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Learn more at LightpointPortfolios.com. I'll talk about the case for total financial honesty first today. And then it's on to your calls at 800-525-7000.
Call that number 24-7-800-525-7000. This is faith and finance, biblical wisdom for your financial journey. Well, the Bible is filled with directions for living the Christian life, but not all of them made it into the 10 commandments. Exodus 20 verse 16 reads, You shall not give false testimony against your neighbor. That's a very broad commandment. It doesn't apply only to legal proceedings or even finances for that matter. It means we are never to be dishonest anywhere at any time. The word neighbor here doesn't mean just the people living next door.
It means anyone who isn't you. Now, I know what you're thinking. What about Exodus 1 where the Israelite midwives deceive Pharaoh to protect infants and Joshua 2 where Rahab lies to save the Israelite spies? Why are those cases seemingly acceptable to God? Well, those were times where two conflicting moral imperatives collided head on, telling the truth and saving lives. Because we are made in the image of God, saving human life obviously wins out. And that's what the midwives and Rahab did.
But it's very unlikely any of us will ever be in a similar situation. So let's get back to why honesty is so important for the rest of us. And that's simply because it's so fundamentally important to God.
He's completely and utterly holy and cannot abide sin of any kind, including dishonesty. God is truth. Jesus says in John 14 6, I am the way and the truth and the life.
No one comes to the Father except through me. Compare that to Satan, whom Jesus describes in John 8 44 as a liar and the father of lies. The world is watching to see which side we're on. We're image bearers of God. So we must always be scrupulously honest. Now, as we turn to financial honesty, specifically, you might wonder why we're not focusing on another commandment. Thou shall not steal which comes right before thou shall not lie.
I don't think that's a coincidence. Those two commandments are linked and expand on each other. It's difficult to do one without doing the other. When it comes to finances, they're two sides of the same coin. How can you steal without first being dishonest? How can you be dishonest with money and not be stealing from someone? Now, one of the things we say a lot on this program is that money in itself isn't important to God.
It's only a tool. And if that's true, you may wonder why not stealing was important enough to make it into the Ten Commandments. Well, God already owns everything. So no money isn't important to him, but honesty is because he is honest, always truthful, and always keeping his promises. In Luke 16, the parable of the dishonest manager, Jesus says, You see, Jesus is talking about money there, and more specifically, he's teaching that how we manage it is a measure of our character. We've talked a lot about honesty, but what about dishonesty and the consequences of it? Well, obviously, knowing that we'll have to stand before the judgment seat someday to answer for every lie we tell should be a strong disincentive. But there could be other, more immediate consequences. We take a risk when we're dishonest with money. We could lose God's blessing in our affairs, and that doesn't have to involve money. Consider Romans 12, too. Most of us are familiar with the first part of that verse, The whole verse implies that there's a blessing in doing God's will, a key part of which is to be honest in all of our dealings, financial and otherwise, not a financial blessing necessarily, and often something even better. For example, one blessing you receive by handling money honestly is that you reduce your stress level. Even if it costs you money, you have peace of mind in knowing that you're pleasing God, the one who gives you everything.
So there you have it, the case for biblical honesty at all times, in all places, including your finances. All right, we're going to take your calls next at 800-525-7000. Those lines are open 24-7, 800-525-7000.
I'm Rob West and we'll be right back. Light Point Portfolios offers retirement plans for a variety of organizations such as businesses, nonprofits and churches, and we're grateful for their sponsorship of the faith and finance program. More information is available at lightpointportfolios.com. 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. Welcome back to Faith and Finance. I'm Rob West. We're taking your calls and questions. 800-525-7000. You can call right now, 800-525-7000. Let's head back to the phones to Antioch, Illinois.
Hi, Karen. Go right ahead. Hi, thanks for taking my call. Yes, ma'am. Okay, so I am going to receive a death benefit.
A little bit over $12,000, okay? And I know the correct thing to do. I should, Dave Ramsey, I should have like three months emergency money put up. I should have all these things in place. What I am worried about is whether I should pay off a car or pay off my home. I live in a condo and I could pay it off.
I could pay my car off. And if I do everything that I'm supposed to, I'm living biblically, correct? At the same time, I have never been out of the country and I've been wanting to go to Europe. And I'm like, I'm kind of torn between doing everything that I should do biblically in the right way and then yet at the same time trying to do a little heart's desire type of thing.
And I was wondering if you could help me with that because I'm struggling badly. Yeah, I'd be happy to weigh in on that. And you may be surprised to hear me say I don't think there's anything more biblical about paying down debt or giving than there is taking a vacation. Because part of what God entrusts to us, he wants us to enjoy. Now, we should do that in light of our values and our priorities and in the context of a well thought out plan that makes sense so we're not encouraging incurring debt unnecessarily and putting ourselves into bondage or robbing God of an opportunity or of providing. But at the same time, enjoying God's resources, being able to travel, build memories and relationships with people we love, that's perfectly appropriate. Again, as long as it's done in light of a plan and that plan should start with your values and priorities. What is God doing in your life and how can money as a tool help you best accomplish that? So I think we could work through that.
I mean, ultimately, this is between you and the Lord and if you decide to take a trip, I think that's great. We would want to try to though shore up some things that might make some clear sense as we just look at your financial life starting with the fact that, yeah, I think it would be really good for you to use this to develop an emergency fund of at least three months expenses. I think getting out of high interest debt is a no brainer.
That's credit cards. If you have any ongoing credit card debt, I would do that. Now, at the same time you do that, you absolutely want to make sure you have a spending plan that balances that you're willing to stick to because the last thing I'd want is for you to go and wipe out the credit card debt and feel really good about it. But because you're living beyond your means each month, it will come right back.
So let's just make sure that we're not treating the symptom. But the problem if there is one in terms of overspending. Beyond that, I think, you know, you need to look at does it make sense to go and pay off the car?
If so, great. That way you could take that monthly payment and recoup that into additional savings. Or put it away earmarked for your next car so you can buy that one with cash.
The house is great. But that one, you know, as you said, could eat up all of this money. And we certainly don't want to do that because you have other priorities.
So I think you just need to take them in priority order. But I wouldn't feel bad at all about reserving a portion of this for you to enjoy and get out and do some traveling. And I think you could feel good that that's certainly within God's plan for how we use his money as long as it's been thought about, prayed about, and it makes sense in light of an overall financial plan. But give me your thoughts on all that. You know, I've just been wanting to do it.
And I've struggled for many years. And this money is going to be kind of like a blessing. And it's almost like I feel like God's saying, Okay, here, I'm going to give you this money. Now, use it wisely.
This is going to be the last chance to get a bunch of money like this. And yes, and it's like, well, I could do some repairs to the house instead of pay the house off. But I do like that idea of maybe like, paying the car off. And then using that and just keep making the payments like I'm making the car payments, but put it into a savings account. I didn't really think of that.
Yeah, that could be a great option. Let's just break it down real quick. How much are you getting? Somewhere between 10 and $12,000.
Okay, so let's say it's 10. What would you need if you wanted to put away three months expenses? How much would that be?
Let's see. Probably about $1,000 a month is what I spend on. Really not much. I have just the one credit card because I got rid of all the other credit cards. But that is like only $1,000. So I knew that I need to pay that down to what about $600 or $400? I'd pay that one off. There's no reason to pay in 16 or 20% interest on that.
So I'd knock that one out. How much is left on the car? $4,000. Okay, and how much will your trip cost?
Probably about the same. Okay, all right. Well, I think what you could do is if you were to put $3,000 aside, knock out the credit card and then spend another $4,000 on the trip, that would be $8,000. You could go ahead and pay down the car another $2,000.
So now the car has been cut in half and then you could focus on just knocking that off as you can. I think that puts you in a really strong position to allow you to enjoy some of this. You're coming home to a fully funded emergency fund and credit card balance is at zero and you're on your way to paying off the car and then you can attack the condo next.
I think that sounds like a great plan, Karen. Do you get money so that I don't use it? Should I put that like maybe in a six month CD so it's not readily available?
The emergency fund? No, I would separate it from your regular checking account so it doesn't get used, but I wouldn't put it in a CD because by definition, you want this readily available for the unexpected and we never know when that's going to come. So what I would do is open an online savings account with an online bank. So you could go to bankrate.com and do a search to see who has the most attractive rates right now, but you'd open an online savings account, link it to your checking and then deposit it there so it's not too easy to get to, but you can get to it when you need to.
And those are paying about 4% plus right now, so that would go a long way to getting you what you need. Hopefully that's helpful to you. Hey, you enjoy this and I'm sorry to hear that it's a death benefit. Obviously, you've lost somebody that's important to you, but I know it'll be a blessing to them and to the Lord for you to use this wisely and honor him with that.
Clearly your desire is to do that or you wouldn't have called today. So listen, all the best to you, Karen, as you proceed from here and if we can help further, let us know. Hey, we're going to take a quick break then back. Steve, Cindy, Jesse coming your way just around the corner. You all stay right there. This is faith and finance where we apply the wisdom from the Bible to your financial decisions and choices, helping you give generously, save appropriately and pursue contentment and joy and peace of mind in your financial lives. We're going to be back with much more just around the corner. By the way, we've got a few lines open and time for maybe one or two more questions. The number 800-525-7000.
Stay with us. My name is Kent and I'm a member of Christian Healthcare Ministries. I have a friend who actually has great insurance and she recently had a life threatening experience and she was laying in the hospital bed afraid, not afraid for her life, but afraid of what her insurance would or would not cover. And as a CHM member, I can honestly say I just never have that fear.
I can't tell you the peace of mind that provides. Learn more about Christian Healthcare Ministries biblical cost sharing at chministries.org. Welcome back to faith and finance. I'm Rob West.
We're taking your calls and questions today on anything financial with lines open 800-525-7000 is the number to call to Fort Smith, Arkansas on bot radio. Brian, go right ahead. Yeah, I wondered what your opinion was were on a transfer upon death on a mortgage to my brother versus leaving it in a will to him. Would he pay more money on it for the improvements or how does that work on a transfer upon death?
Yeah, it wouldn't have any effect on him. Really, the only effect is on you in the sense that using a TOD, if your state allows it, avoids the probate process. So the transfer would happen a bit more efficiently in that, you know, it would pass outside of the probate process, which would charge expenses to the estate. And it's a little bit of a longer process.
So that's really the main difference. I mean, in terms of him receiving it, it would just happen a little quicker, but there would be no additional out of pocket expenses with him one way or the other. And from a tax standpoint, whether he receives it through the probate process, according to a will, or he receives it with a TOD, he's still in both cases going to get the stepped up cost basis as of the date of death.
So he would enjoy that either way. So I think, you know, adding the TOD would just pass it a little more efficiently, although I would say you still need a will to pass other assets and belongings. And if you had minor children, it'd be critical so you could name a guardian.
I don't have minor children. So I do appreciate all that information and love listening to your show. All right. Thanks, Brian. I appreciate that. Thanks for calling today.
Let's see to Lowell, Indiana. Hi, Ann. Go right ahead. Hi. Thank you for taking my call. I'm so sorry. Yesterday I called and this is my second call to you. I didn't get the answer to this question. Well, we start to charge after the first one, Ann. So, no, I'm just kidding.
You go right ahead. Well, we lived in Chicago and we sold our house and a rental property and we've moved out to Indiana and we're looking to buy another rental property. So we were wondering, is right now a good time or should we wait? Yeah, it's not a great time to buy. You know, if you are moving a primary residence and you're selling out of a home that you owned from an existing home, then you're going to still get top dollar with a very strong housing market, even though it's softened.
We really haven't seen much in the way of declines on housing prices. There is more inventory than there's been. So it's not a raging seller's market where you're having, you know, lots, multiple bids, people paying 20 and 30 percent above asking. You wouldn't think about having contingencies in there when you're selling because there's so many competing offers. We don't have that situation. There is still plenty of offers coming in, but it's a little slower.
You certainly can consider, you know, contingencies in your offer. So it really has converted to more of a buyer's market. But the things working against you right now are prices really haven't come down very much. So you're still paying top dollar in a sense, and that's driven largely by the fact that inventories nationwide are just not there. We need more houses in this country to meet the demand that we have.
That hasn't changed. And then secondly, we have high interest rates right now, which means if you're borrowing for this rental, you're already getting high rates. And then for a rental property, you're going to have to add one to two percent, probably on top of already high interest rates of six percent plus. So it just makes the cost of ownership pretty high. If you had the ability to wait, you might want to consider waiting maybe a year because I would expect interest rates to be coming down in 2024.
You would benefit from that. And we'll have to wait and see, are we going to hit a recession here? Most economists think we will.
How deep will it be? Depending upon how deep the recession is, if in fact we have one, that will have something to do with how housing prices respond. But if you're just looking purely at the entry point, I would say this isn't a great time, largely due to the fact prices are still high and mortgage rates are really high. OK, very good.
Thank you so much. I will say, though, and it really is market dependent. And so if you know the market, you've run the numbers, you've got enough in the way of a down payment, you want to be a landlord, you can generate the income that you're looking for.
Then I would say, you know, it's not something to immediately toss out. I mean, look at it like a business. And then you've just got to evaluate what's my entry point? What are the rental rates? How much will it cost for me to service the debt? Will I have enough to pay the taxes and insurance and maintenance and marketing and at least break even to pay the mortgage, if not have some income? And if all of those things work out, then great.
But if, you know, you feel like you're getting a little squeezed and perhaps you're not going to do as well as you thought in light of primarily where the interest rates are right now, then I think it's probably a good time to wait. We appreciate you checking in with us today. God bless you. Thanks for being on the program. Quickly to Oklahoma. Hi, Kim.
Go right ahead. I am calling I in myself and my brother inherited a home with my mother's passing. And she still owed some money on it. This was about a year ago.
So my husband and I got a loan and paid off the house and then paid my brother out so that it would be just our house. And it's gone through probate. And somebody told me that we've been working on it for, like, a year. It needed a lot of work. And somebody told me that I have a large portion of taxes to pay on it. Hmm. And specifically capital gains taxes or something else?
I have no idea. I would I was hopeful that this would be, you know, a lot of success for my husband and I and our family. OK, well, one of the benefits of inheriting a home as opposed to receiving it some other way, like a quick claim deed or something else, is that through the inheritance process, you get what's called the stepped up basis. So essentially, when you inherited the property, the cost basis, which determines whether or not there's any capital gains tax that's owed when it's sold, the cost basis is reset to the market value as of the date of death. And then if you turn around and sell it on a timely basis, essentially there's no gain because the market value was stepped up to the date of death. You're now selling the property for what is probably that same market value. And now there's no gain and you keep the full proceeds. So unless there's some sort of tax lien out there, like a federal tax lien or some other type of tax lien, which you could check either by searching at the IRS dot gov website or the county records office where the deed is filed just to see if there's any liens on the property. Apart from that, there shouldn't be any taxes that you would owe. That's fantastic. We already did check the taxes at the county level and there aren't any liens against it. Okay, great. Yeah, so you should be in good shape. Just check with your CPA because obviously anytime you have something unusual like this that's out of the ordinary, you just want to make sure everything's being filed properly from a tax standpoint.
But generally speaking, you should be fine with capital gains. Thanks for your call today. Hey, we're almost out of time, but I wanted to let you know that you don't ever have to miss a program. Just download our Faithfi app for your mobile device and take us with you anywhere. Thanks for joining us today. I look forward to talking with you again next time on Faith and Finance. Faith and Finance is provided by Faithfi and listeners like you.
