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. You made a great start with your spending plan journey, but you're having trouble staying on track. We're here to help.
Hi, I'm Rob West. Well, you can't afford to wreck your budget, so today we'll help you steer clear of a few common financial potholes. Then we'll take your calls at 800-525-7000.
That's 800-525-7000. This is Faith in Finance, biblical wisdom for your financial journey. Well, a really big pothole can do some serious damage to your vehicle. The same is true for your finances. Even if you have a budget, there may be times when unexpected expenses or even financial temptations can put your spending plans in jeopardy. So let's look at three financial potholes that can wreck your budget. You'll save money and a big headache if you can steer clear of impulse spending, money leaks, and scams. Let's start with scams.
There are new ones every week, so be alert. Technology makes it easy for crooks to cheat people, so keep your phone and computers updated with antivirus software as the first line of defense. Identity theft is one of the biggest threats out there, so protect your social security number and passwords as if they were cash. Find out more about identity theft and how to deal with it at ftc.gov slash idtheft or by calling 877-ID-THEFT. Money transfer scams are rampant these days, too, so don't send money from your bank account just because someone asks for it, even if they claim to be a friend or family member.
You should be the one to initiate any transfer and verify the recipient. Of course, you should never click on links in suspicious-looking texts or emails. Never share personal information, access codes, passwords, or PIN numbers by phone or email. Watch out for communications claiming that your account is compromised. If you aren't sure, look up the company's legitimate phone number on the internet and verify the claim. Don't call the number listed on a suspicious email or text.
If you feel unsure about a contact, especially if you're getting threatened or pressured to act quickly, just stop. Don't give any money or information until you have double-checked the source. Okay, the next kind of financial pothole to avoid is the money leak.
Money leaks are little charges that sneak into your life and get forgotten, or small expenses that add up without you realizing. For example, free trials. Don't sign up for a service just because you get three months free. When the trial period is up, they'll charge you and chances are you'll forget to cancel. Auto-renewing subscriptions. Along the same lines, people tend to forget about music, magazine, and streaming service subscriptions, which will continue to renew until the end of time.
So save money and cancel as many as you can. Another common money leak is the daily indulgence. Whatever is your snack of choice, that daily stop at the coffee shop or donut place can take a bite out of your budget. Finally, watch out for the grocery store gimmes.
The best solution is to shop alone, but if you have to take the kids to the store, limit them to one small treat each and then stick to your list. It's important to know where your money is going, even the small expenses. Ultimately, it's a matter of stewardship, taking care of what God has entrusted to you.
As Jesus says in Luke 16 10, he who is faithful in a very little thing is faithful also in much. Our third budget-busting financial pothole to avoid is impulse spending. For most people, impulse spending is only an occasional temptation, but it has spiritual as well as financial implications.
Here's what I mean. Impulse purchases are hasty decisions, and the Bible warns against those. Proverbs 21 5 reminds us the plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty. Also, impulse purchases are immediate gratification, which means putting the pleasure of the moment ahead of everything else. 1 John 2 15 says do not love the world nor the things of the world. Lastly, impulse purchases steal money from better causes. 1 Timothy 6 8 encourages us to be rich in good works, be generous and ready to share. You see, folks, financial potholes of impulse spending, money leaks, and even scams can really wreck your budget.
But now that you know they're out there, well, you can plan ahead to avoid them. For more help starting or sticking to a spending plan, visit us at faithfi.com to download the Faithfi app. That's faithfi.com.
Just click app. All right, your calls are next. 800-525-7000. That's 800-525-7000.
We'll be right back. We are grateful for support from one ascent investments on the faith and finance program. They manage a comprehensive suite of value based investment strategies designed to help Christian investors live aligned with what they value most. One ascent believes that if your values inspire the way you live, they should also inspire the way you invest.
This can be a unique form of worship. More information is available at investments.oneascent.com. That web address is investments.oneascent.com. God has entrusted his finances to you and we at Faithfi have designed our Faithfi app to help you live, give, owe, and grow with that perspective. Our Faithfi app is the leading biblically based finance app. You can manage your money, get top biblical financial resources, and interact with a community of like minded believers where you can ask questions, get answers, and share what you're learning.
Go to faithfi.com and click the word app to get started. You're listening to Faith and Finance, where we talk about how to handle God's resources. So let me ask, how are you using God's resources? The book Leverage Using Temporal Wealth for Eternal Gain will help you think through giving to God's kingdom now and later.
And you can request your copy of Leverage with your gift of any amount at faithfi.com. Now on to the calls. Remember the number to call is 800-525-7000. Let's begin today in Florida. Let's see, Francisco, thank you for calling. Go ahead. Thank you, Rob.
Appreciate it. Rob, there is an insurance for the regular accounts on a bank like FDIC. On a brokerage account like Confidelity, I see that it says that it's insured by the SITC up to $500,000. A friend of mine, I was advising him to put the money in there because of the good interest. And he searched and he said, well, the money is available or is not automatically insured. It's eligible to be insured if something goes wrong with the brokerage account. So I was a little bit worried. I wonder if you know anything about this?
Yes. Well, it should be automatically protected through the SITC. You can ask the custodian of the account. But keep in mind, this is against the loss of cash and security. So we're talking stocks and bonds held by you at a SITC member brokerage firm. And as long as they're a member, SITC member, then you're automatically covered.
You don't have to apply for it or do anything to get it. Now, the key is to understand what this covers and what it doesn't, Francisco. And you may be clear on this, but just to be sure, this is against the loss of assets or stocks due to the failure of the institution. So if the broker fails financially, if your assets were missing or they were stolen due to unauthorized trading or theft from the account, that's where SITC would step in up to $500,000 in total coverage per customer or per account if the accounts are separate capacities. And then up to $250,000 can be applied to cash that's not yet invested in securities. But this does not cover losses based on the investment losses. So if the investments inside the account lose value, SITC does not cover that. This is really against the failure of the institution or if there's any kind of theft or fraud that occurs. But the question you would want to ask is, is this a member firm of the SITC?
And if they are, then you automatically have that coverage. Perfect. Well, we have the money just on the brokerage. We don't want to trade. It's in cash. So we're not exposed on any type of trading. So that was worrying me. But I think with what you just said, we should be fine there. Meanwhile, it's below $500,000, correct? Well, no, if it's not in securities, the limit is $250,000 of that protection from SITC that can be applied to cash within the account.
You can get up to $500,000 if you have it in securities, but if it's only cash, you would be limited to $250,000 in coverage. Excellent. Well, you clarify a lot. Thank you so much, Rob. I really appreciate the excellent program. Okay. You're welcome. Hey, the only other thing I would mention to you, Francisco, is if you're not planning on investing this and you are going to leave it in cash instruments, then I would look to make sure you're getting a good yield on this because you should be getting at least 4% plus.
The other thing that I would ask is, with this significant amount of money, as long as you've got the right time horizon, 10 years plus, why not try to put this money to work for you, taking a modest amount of risk that's appropriate for your age and risk tolerance, but trying to grow this beyond what you could get with cash offerings? What are your thoughts there? No, yeah, perfectly, perfectly understand, and I follow that. No, this is something more on the short term, maybe a year, year and a half, while something shows up. So, no, this is not long term. Very good.
And what are you getting in the way of interest? Yeah, I think it's like 4.4 at this moment or a little bit over that. Yeah, it's very good at this moment.
That's why we moved there. Okay, yeah, very good. Alright, Francisco, thanks for your call today.
I hope that helps you. We appreciate you being on the program. Let's head to Idaho, Bonners Ferry. Hi, Debbie, go ahead. Hi, Rob. I'm so thankful to be talking with you. I listen to you almost every day. I'm delighted to hear that. Glad you're on the program.
Thanks. I hope this isn't going to be too complicated. I live in Idaho. My daughter lives in Tennessee, and due to her young, like eight and a half month old daughter and my age, I decided I want to start wintering in Tennessee, and we're looking at, they're renting, we're looking at buying a place together. I've got the down payment, and then they would just pay, you know, a monthly amount toward the purchase price.
I would pay, you know, whatever. They were going through a credit union. We want to go through a credit union because it's generally a little lower rates, and I can't join until I live there. So they're going ahead with the membership and starting the loan process. I just wondered if it's wise for the three of us to go into this together and what you suggest as far as safeguards and whatever. Yeah, I mean, I don't have a problem necessarily with you all buying it together as long as there's really good communication and a lot of clarity that's documented on what your ultimate intentions are with respect to several things. Number one, who is going to actually be the owner of the house? Are you going to split the ownership so you'd actually be both listed on the deed? Or is one person going to be the owner and the other is just helping to secure the property and enjoying the rights of living in the property? Secondly, would be the mortgage. Whose name is the mortgage in and that's going to determine who's ultimately responsible for paying the mortgage monthly and paying it based on the terms of the mortgage, but also what income is required from what parties for you all to be able to qualify for the rate and terms that you're looking for. And of course the loan amount and can they do that on their own with their own credit score and income or are they going to need you?
And so those are really the big questions that I would have. And then is there any kind of payback expected for this down payment that you're putting in versus who's going to be carrying the mortgage? So let's start with the ownership.
What's your intention there? Well, yeah, that one is kind of iffy right now because I'm going to be the one putting the money into it now. But see, the mortgage can't be in only my name because I'm not there yet. The mortgage has to be through all three of us because they're the ones that are resident there. I will be resident there six months every year, but I'm not there yet.
Right. Well, I mean, you wouldn't have to use that credit union. I mean, you could go to bankrate.com or go to a national lender like Movement Mortgage or you could get a loan that doesn't require you to be a resident.
And I'd encourage you to get at least two to three offers anyway. A lot of times for the biggest transaction we do, which is the home purchase, we often only get one offer. And it's just you end up paying more money because you're not comparing lenders with regard to fees as well as interest rate and terms.
So you wouldn't necessarily have to be there. I think the key is, again, who's ultimately going to own it and who's going to be on the mortgage in terms of qualifying for it? And then who's going to be responsible for servicing that mortgage? I understand you're putting in the down payment.
Are you also going to be the one making the mortgage payments? Let's do this. I've got to take a quick break, but I want to continue to explore that and maybe help you think through this briefly. So you stay on the line and we'll get to you just after the break.
We'll be right back. Kingdom Advisors dot com slash get certified. That's Kingdom Advisors dot com slash get certified. We are grateful for support from sound mind investing in the faith and finance program. If you have money in a retirement account or just a general investing account, you know, the stock market can sometimes seem like a roller coaster. But it is possible to enjoy both profit and peace of mind in investing no matter what's happening in the market. You can see a short video webinar on that topic at Sound Mind Investing dot org. Since 1990, Sound Mind Investing has sought to offer financial wisdom for living well. Sound Mind Investing dot org. Welcome back to Faith and Finance.
I'm Rob West. We've got a few lines open. Eight hundred five two five seven thousand is the number to call with your questions today.
Let's head back to the phones. Just before the break, we were talking to Debbie in Idaho. She would like to help her daughter and son in law and their family move into a home that in Tennessee, another state that she would ultimately live in as well. I think periodically as she relocates there throughout the year and is just wanting to sort through some of the questions around how do they do this together?
Is it wise? And maybe what are some of the things they need to be watching out for? And Debbie, I was saying we need to really clarify ultimately who's going to own it, who's actually going to be on the mortgage as well. And therefore, who's going to not only help to qualify for that mortgage, meaning who's responsible to pay it and what income is being considered. And then who's going to pay that mortgage every month? And then we've got the down payment as well.
So you mentioned, you know, perhaps you're a little unclear on the ownership. Let's talk about the mortgage for a second. You mentioned you wanted to use a credit union that required you to be a resident. Let's take that off the table for a second because, of course, there are other options for you to qualify for a mortgage without that. Who is going to be on the mortgage, meaning they're responsible for it and they're going to be considered as a part of the underwriting process in terms of their credit worthiness and income? Well, taking the credit union off the table, that would probably be in my name because I'm the one that's, like I said, putting the money into it. And I have the highest credit score too because I'm older. What's the purchase price?
It's about $290,000. Okay. And you should be able to qualify for that, not only your credit score, but the income that you have and the other debt that you have?
Yes. I don't have any other debt and I'm going to be able to put down 20% of that. And then the monthly amount, they're going to keep paying what they've been paying for rent and I will make up the rest.
We can easily do it. But part of the problem, Rob, that I didn't mention before is that part of what's going to fund, a little bit of what's going to fund my part of the mortgage is that I'm renting out. I have a multi-level house and I'm just in the process of finishing my basement to move into the basement and I've got renters for the upper two levels.
And so the most financial institutions do not consider rent income as part of the, you know, until it's been in place for two years. That's right. So that's kind of why the three of us need to, or them and me kind of need to do this together because I don't have, my income is not quite, almost up to the amount of what we'll be paying monthly, but not quite. Yeah.
Yeah. So yeah, that does complicate things a little bit. I mean, you potentially could get a mortgage where they would, you know, put you and maybe the primary wage earner of, you know, your daughter's family, your daughter or your son-in-law on that mortgage as well. Then they'd have recourse to both of you. They of course have the asset itself that they could foreclose on if there was non-payment and then, you know, they could go after each of you for anything that was remaining. So let's say you had enough income between you to qualify for the mortgage, who do you ultimately want to own this and how do you see that breaking down? Whose property is it? Even given the fact that you're at least today putting in the majority of the money in the form of the down payment, some of the mortgage payment, they're contributing to it, which again, this makes it, it's all pretty complicated. How are you thinking about handling ownership?
Yes. Well, my son, who's also got a vested interest in this because I'm his mom too. He's helped us figure all this out and how many years it would take for my daughter's family paying, you know, what they're paying now for their place they were paying toward that, how many years it would take before they were the full owners based on what I'm putting in.
But I would, until I die, I would probably still live there six months out of the year. So we were thinking maybe I would have one-third interest and so they would need to pay back two-thirds. Okay. Yeah. So you'd both be on the deed. They own one-third. They own two-thirds.
And then the third that's yours, that's your death, you could decide how you wanted to distribute that maybe between all of the kids. Right. Is that correct? Yeah. Yeah. So, I mean, you can do this.
I don't, I don't see any problem with it. I think we just need clarity. I mean, it's a lot of what you just said in the sense that you need to really think it through. I'd put it all in writing as to what the goal, the goal is. I would make sure that that one-third interest you're getting the property makes sense. It's, you know, enough interest based on how much you're going to put in and that, you know, they're ultimately not going to pay you back for. And so he would have to determine what is the real value of that one-third interest. And that's then the number that they have to pay you back for. And so there's a schedule on that monthly payment. How, how quickly do they have to do that?
What's the total amount they will have to pay back? You know, it's complicated. I think the key here is communication, documentation, and clarity so that there's not any unmet expectations or damaged relationships because they go in one thing, go in thinking one thing. You and your son go in thinking another.
And, you know, then all of a sudden we're creating a challenge. So I would just make sure you have a well thought out plan. Everybody sits down and talks through it and then you put it in writing. Everybody signs off on it and then get a real estate attorney to help you just kind of organize it and put it into legal terms. I also know you wanted to pull a copy of your credit report and do that free.
And the website to do that is annualcreditreport.com. So Debbie, let us know how this turns out. I hope that was helpful to you, though, and I appreciate your desire to help your daughter and son-in-law and be able to enjoy time with them when you're in town. God bless you.
To Tampa, Florida. Hi, Mike. How can I help you?
Hi. I got two questions about the rule of 55. One is, do you have to, is it the year you turn 55 or do you literally have to have your birthday and then at some point after that before you could take advantage? And also, as long as it remains in the 401k is can you continue to make future withdrawals until you turn 59 and a half and then it's not necessary anymore?
Yeah, that's right. So to the first question, you can begin to withdraw those funds without that 10% penalty, assuming you leave that job in or after the year you turn 55, not the actual day. So as long as you separate from that employer in or after the year you turn 55, then it would apply.
Of course, you'd pay tax on it, just not the penalty. As to the schedule of that withdrawal, it's pretty flexible. As long as you meet the requirements, you can take as much or as little as you want from the 401k without committing to a set schedule. Now, it's only from your current employer's 401k, you couldn't reach back to an old 401k or an IRA.
But yeah, as long as it's your current employer, you separate in or after the year you turn 55, then you have some pretty good flexibility there to get that money out without penalty. Perfect. Thank you so much. You got a great show. Thanks, Mike. I appreciate that. 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, Brandy, 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.
