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. According to the Chamber of Commerce, the most popular New Year's resolutions include eating healthier, being more active, and managing money better. Fortunately, statistics also show that most resolutions will bite the dust within a month.
Hi, I'm Rob West. If you've made a resolution to manage your money better this year, how can you be sure to keep it for the long haul? Today we'll help you avoid the pitfalls of resolution failure. Then we'll take your calls at 800-525-7000.
That's 800-525-7000. This is Faith and Finance, biblical wisdom for your financial journey. Well, no matter when you make them, resolutions are hard to keep.
Why is that? Well, statistics show the most common excuses for giving up on our resolutions are lack of willpower, forgetfulness, and plain old laziness. God knows we all struggle with these things from time to time, especially when the going gets tough. So if you're trying to get out of debt or stick to a new spending plan or save more cash, the going will get tough at some point. The key is to break old habits and develop new good habits.
Easier said than done, right? Part of the problem may be that you're making resolutions without a clear plan. Financial resolutions are almost always guaranteed to fail if you don't set up a budget.
Having a spending plan will put your resolutions on autopilot, and before you know it, you'll be developing those good financial habits. Another important element we sometimes forget when making life changes is accountability. Don't go it alone. Invite a friend to check in with you periodically to make sure you're staying on track. If you're trying to eat out less or save more each week, make it a shared family challenge. Don't give up when you make mistakes, and reward yourself when you reach important milestones in your plan. Share your victories and your struggles with others. Okay, what if you have a plan and still struggle to keep your resolutions?
It may be because you're trying to do it all in your own strength. We need to lean on the Lord. As Isaiah 40 verse 28 says, that's where the power is. The Lord is the everlasting God, the Creator of the ends of the earth. He does not faint or grow weary.
His understanding is unsearchable. He gives power to the faint, and to Him who has no might, He increases strength. So, here's a new way to approach your New Year's resolutions. First, pray. Ask God to show you His will for your life. Acknowledge His sovereignty in your life and submit all your plans to His direction. If you're married, pray together about your finances and ask the Lord to give you unity in Christ. As with any goals, your financial resolutions need to be smart.
That's S for specific, M for measurable, A for achievable, R for realistic, and T for timely. Let's start with specific. The more detailed and clear your plans are, the easier they'll be to follow. That's where a spending plan comes in. By the way, we can help you with that.
Just download the FaithFi app to get started. A smart financial plan will also be measurable. Your detailed budget will allow you to keep track of where your money's going. You'll be able to measure your progress as you repay your debts and save for the future.
Success breeds success. Third, your financial plan should be achievable. Don't expect to pay off all your debt at once or build up your emergency fund in just a couple of months.
Be patient with the process and give yourself time to see results. Smaller steps will be easier to manage, and you won't get discouraged. You also want your financial goals to be realistic. It's okay to dream, but your spending plan needs to reflect your real income and your real expenses. Be careful not to use debt to pay for things you really can't afford now. Finally, your financial plans need to be timely. If you're saving for something or paying down debt, give yourself a reasonable timeline and stick to it. Set up your spending plan and track it weekly or even daily so you always know where you stand.
Make adjustments as needed and keep going. With God's help and a specific, measurable, achievable, realistic, and timely financial plan, you can avoid resolution failure this year. By the way, if you need help with a spending plan or getting out of debt or saving for the future, I hope you'll download the Faithfi app from your app store. You can also visit us online at faithfi.com. That's faithfi.com. Be sure to join our online community and get your questions answered or email your questions to askrob at faithfi.com. We hope to see you in the app. Again, it's faithfi.com.
Just click App. All right, your calls are next. The number, 800-525-7000.
That's 800-525-7000. I'm Rob West, and we'll be right back. Stick around. As a faithful listener of this program, you know that there's life-changing financial wisdom in God's Word, and Faithfi is here to help you and millions of others learn to be good and faithful stewards. As a nonprofit organization, we rely on help from monthly Faithfi patrons, supporters of this mission, to help us continue and expand our outreach. Has God provided financial answers for you through this ministry? If so, consider becoming a monthly Faithfi patron. Visit faithfi.com and click Give. Are you looking for a financial professional who aligns with your biblical values? Certified Kingdom Advisors are trusted financial, legal, or accounting professionals who have completed a rigorous certification program to ensure they provide biblically wise financial advice as part of their practice.
You can find a local CKA professional in your area by going to faithfi.com and clicking 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. Let's begin. We're going to start in Wisconsin. Jim, thank you for calling.
Go right ahead, sir. Yeah, thank you, Rob, for taking my call. You guys give good advice and we appreciate your programming. I am retired. My wife and I are both retired. We're 74 years of age. We have our home. Everything we have is in a trust for our children and grandchildren and great grandchildren. And my granddaughter has always indicated that we should, she was going to take care of us.
And as we get up there in age, we're thinking that maybe it's time for us to put an addition on our house. We have property that allows us to have a separate home, a grandparent home. And I'm trying to figure out what's the best route to go for them to sell their home and buy ours. But the interest rates seem to be higher now. I was told there are about seven and a half percent.
Or is it do I try to take out a loan on my own and try to buy it? And I don't know. I'm not sure which way to go.
If you have any advice, I'd appreciate it. Yeah, it's a great question and this can get somewhat complicated, but let's just try to work our way through it. So what would you like to have happen in the end? Forget how we get there, but how would you want the ownership structure of whatever the improved property looks like to look like when it's all said and done? Well, eventually the home would come out of the trust and be given to our, you know, are taken as part of the trust out and they would have to certainly pay the difference. And we haven't really investigated all of that because the way our trust is set up so that we have different percentages with a major portion going to our different venues and things that we support. But then there would be a small percentage that would go to each of our two children and then grandchildren and then they, you know, she would take care of us as we advance in years or one of us were to pass away or whatever.
Sure. And are they in a position to buy your home from you? Well, that's been talked about, but the husband is a little bit leery because of the high interest rates. They've been living in their current house for about 10 years. Would you be in a position, Jim, to hold the note, meaning they'd buy it from you and essentially they'd pay you and you could charge them a lower interest rate because the IRS will allow you to charge, they establish what a minimum annual rate will be without it being a gift. Right now it's less than 5%. Are you in a position to do that or would you need to get the cash out to do whatever improvements you're looking to do? Well, that's a good question. I think we might be able to get some cash out, but we wouldn't be able to get too much because we rely on, between our retirement, which is with a Christian counselor, we would be, we rely on part of that for our contributions, you know, to help.
But they could essentially, if you're willing to hold the note, they could buy it from you, you'd close the sale, they would become the new owner of the property, but you're holding the loan as the seller and then they're paying you a monthly payment at a reduced interest rate that's more reasonable if that's something you're looking to do. Do you follow that? Yeah, okay, that's a good idea. See, this is kind of a new area for us because we were just having this conversation and she said, well, Grandpa, you're not going to go into a nursing home. Sure.
I so appreciate what she's trying to do there. I think you need to let this play out a little bit further and you need to, with them, sit down and really talk through it with some specificity around what is it we're trying to do? Do we want to build a second home on the property where you all are right next to each other and they can provide the care? Are you looking to just add on and improve the existing dwelling? That's going to be a major difference because if it's a single structure that you're improving, well, then you're going to have shared ownership of that where you're going to own a portion of it that would pass to your heirs.
A small portion may go to your granddaughter, but it's going to go, according to your trust, to all of your heirs and charity, and they might own a percentage of that property in their name. Or it would be cleaner if you all decide, well, we want to build a separate dwelling on the same property. You sell it to them either outright and they get their own conventional financing now, or if you're not in need of this care today, maybe you wait a couple of years, they continue to save, and then they're buying this home from you at a better, more conventional rate. Or you follow my suggestion on potentially considering owner financing where you're essentially the lender, they're giving you the down payment, and then they're paying you monthly at a lower interest rate, and you've got that income stream coming in, and then at some point they pay it off down the road or pay the estate off after your death. So I think you've got to kind of work through. The first question is, are we going to improve the existing property or are we going to sell it and build a second one?
And I think once you know that, then you can start to play out the various options that I mentioned, shared ownership, selling, and them getting a conventional mortgage maybe a couple of years down the road, or buying it now and you become the owner financing to actually extend the loan to them and they're paying you every month and not the lender. Does that make sense? Yeah, that does make sense.
I'll have to investigate that. We were thinking originally that we would have a separate house, a smaller one, like an apartment close by, but we would still have to add separate septic and we'd probably have to go with a different well system. Those are all things that would be smaller. And construction costs are still pretty high right now, and so I suspect, would it be true that you'd need the proceeds out of your existing home in order to go build that home you're describing? That's possible, yeah. So in that case, you may need to sell it and then we're back to the scenario of, okay, we can't hold the note because we need the cash so we can go build on our same property and then it's a matter, okay, now what's the right timing for all this to take place? Are you all in need of the care they're looking to provide right away or are we thinking down the road at some point? Well, we're thinking, we're starting to investigate that because some of us, my wife and I both have, as we get up there in years, we're starting to have all these aches and pains and so we want to make sure that we're cared for and we don't want to go into a nursing home since we have a granddaughter who will care for us. Well, what a blessing that you do, Jim. I'm so delighted to hear that.
I think your next steps are to talk to your granddaughter and her husband, really process it through on the timing and the plan, and then get with your estate planning attorney who drafted the trust and a real estate attorney to figure out the right timing and the best structure. I hope that gives you some things to think about. We appreciate you calling today. God bless you, sir, and thanks for your kind remarks about the program.
To Michigan. Hi, Jean, go ahead. One quick question. I have a CD kind due for $100,000. If I put that money, close that account, put it into my checking account and bought bonds instead.
Your opinion, please. Yeah, I mean, I like that. I mean, you're going to get a good yield on it. And as rates fall, and they will at some point, certainly not anytime soon, we're probably going higher before we go lower. But as those rates fall, you'll do well. So you could buy individual bonds, you could buy a bond mutual fund with high quality corporate and government bonds, I'd probably stay, Jean, on the shorter end of the duration, so 10 years or less.
But I think for high quality bonds that are, you know, relatively short term, you can absolutely do very well in those. Thank you very much. I appreciate it. I appreciate you in the show. Thank you, Jean. That's very kind of you.
I'm Rob West. You're listening to faith and finance and we'll have more of your calls and questions on the other side of this break. We'll be right back. We're grateful for support from Eventide Investments on the faith and finance program. Eventide's approach to values based investing is grounded in the belief that humankind was created in the image of God with intrinsic dignity, value and worth. Eventide calls this investing that makes the world rejoice. More information is available at eventideinvestments.com.
That's eventideinvestments.com. Thank you so much for joining us. We'll be right back.
We're back. I'm Rob West and this is faith and finance. It's the time of year that we're thinking about gifts. And I just want to say how grateful I am for the many generous supporters in our listening audience. You enable us to share the good news of God's wisdom on finances. Won't you consider sending a year-end financial gift to help us continue sharing about what God has to say about money? Simply go to faithfi.com and give your gift today. And again, thank you for your partnership.
None of this would be possible without you. 800-525-7000 to Ocala. Diana, thank you for calling. Go ahead.
Hi, yes. I've been on disability since 2012. I'm 57.
I will not be going back to work. Maybe in about five years, my monthly income is going to drop drastically, probably half as much as what I'm getting now. My question is, I got a letter from my employer that I no longer work for saying that they would like me to, I have an option to collect my pension at a lower amount. I think it's one-third to get out early in a lump sum versus waiting till I'm 65 and collecting monthly. I don't know what to do considering I'm not working and I'm not really going to have any income except for Social Security once I turn 65. And that's probably going to be reduced, but it's going to be less than what my disability is because I haven't worked in 11 years.
Yeah, I see. I'm a little hesitant just based on what you're describing for you to take that lump sum, even though I like the lump sum option. If you're going to only be able to get a third of what it would really be worth and what they're basing the monthly pension payments on at your full retirement age, if whatever that number is, they're going to essentially give you a third of that as a lump sum.
That doesn't sound like a great offer. Do you know what the amount is that they're suggesting they would be able to give you? It's like $43,600, but my monthly amount would be $447 a month, and I did a 20-year speculation.
I didn't do cost of living increase, but just on a 20-year, if I took what they want to pay out and I divide it by 20 years, it would be $181 versus $447 a month. And then the other was I was concerned, well, what if I did wait and they went out of business? What if they went bankrupt or out of business? Now, it's a pretty big company, but I looked up their profitable income in 2021 was $3,068 billion, but last year it was $414 million, so it dropped drastically. It's an interesting company. Yeah, what is the insurance company? It's Liberty Mutual. Yeah, that's a massive company. I suspect you were probably looking at that perhaps not correctly.
That's not right in terms of the difference between the years. But I wouldn't be concerned about that. I mean, even if the company failed, the Pension Guarantee Benefit Corporation would step in and protect your assets there. Investors in the company would lose money, but pension holders should not, so I wouldn't be concerned about that.
I would be very hesitant for you to take this. I mean, apart from you doing some real financial planning with an advisor to really look at the fine print and the details, but just the $45,000 roughly that they're talking about versus you being able to get $400 a month, so essentially $5,000 a year when you turn 65 sounds like a much better option than the $40 a month. I mean, if you had $45,000 a month, I would tell you only take about $150 a month on that in order to preserve it, and you're going to get more than twice that with the monthly pension payment. So it feels like they're really cutting it back significantly, and you're going to give up a lot of money.
And I realize you're not going to have the principal to touch, but what you need is a good stable income to cover your bills, and that $400 a month is a pretty significant payment versus what you could generate monthly on a $45,000 investment. Does that make sense? Right.
Yes, it does. So you're saying just hold off and collect the $447 a month. Just based on what I know today, that sounds like a much better deal for you.
And if you can get to that point, which it sounds like that, does that sync up pretty well with the point where your income drops? Right. Yeah. I thought that I wasn't going to go with the deal, but then I thought, well, what if they go bankrupt or something? But it's a pretty big company.
It's a massive company, and it's very highly rated. And again, you have protections even if they were to fail on the pension itself from the pension benefit guarantee corporation. So I wouldn't worry about that. And so I think just based on what I'm hearing, I like the option of you waiting and taking that larger monthly payout. And that way, you've got that for the rest of your life.
That plus your Social Security hopefully will cover your bills, and then that'll give you quite a bit of peace of mind, and you don't have to worry about stock market investments or risk or anything like that. Awesome. Okay. We appreciate it. To, let's see, Chicago.
Harriet, go ahead. So I have term licensure which expired. To renew it, they sent me one for like $890 each quarter. My question is, is it wise to have licensure?
And if yes, I know whole life would be better, but I'm just wondering if I should have put money to the side and saved that. Sure. So what is your age? Fifty-eight. Fifty-eight. All right.
And are you still working? Yes. Okay.
Yeah. I mean, so I like term insurance. It's significantly cheaper, so it's a lot more affordable, which means for most folks, it allows you to get the amount of coverage you need, which is typically 10 to 12 times the income you're trying to replace at a minimum. So if somebody is depending on you for your income and you're making $60,000 a year, you want to have somewhere around $600,000 to $800,000 in coverage. And in order to do that, buying a term policy and for you, maybe a 10-year term policy is going to be the most cost-effective way to do that. And then if you don't need it or your loved ones don't need it because you retire and you're able to let it lapse, well, that's fine. You only paid for the pure insurance, but you covered the risk. So that would be my approach.
And let's do your savings outside of an insurance policy. Well, once again, our time went by way too fast, but tune in next time and we'll do it all over again. Before we go, I'd like to thank our incredible production team, Amy, Devin, Jim, Robert, Brandi, Rob, and Ben. Couldn't do it without them. Have a great rest of your day and I'll see you again next time for another edition of Faith and Finance. Faith and Finance is provided by Faith Buy and listeners like you.
