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Hi, I'm Rob West. Division over money can creep into a marriage without the couple being aware of it at first, or at least aware of the danger it can cause. Art Rayner joins us today to talk about the signs that money is an issue in your marriage. 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 decisions. Well, our guest today is my friend and financial author, Art Rayner. He's a regular contributor here at Faith and Finance and the author of several books, including The Marriage Challenge, a finance guide for married couples. Art, great to have you back.
Rob, thank you so much for having me. Art, you have a great article on this at FaithFi.com. We'll post a link to it in today's show notes. You talk about some warning signs that indicate a couple may have problems with money. This is really important now, certainly as we head into a more stressful time of the year with all of the holiday spending.
So let's dive into this. What's one of the first warning signs we need to be aware of? Well, it's an obvious one, frequent heated arguments about money. So are you and your spouse in regular heated disagreements about money? Now, for some couples, any conversation about budgeting, spending, paying down debt or giving can lead to explosive arguments.
And the next one is pretty obvious, too. It's financial infidelity. Just lying about financial matters. Financial infidelity can look like one spouse hiding a purchase from the other spouse. It can look like a secret bank account or a secret credit card. It could look like going beyond the spending limit without telling the other spouse. And this is unfortunately, pretty prevalent now among couples. Yeah, there's no question about that.
Let's talk about that one for a second. You mentioned a spending limit. Have you and your wife set a limit where you won't spend over that unless you talk to each other? So we actually are pretty in lockstep with our budget, or what we call a blueprint for mission. And so we don't necessarily have spending limits, because we just know what we're going to spend and what we've planned out.
And so we're in lockstep with our spending. Yeah, and that's really key. I mean, this idea of financial infidelity can really be a unity killer.
We've got to be on our guard there. You mentioned also heated arguments. The former host of this program, our friend Howard Dayton, talks about the importance of a money date.
My pastor mentioned in his sermon last week, he and his wife have a weekly coin and calendar meeting. Doesn't matter what you call it, but the idea is that we need to be talking, right? Oh, absolutely. Communication is key. Without communication, this is where you see financial infidelity start to creep into the relationship.
Yeah, very good. Art, what's the next warning sign? Yeah, it's when money is used as a weapon. Now I'm talking about using money to control or punish a spouse.
It's behavior that needs to be addressed immediately. You could be given an allowance or withholding funds from a spouse. And this indicates significant marital relationship problems. God did not provide couples with money to control one another, but to use it for unification in the advancement of his kingdom.
That's really helpful, Art. Alright, what about shared financial goals and even managing money independently? How can that be a problem? Yeah, managing money independently is another warning sign, and it's become more commonplace in today's culture. Each spouse has their own bank accounts, debts, and credit cards, while a joint bank account exists simply for shared bills. In this marriage, mine and yours are the possessive pronouns of choice. The finances operate less like a married couple and more like a couple of roommates. Now this runs against the marital oneness we see in the Bible. Individualism, autonomy, and personal freedom are not in God's design for marriage. In the Bible, we see married couples lay down their independence and pick up sacrifice. Mine and yours should be replaced with ours. Yeah, what would you say real quickly to a couple that says, it just works for us to keep our bills separate?
How would you respond? Yeah, well, division in finances indicates a division within the marital relationship. Even if it seems to work right now, it might not work long term.
This division can create what may seem like a small division can become a significant division over time. Yeah, that's really helpful. Art, where can folks get help?
Yeah, couples with money issues may benefit from working with a Certified Christian Financial Counselor, and they can find one at faithfi.com slash cert cfc. Excellent. That's faithfi.com slash c-e-r-t-c-f-c. That's the Certified Christian Financial Counselor. Art, thanks for stopping by. Thanks for having me. That's FaithFi contributor, Art Rayner. We're back with your questions just around the corner.
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Grow in wisdom and knowledge by connecting with a community of thousands of Christians striving to be good and faithful stewards at faithfi.com or by downloading the FaithFi app. Welcome back to Faith and Finance. I'm Rob West. All right, let's take your calls and questions today on anything financial. I've got some lines open. You can call right now at 800-525-7000. Again, that number 800-525-7000.
We're going to head to Corbin, Kentucky. Hi, Dan. Go ahead, sir. Good afternoon, Rob. Thank you for taking my call. First of all, thank you.
I spoke with you about a month ago. You sent me a book titled An Uncommon Guide to Retirement. I cannot recommend that highly enough. It's been a tremendous help. It's been a tremendous, tremendous help for me.
We've also connected with a Kingdom Advisor down here in the Lexington area. My question in brief is, what is your opinion on utilizing annuities in leaving a legacy to our kids? The reason I ask is I'm in a rather unique position. After talking to our CKA, we've discovered we're in a much better position than we thought. I'm a retired federal employee.
We're good financially, but there's been some discussion from the CKA about considering, although it's not necessary, but considering utilizing annuities as a way of passing on wealth to the next generation. I'd just like to get your thoughts on that. Thank you again for your ministry. Well, thank you for saying that, Dan, and I appreciate that.
I'll get to your question. Give me what's kind of the one big takeaway that An Uncommon Guide to Retirement by Jeff Hainan helped you with. What was something that you really took out of that? Well, primarily it's his emphasis, at least in a portion of the book, on taking a sabbatical of sorts to determine what your direction should be, what God wants you to do, and to not feel like we have to rush into something, but to take that time of rest and reflection and spend time with the Lord.
Spend time with the Lord to make sure we're not flailing, but we're purposeful in what we're doing. Yeah, that's such a key idea that Jeff really doubles down on this idea, especially in early retirement of a sabbatical rest. Well, thanks for mentioning that.
I'm delighted to hear that was helpful to you. I'd love to know more about the reason for the recommendation. I mean, certainly annuities can be used as a part of an estate plan. I'm not the biggest fan of annuities.
They're typically sold, not bought, meaning people don't go out looking for them. They tend to have high fees and commissions, and they limit you on two things. One is the gains you can make with the money, and the second is access to the money. Now, some folks, though, who are risk-averse are willing, because of the peace of mind that it gives them, to give up the upside potential, because essentially you're trading potential gains in the market for the security of guaranteed payments.
The question is, is that a worthwhile trade-off? And I think you're in a great position now understanding that you have defined how much is enough. You believe you've accumulated enough. I mean, it needs to be managed well from this point forward, but your trust is in the Lord. You have these resources that God has provided to you, and you're saying, so who's the next steward, and are they chosen and prepared? And I think you've got to look at, first of all, what's the opportunity to do some giving now? I love what Ron Blue says, do your giving while you're living so you're knowing where it's going. And it's kind of a fun way to say, well, let's think about, once we know what enough is, getting that money into God's economy sooner rather than later so we can enjoy it and be a part of it. And then, of course, there is that kind of a state plan wealth transfer decision where, apart from the government, the only two places we can leave it are heirs and ministry or charity. And so then we need to make sure we've selected that steward, we've made sure that they are chosen and prepared. When it comes to heirs, we want to always be saying, okay, if we give X amount to X person, what's the worst thing that can happen? How serious is that?
And is it likely to occur? So for instance, a child that's making poor lifestyle decisions, a lot of money in his or her lap could accelerate that move away from God. And so we need to really think deeply and pray about that. I think also we need to think about how do we give money away at the end of our life? And for some folks, they need income now, but they want to give it away at death. So they look at things like charitable gift annuities. For others, they just start giving it away right now. But I guess I don't understand fully the reason that that's the recommendation.
Do you have a sense of why he's recommending an annuity versus just keeping these assets, beginning to give them away now, but then ultimately gifting them as a part of your estate plan outside of an insurance contract at death? We're going to be having another sit down discussion. I'm not clear on all the reasoning.
It was just touched on briefly as we've been laying groundwork. But again, the Lord has blessed us so richly. I didn't anticipate being in this position when I retired. I thought I'd have to go back to work. And because of the situation we're in, I don't have to do that. We're fully covered in terms of our budget and that. And I think the idea is that it's not necessary, but it may be a way of capitalizing on the fact that I have what is part of a dying breed, I guess, of retirement, which is I have a fixed annuity. Excuse me, a fixed retirement that I'll get for as long as I live and a survivor's benefit from my wife.
So regardless of how much I've paid into it, I could stand, Lord willing, I live that long to draw out of that far more than I put into it because it's a guaranteed income. Yes. Okay.
Very good. Well, perhaps you just need to see this through. Let him explain fully what the plan is. It could be that this does make a lot of sense in this season of life. We want to minimize taxes. We want to maximize the amount you can give away based on the income sources, this guaranteed retirement plus the assets that you've accumulated.
And it could be that that vehicle that he's proposing does just that. I think I just don't have enough detail. So I would maybe push you back there and say there's not any red flags here necessarily.
I would just make sure you understand why it's being recommended and make sure that it does in fact fit with what you're looking for. Also look for opportunities to do some giving either to heirs or to ministry or charity while you're alive to the extent you're going to have a surplus. But then I hope that helps you. If we can help further along the way as you get some of these questions answered, don't hesitate to reach out to us.
But may the Lord bless you. And again, thanks for your kind remarks about the program, sir. By the way, the book that Dan mentioned that we sent along as our gift is from Jeff Hanen, published by Moody Publishers. It's called An Uncommon Guide to Retirement, Finding God's Purpose for the Next Season of Life. And it tackles things like what Dan mentioned, the importance of a sabbatical rest in early retirement, listening to God's voice for your calling in retirement, rethinking work in retirement, and even leaving a legacy.
It's just a phenomenal read. And if you're entering that season of life or maybe you're in it, perhaps this is a resource you might want to pick up. Let me also mention before we head to this break, and by the way, we've got some lines open at 800-525-7000. We will be Dee and Mac and Rick coming your way just on the other side of the break. But let me mention before we head to the break that Faith and Finance is listener supported. So this is a critical time for your financial support to our ministry for us to stay on track between now and year end so we can continue the work that God has called us to next year.
If you found benefit in this program, you'd like to support this work, it's quick and easy to do on our website. Just head to faithfi.com. That's faithfi.com and just click the Give button. You can give online over the phone or you'll even find our physical mailing address to send a check through the mail. It's a tax-deductible gift and you can make it online at faithfi.com.
Just click Give. 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. The number to call is 800-525-7000.
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I'm Rob West. You know, one of the decisions we have to make is choosing the next steward and ensuring that they are in fact prepared other than the government. The only two places you can leave assets are your heirs or beneficiaries and charity or ministry. And really answering the question, if we give this amount to this person, what's the worst thing that can happen?
How serious is that? And how likely is that to occur is really essential. You know, one of the principles we also need to deal with in this decision is really the treasure principle. We find it in the book called The Treasure Principle by Randy Alcorn. And it comes to us from Matthew 6 and Luke 14, but it's the idea that you can't take it with you, but you can send it on ahead. And, you know, we need to recognize that we need to be making investments in the eternal, and we can do that through our kingdom giving. We also need to recognize the principle that God gave you a spouse to complete you, not to compete with you. And so we may have different goals and feelings as husband and wife, but we need to work through those together and really think about where God is taking us as a family, how we want to handle our wealth transfer decisions, make it a matter of prayer, and lots of conversation as we make these difficult decisions together.
But unity and oneness is ultimately the goal. To Cleveland, Ohio, Lee, thanks for calling. Go ahead. Thanks for taking my call. I am in my upper 50s and I would like to buy a house, but I cannot save the 20% that you recommend that we save to put down payment. What is the next best option?
I have a 401k or should I borrow it from the bank? Yeah. It's a good question and I can understand why you'd want to go ahead and make that home purchase. Let me just ask a couple of questions. So do you have what I call an emergency fund of three to six months expenses?
Yes, I do. Okay. And then separate from that, how much do you have that you could put toward the down payment?
I have about only $8,000. Okay. And what do you think you might spend? I mean, as you're looking around at houses and you consider your budget and what you can afford in terms of a mortgage payment, what do you think your purchase price will be? Around $200.
Okay. So I mean, the goal we would want would be $40,000. 10% would be $20,000. Obviously, you're at 8%, so less than 5%. So the challenge there is, you know, on top of the insurance you're going to have to pay on a PMI, private mortgage insurance, which could run you one to 2% of the mortgage value, and that doesn't do anything for you.
It just doesn't give you a whole lot of room for the market to move without you potentially being upside down. So let's say, though, you did get a 95% mortgage, but even then that's going to push the interest rate up higher than it already is, which is around 7.2 right now today. Have you run the numbers to see what that mortgage payment would be, including principal interest, taxes and insurance? And have you compared that to what you're paying in rent? Yeah, if I don't put, if I just put what I have down, it'd be more than what I pay in rent. Yeah. And what percentage of that is your take-home pay?
Do you know? The mortgage? It would be roughly about $45,000. Yeah, I just can't recommend that as much as I'd love for you to get into a home, Lee, and I understand that you're saying, well, but what's going to change down the road? Because if I'm not able to save, then I'm not going to be able to be in a better situation. The only thing that could change down the road is, first of all, I would challenge you to say, all right, how do I go back to the budget and trim expenses so I can save and continue to build on that $8,000? You know, the reality is if that, if the payment is going up, so if you're saying it's going to be 45% of your take-home pay, if you get the mortgage, which is more than your rent payment, and then you got taxes, property taxes and homeowners insurance on top of that, and then you have perhaps some additional, well, you will have additional maintenance costs of you owning a single family home versus you being a renter. And so let's say we were to put away 1% of the mortgage every year or the home value every year just in a maintenance fund for you to be able to take care of it. I mean, you're going to quickly, if you're already living paycheck to paycheck and there's no margin, you're going to be upside down. And now we're in a situation where you're upside down every month, and you could put your home at risk, and now we're in a lot worse situation.
So as much as I'd love to be able to say, yeah, let's do this, I just think that, you know, I'm not seeing a path forward where that makes sense. Instead, what I would do is continue to rent. I would focus on your budget and your spending plan to try to trim your expenses as much as possible. I'm glad to hear you have that emergency fund.
Let's take whatever else you have in surplus and assuming you don't have any consumer debt, like credit card debt or other types of debt that you're carrying a balance on. Then let's focus on continuing to build that home savings account, such that maybe a couple of years down the road, interest rates are in a much better situation. And maybe now you do have more saved, such that you can go in with more equity, hopefully getting to that place at some point where you don't have private mortgage insurance. And then you're also ready for the mortgage payment that will result so you don't put yourself in a hardship situation. Does that all make sense?
Yes. Borrowing into my 401k is not a good idea. It really isn't because number one, that money is supposed to be in there for you to have for the future. And as soon as it comes out, it can't recover with the market because the market's still down by all accounts.
And it's not there to grow. Number two, if you ever separate from the company, you've got a huge tax bill, probably a minimum of 30% between the penalty and the taxes. So I just don't like that. I mean, if anything, you may want to dial back the amount you're putting in for new contributions, but I wouldn't be borrowing from what's there. What percent of your paycheck are you putting into your 401k right now? Six percent, and that's what my employer matches. Okay, yeah. After you make that six percent contribution and after all your bills are paid, what do you have left over? Anything? I usually have something left over that I keep putting into the savings to roughly about 200 a month.
Okay. Yeah, but I would suspect that that mortgage at seven and a half percent plus the private mortgage insurance plus the taxes and insurance and any kind of maintenance you need to put aside for the house would probably eat up that 200 and then some. And now you might be going underwater in certain months. And that's just not going to lead toward credit card debt, and it could ultimately lead toward a foreclosure. So if it were me, I would continue to fund and take full advantage of that six percent matching like you're doing, but I just keep saving. Let's save as much as you can and let's hopefully see these interest rates come down over the next couple of years and then we can kind of revisit this idea of a home purchase. Lee, I appreciate your call today. I know that probably wasn't what you were hoping to hear, but I think that's going to be the most prudent path forward for you as a steward of God's money. Thanks for your call today.
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