com and click sign up to begin receiving weekly wisdom in your inbox. Welcome back to Faith and Finance. I'm Rob West. We've got a few lines open today.
800-525-7000 is the number to call. Let's head to Canton, Ohio. Hi, Becky. Thanks for your patience. Go ahead. Hi there.
Hi, thanks for taking my call. So my husband and I have two rental properties that sit side by side. And these properties sit right in front of where a new school has been built.
So about a year ago, the school district came to us and said, we don't have to have your properties, but we wouldn't mind having your properties. We'll give you the appraisal value. So we chose the appraiser and they paid for the appraisal. They came up with an appraisal of $150,000 per house. So $300,000 total. At that time, we said, OK, thanks, but no thanks.
We're going to hang onto these for a little while longer. So the school has come to us again and said, again, we'll give you appraisal value. We owe about $18,000 on the one, about $20,000 on the other. So we're trying to decide, would it be wiser to sell these properties to the school? Of course, pay them off. We would have enough money to pay off our own home. We owe about $100,000 on our own home, leaving us with about $150,000 left, which we could either buy another rental property or invest it elsewhere. Or do we keep the rental properties and let our renters pay for them?
They'll be paid off in about 18 months to two years and then just use the rental income as income in our retirement years, which would be a wiser thing to do. Yeah. You know, they both have their upsides for sure.
And you've described some of them. I think this ultimately comes down to recognizing that, you know, the purpose of money is not to have more of it. It's to accomplish a set of goals driven by our values.
So as you and your husband take a step back and really talk about your goals, how did those enter into this equation? Because, you know, if your goal was, well, we just really have a conviction to be debt free. Well, liquidating these properties could allow you to get out of debt once and for all. And then, as you said, maybe even buy another property for cash or invest that money. Another goal may be, hey, we want to spend more time traveling or with our family. And well, if we got out from under these properties, we'd no longer be landlords. And so therefore we'd have more time freed up where we're not dealing with marketing these properties and fixing the problems that come up along the way and collecting the rent and all of those things that go along with it.
And we could redirect that time and energy somewhere else. So are there any goals that you have that would inform this decision, given that both of them are viable choices and bring great upside in either case? Yeah, I think for myself, emotionally, the thought of being debt free sounds amazing to me. And my husband agrees. However, I guess just all these years in our marriage, we've always thought that these rental properties would be another income source for us after we're both done working. So I guess it's a win-win situation.
You can't go wrong either way. But we just want to make the wisest choice. We're seeing our 401k just completely stagnant for the past several years. And so we're thinking, do we pour this extra money into the 401k or do we find a better place to invest it if we did sell?
Yeah, absolutely. So let me ask a couple of questions. What do you have in your 401ks, all retirement accounts together, roughly? 401k has about $375,000, $380,000. We have a couple other mutual funds and things totaling around $60,000. Okay, very good. And you said the proceeds from these home sales after the mortgages are paid off would be roughly what?
About $150,000. Okay. And did you say you're also on track to have these rental properties free and clear if you just continue on in what period of time?
Around 18 months to two years. Okay. So you'd be debt-free except for your primary residence in two years.
And then at that point, you could redirect that money if you're not relying on it to live on toward accelerating your primary mortgage payoff, correct? Right, right. Yeah.
All right. And how long do you all plan to continue to work? How far off is retirement? Oh, probably another 15 years. Okay, got it.
Yeah. And is there a part of this? I mean, I heard you say we like the idea that these could be income-generating assets in the future. We also love the idea, especially you, of being debt-free. I didn't hear anything about we really just don't want to be landlords anymore.
That's not a part of this equation? It's really not. We've been very fortunate that we've had really good tenants.
My husband is able to fix a lot of stuff on his own, so I know he doesn't love fixing everything, but really, we've been very fortunate as far as minimal problems. Yeah. And even with the debt service today, are these cash flow positive? Yes. Okay, great.
Yeah. You know, I mean, again, I think you can go either direction here. I think ultimately this comes down to you and your husband maybe taking a week and separately just praying and asking the Lord to give you some wisdom here, and then maybe at the end of the week, you guys come back together and compare notes on what he's telling you. I mean, at the end of the day, one or both of you just has a conviction, let's get out of debt, and we're really excited about that, then I'd say, sell these things, pay off all the debt, and don't look back.
If that's not where you're coming out, then I kind of like the idea of you being debt-free with the rental properties in 18 months to two years, taking all that money and now putting it on the house, and now in a reasonable period of time, well before retirement, you own your home, you own these two rental properties, and now you've got, let's say, you know, 10 years from now, a half a million dollars in investments, you got two properties that are cash flowing, at any point you could sell them, but you've got diversification among those asset classes, so you're not all in stocks or bonds, you got stocks and bonds and real estate, you've got no debt, and then you're really well positioned for retirement. I think that's my preference, but what trumps all of that is if you pray about this and feel like the Lord's leading you to be debt-free. Becky, give me your thoughts on that. Yeah. Well, I mean, I guess we're in a really good situation.
We have a good problem here on our hands. Again, I could go either way. I think emotionally, I love the thought of having no house payments, but I hear what you're saying that maybe it's wise to just let our tenants pay this off in a couple years and then take all that money and throw it at our own mortgage. Exactly.
Yeah, I don't know. We do have another rental property that's paid for, so we do have a little bit of a rental income coming right now, so that also helps. Another piece that I like about this is most of the economists and market analysts that I trust think we're entering a period here where the stock market is not going to do a whole lot. It's probably going to be more of a sideways market in the next decade, more so than what we've seen in the prior two decades where we had some really healthy year-over-year annualized returns. And so just given the housing shortage in this country, I think real estate is going to continue to do well. So I just like the diversification of you having two buckets of money. You've got your real estate portfolio, you've got your stocks and bonds, and they're both growing.
And especially if in a reasonable time period you can be debt-free in both scenarios, I like keeping the flexibility of continuing to own the real estate, and if at any point you want to be done with it, you could sell them, but I don't think you have to do that now, and I think there's some wisdom in hanging on to them. That's just my take, though. Okay. Well, very good. I really appreciate that.
Absolutely, Becky. Thanks for calling. All right. Thank you. Bye-bye. Hey, just after this break, we'll be back with a lot more of your calls and questions.
Stay with us. This is Faith and Finance. Are you struggling to fit your faith into your practice as a Christian financial advisor? The Certified Kingdom Advisor designation teaches you a step-by-step process to confidently deliver advice that aligns with Christian values. Discover the skills you need to help your clients make a kingdom impact. Get started today by enrolling in the CKA Educational Program at kingdomadvisors.com, slash, get certified.
That's kingdomadvisors.com, slash, get certified. Many in the Middle East are going through horrific circumstances and are seeking refuge in Lebanon. Heart for Lebanon is bringing them hope, and now you can help. We endured shelling and hunger.
We witnessed death everywhere. $116 brings emergency supplies and the hope that only comes through the Gospel. I want to spend the rest of my life telling people about Jesus and His salvation. Give now at faithfi.com, slash, lebanon, or call 888-201-5577. Welcome back to Faith and Finance. I'm Rob West, and we're looking forward to taking your calls and questions today on anything financial. The number to call, 800-525-7000.
Again, that's 800-525-7000. We believe that your opportunity to be found faithful as a steward of God's resources is an enormous responsibility. But the core of faithfulness is obedience to God's Word. So here on this program each day, we want to take you back to the Scriptures, help you unpack the big ideas and themes of God's Word to be able to manage His money well.
That means holding it loosely, giving it generously, saving it appropriately, and I would say deploying it strategically in line with your convictions and values as you invest in God-honoring companies. We tackle all of that and more in this program each day, and look forward to hearing what's on your mind so we can help you make a wise decision and move forward. Whether you're living, giving, owing, or growing, whatever it is, we'd love to hear from you.
The number, 800-525-7000. We've got a few lines open. We'd love to tackle your question. Let's dive in today.
We'll begin in Chicago. Hi, Alan. Go ahead, sir.
Yes. Hey, thanks for taking my call, Rob. A couple quick questions. The first one was, when's my best time to start taking Social Security? I'm 63. I believe my full retirement age is 67. And then the second one would be, when would be a good time, or what would you suggest as far as selling the house I'm in? It's paid for. I'm here in Jacksonville, Florida. It's in a pretty good location.
Yeah, very good. Let's start with the first part of that question around Social Security. Far too many retirees, I think, start taking that check as soon as they're able to, which is 62, rather than waiting until full retirement age, which you said for you is 67, or even beyond that. I'd recommend, if you don't need the money, that you let that continue to grow. That's going to increase at about 8% a year. And as soon as you take it, it's going to lock you in with that reduction, 8% per year, going the other way, lower than your expected monthly benefit for every year prior to full retirement age that you take that. So if possible, I'd let that check grow if you're continuing to work or your income is covered another way. But give me a sense of where this monthly check from Social Security fits into your overall plan and how long you plan to continue working.
Right. That's the big question there. I like to go till at least my full retirement age or 67. I've been blessed where I don't really need the money, which I've heard from a friend is the time to get it.
I'm still not sure how he came up with that idea. But yeah, it'd just be something to supplement my income if I'm still working or retirement income if I do retire fairly early. Well, often folks will point to, you know, one, if you start taking it, you know, you have no idea when the Lord's going to call you home. And so it all comes down to life expectancy, because if you forego this check for the next four years and wait till full retirement age, yes, the check is building, but you also didn't receive those payments for four years. So then, you know, it's probably going to take you another dozen years beyond that, for you to be made whole in the form of a higher check for that portion that you gave up during those years, you didn't take it.
Once you reach age 65, life expectancy for a male in the United States is 83. So if you're in good health, I mean, you would expect that you should be able to fully, you know, recoup what you gave up, and then have that higher check for the rest of your life. But you did forego the opportunity to use that either, you know, to turn around and give it away or, you know, supplement your income or whatever else that might be.
I just kind of like the idea of you getting this check up as high as you can. So that if you had something coming out of left field in this season of life, you needed expensive long term care or something else, that you'd have the benefit to, you know, take advantage of that, that higher check. You know, I think at the end of the day, it really just comes down to, if you don't need the money, in my view, you might as well let it continue to build. But I think, you know, at the end of the day is something you need to make a decision for yourself. I would probably, if you don't need the money, let that check continue to grow.
But I can certainly understand why he's encouraging you to take it, you know, why you can't. I think to the second question, you know, it really comes down to, you know, what are you going to do with the money? I mean, if you're turning around and buying another home, then housing prices are high, but you're also going to get, you know, top dollar coming out of that home sale. So I think, you know, often with your home sale, you know, if you're not looking to borrow anything, and I can't imagine that you are, because you own this home free and clear, then interest rates are not a factor. You've got a red hot housing market that, although it's cooled some, is still, you know, as high as it's ever been, we've seen a slowing of the appreciation, we really haven't seen any kind of downturn in the housing market, and don't expect to just because, you know, we still have a housing shortage in this country with two to three million homes, at least. So because of that, and given that you're in Florida, where a lot of folks are moving, because they like the, for a lot of reasons, namely, you know, no state income tax, you know, your property value should hold up really well. And so I think it really comes down to a lifestyle decision. Are you looking to downsize? Do you want to relocate? But I don't see any reason why you wouldn't go ahead and do that if the time is right for you. I certainly wouldn't hang on to it just, you know, because of the housing market or something like that.
But give me your thoughts on both of those. Yeah, I think that that makes sense. I spoke with your assistant earlier.
It's like, you know, if I do get the money out of this, where am I going to go and get a comparable location and house, you know, with with that money, it probably just be a wash, so to speak. So yeah, yeah, I think that's good advice on both fronts there. Excellent, Alan. We appreciate you being on the program today, my friend. Thanks for checking in with us.
Call us back anytime if we can help further. Let me take this opportunity to mention, though, if you haven't downloaded the Faithfi app, we'd love for you to check it out. Best way is probably to head to our website, faithfi.com. That's faithfi.com. Click app.
You can certainly search for it in your app store. What you'll find is our community where stewards every day are posting questions and getting answers. You'll find our learn tab where you can get the best content in Christian finance, but you'll also have our money management system.
It's built on Larry Burkett's tried and true envelope system, but with a modern simple interface, you can connect securely to your financial institutions. But the key is you can stay on the same page with your spouse. Always know what you have left in every one of your envelopes during the month. And now more than ever, as we're getting squeezed from every direction in our budgets, it's really key that you have a plan to be able to navigate your finances so that you have that margin to accomplish your longer term goals. Check it out today, faithfi.com. Just click app. I hope you'll make plans to join us again next time for another edition of Faith and Finance. Faith and Finance is provided by Faith By and listeners like you.
