Why Debt Management Is Better with Neile Simon

This faith and finance podcast is underwritten in part by Christian Credit Counselors. If you're struggling with credit card debt but don't know where to start, our trusted partner Christian Credit Counselors offers a debt management program that can get you out of credit card debt 80% faster while honoring your debt in full. Contact them to get out of debt today at ChristianCreditCounselors.org. If you're drowning in debt and someone offers a lifeline, make sure it's not really an anchor.

Hi, I'm Rob West. You have a few different options for paying off debt, but they're definitely not all equal. You have debt settlement, debt consolidation, and debt management. Neely Simon joins us today to explain the difference. And 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, it's always a pleasure to have Neely Simon with us.

She's a certified credit counselor with Christian Credit Counselors, an underwriter of this program. And Neely, it's great to have you back with us. It's a pleasure to be here. Thank you so much for having me on the show. Neely, we get calls from folks who need clarification about the different kinds of debt repayment plans.

So it would help to go over these in detail and explain how each works. Does that sound all right? Sounds great. I'm ready. Let's do it.

All right. The one people ask the most about is debt consolidation. Sounds self-explanatory, but there's more to it, isn't there?

Absolutely. So debt consolidation loans are often appealing because your debts are rolled into one loan, which usually has an interest rate between 15 and 22 percent, depending on your credit score. And it allows you to keep your accounts open. It's attractive because it's a quick fix. However, it doesn't require changing your spending habits, which can potentially lead to doubling your debt in a hurry, making it a dangerous solution for many people.

Proverbs 13 11 says, wealth gained hastily will dwindle, but whoever gathers little by little will increase it. Yeah, let me just affirm that I have talked to countless callers who go with the consolidation route. They call me back six months or a year later and say, guess what? The credit card debt is back. But now I have the consolidation loan on top of it.

So changing the behavior is key. All right, Neely, another method for getting out of debt is what's called debt settlement. I'll go out on a limb and say that you're not a fan here either. Tell us about it.

Not a fan at all. So debt settlement companies use unethical practices because they're not transparent with the consequences and can be very misleading. Debt settlement companies require that you stop paying your creditors so you destroy your credit and it can be almost as damaging as a bankruptcy.

The other thing you need to take into consideration is the amount that is written off is taxable income and you will receive a 1099 C at the end of the tax year. But most importantly, creditors start seeking legal action after a year, give or take of nonpayment, which can result in a lien on your property in most states and potential wage garnishment. So as Christians, we are called to pay back our debts and take responsibility for our actions.

Psalm 37 21 states the wicked borrows but does not pay back. Yeah. All right.

We've only got time for one more. This is, of course, my preferred way. And it's what you offer at Christian Credit Counselors. It's debt management. Explain that to us.

Sure. So credit counseling offers a debt management program that really enables you to get out of debt the right way because you honor your debt in full. We're able to lower your payments and your interest rates. You continue making monthly payments to each and every creditor on the program.

The payments are just made through us and are consolidated into one monthly payment. You do need to be aware that the accounts you choose to enroll do get closed by the creditors, but you're not required to enroll all of your accounts. And then our interest rates will range in between one to 12 percent APR, allowing you to pay off your debt 80 percent faster from a biblical approach. Proverbs 3 27 states do not withhold good from those to whom it is due when it is in your power to do it.

That's well said, Neely. And that's why this is my preferred option to get you out of debt once and for all and change your behavior in the process. The team at Christian Credit Counselors leads with education. So it's a free consultation as they educate you about your options and how debt management works. It's also a biblical solution in that they're going to pray with you, encourage you and really journey with you in your faith.

At the same time, you're addressing your debt repayment. You can check them out at Christian Credit Counselors dot org. And Neely, we're so thankful for our partnership with Christian Credit Counselors over a long time.

We appreciate you being here today. Thank you so much. God bless. That's Neely Simon with Christian Credit Counselors. Again, that Web site, Christian Credit Counselors dot org. That's Christian Credit Counselors dot o r g. All right. A quick break and back with your questions today at eight hundred five two five seven thousand. That's eight hundred five two five seven thousand. I'm Rob West and we're just getting started.

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Do you feel like your hands are tied with debt preventing you from serving God? If you have credit card debt, Christian Credit Counselors can help through our debt management program. We can get you out of credit card debt about 80 percent faster while honoring your debt in full. For more information on how Christian Credit Counselors can help visit Christian Credit Counselors dot org. That's Christian Credit Counselors dot org or call eight hundred five five seven one nine eight five eight hundred five five seven one nine eight five. Well, I'm so glad to have you with us today on faith and finance.

My name is Rob West. I'm your host. We're looking forward to taking your calls and questions today as we turn the corner and deal with anything financial. The number to call today is eight hundred five two five seven thousand. We've got lines open. If you have questions and you'd like to talk about what you're considering in your financial life will be encouraging to you. We'll bring godly wisdom to bear in light of scripture and help you make a wise decision.

You can call right now with any financial question. Eight hundred five two five seven thousand. Again, that's eight hundred five two five seven thousand in the news today before we head to the phones. Employment scams surged last year as criminals leveraged artificial intelligence to steal money and personal information from unsuspecting job seekers. Listen to this. According to a recent identity theft Resource Center report, consumer reports of job scams jumped one hundred and eighteen percent in twenty twenty three from the prior year.

Here's what happens. Thieves generally pose as recruiters and post fake job listings to entice applicants. And then they steal valuable information during the quote interview process. They often post these phony listings on reputable websites. This might be LinkedIn or Monster or other job search platforms. And it makes distinguishing between real job listings and scams challenging. A chief danger is divulging information about financial accounts or sensitive personal data like a Social Security number that criminals can use to steal a job seeker's identity. According to the FTC, consumers reported losing.

Listen to this. Three hundred and sixty seven million dollars to job and business opportunity scams in twenty twenty two. That was up seventy six percent from the previous year.

The typical victim lost a whopping two grand. A.I. advancements allow scammers to generate these job listings and recruitment messages that look more legitimate. These tools help to refine, quote, the pitch to make it more believable, especially if you're dealing with somebody who is not from our culture.

Maybe they would have normally not been able to make the listing sound official, and yet A.I. is helping them make that more believable and compensate for those cultural and grammar differences and language uses. Moreover, the rise of remote work during the pandemic has made workers and job seekers more comfortable with digital only transactions. Recent college grads, immigrants or elderly people reentering the workforce may think digital only hiring is the new normal, especially for fully remote jobs.

But hiring generally doesn't work that way. So let me help you protect yourself from job scams. Here's what you need to know, according to the Federal Trade Commission. Number one, don't have a false sense of security on well-known job search platforms. Just because it's a brand you're familiar with doesn't mean it's not a fraudster. Independently verify the company exists and is hiring. Don't accept a job offer until you've done your own research. Be wary if you didn't initiate contact with a prospective employer or recruiter.

Instead, reach out to the company directly using legitimate contact information. Only limited personal information is generally required during the application process. So I'm talking about name, phone number, job and education history and perhaps an email and home address, but really nothing beyond that. Digital only interactions are a red flag. You know, they're going to want you at the very least to get on a Zoom call and look at you face to face.

If that's not happening, then you need to be careful. Phone calls are not a guarantee of security. Honest employers won't send you a check to buy supplies or anything else and then ask you to return the leftover money. This is a fake check scam that we're seeing attached to these. And then finally, please be careful about something that sounds too good to be true.

So a job ad for 100% remote work requiring a very few skills and a large salary should be a big red flag. I know that's a lot of information, but I just want to keep you protected. You know, as we see more advancements in digital only commerce and artificial intelligence, there's a lot of benefits to that. But we're seeing a rise in the number of scams and people trying to get your personal and sensitive information to steal your identity. So just be on your guard. I hope that helps you.

All right. We're going to dive into your questions today on anything financial. I'm ready for you. Let's take those calls at 800-525-7000. I have two lines open, but they won't be open for long. So call right now. Let's head to Indiana and welcome Hank to the broadcast. Go ahead, sir. Hey, Rob, I really appreciate your show.

I've learned a lot from you. And just now was it was an idea, but my idea, what's going on right now is, is that I'm hearing that these people are getting scammed out of their money, out of their bank accounts. And can I mention three banks that sure happened to chase Citibank and even the military, that USCA, I think it is. It was on USA.

I watched it. OK. And they're they're allowing big amounts of money to come out of these accounts and not check in to see whether it's legit or not. I don't know how it's happening, but I listen to your advice and started doing online banking with with I think it's Citibank.

It's CIT. And now I'm thinking, hey, maybe this isn't a good idea. And I'm even hearing people saying, let's stop dealing with banks and putting the money underneath the mattress. If people would start doing that, these banks would go broke.

Yeah. Well, the problem with that is especially in light of high inflation, you're losing purchasing power with that money under the mattress. So I think there is a middle ground there where we can certainly continue to earn interest and have the conveniences and the protections associated with having a banking relationship and not keeping all that cash at home.

And yet still staying, staying safe in the rise of some of this rise in criminal activity. What I would say to you is, first of all, online banking is no different than using an electronic means to do business with a brick and mortar bank. More and more people, even with the brick and mortar relationship, are accessing their account online.

They're using electronic bill pay. So you're opening yourself up to the same potential threats any time you're doing online banking, whether it's with an exclusively online bank or online access to a brick and mortar bank. So I think that gets us back to what are the things I can do and then what are the protections in place if this happens.

Or maybe I should say when it happens, because it will. So banks are responsible for protecting their customers. Now consumers play a crucial role in safeguarding their financial information as well. So with regard to the bank's responsibility, I mean, for instance, the Electronic Fund Transfer Act provides important protections when you suffer unauthorized withdrawals from your account. So as long as a person promptly notifies their bank that access to their account has been stolen, the law limits a person's losses to $50. And this applies to transfers initiated electronically. So I'm talking about a computer or a mobile device transfer that you can read about that at the CFPB's website, Consumer Financial Protection Bureau. With regard to your role in that, I would say a few best practices are don't log into your accounts or do business over public Wi-Fi.

Don't click on links in emails. And the key is this is important for the Electronic Fund Transfer Act. You've got to identify it on a timely basis.

So you've got to be monitoring those accounts and your credit reports, but certainly those accounts and looking for unauthorized transactions. Thanks for your call, Hank, for taking your calls and questions. A few lines remaining open right now at 800-525-7000.

Call right now and we'll be right back. We have three money management options to choose from. So find an option that fits your unique needs.

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That's CHMinistries.org slash faith. I'm so glad you've joined us today for faith and finance for taking your calls and questions today. 800-525-7000 is the number to call. Let's head right back to the phones to Yorkville, Illinois. Kirsten, thanks for your call today. Go ahead.

I have a question. So I called before and I will say thank you for what you guys provide because I have. So my husband passed away just about six years ago and I did have to move and I bought a house.

And just knowing what things to look for and what kind of questions to ask. I did take that PMI for just six months. So that $120 total because it was just $20 a month. That saved me thousands of dollars of interest. I didn't have to pay because there was a difference of paying.

They were charging more to come up with the 20 percent down payment paid less than knowing I had the money. And I paid later. So I saved myself.

I don't know how many thousands of dollars. So for that, I say thank you. Awesome. So my question.

Yes. So my question is, after I was paid for for my husband's funeral and I finally bought a headstone, a memorial stone, I still have about $35,000 just shy of that sitting. I didn't know what to do with it. So I put it in the money market checking account.

I really haven't touched it since I bought the headstone, but it doesn't seem to make very much. So I'm just curious if I should have it somewhere else. I see that like the C.V. rates are pretty good. And that month is a combination of rainy day fund slash emergency fund. Like put there. Forget about it.

Take things trying to be. I want it to grow because for what I have, I have six kids at home. One is now in college.

Five are still under 18. And I wasn't sure if I was going to be staying home or continue to work. I do get Social Security for them. I work the minimum.

You know, I work full time, but it's the minimum I can to keep my benefits. So I have it available to me. But I have lots of moving parts.

Yeah. Well, incredible, Kirsten. Well, what you're doing is amazing. And wow, the Lord is obviously just continuing to show his faithfulness to you. You're making some incredible decisions and managing a lot.

So let me just commend you for how you are being that wise and faithful steward over what God has entrusted to you. Let me ask you, you know, with your the work that you're doing and the Social Security for the kids. I mean, is that enough to cover your expenses? Are you getting by every month? So essentially right now, what I have coming to me, the only way to purchase I were considered, you know, we're below the poverty line.

And what I make is it's minimal. We were only able to buy the house. I was only able to buy the house because of the Social Security that comes in.

I get what is I think it's three hundred seventy two for the five kids that are still under 18. And then I qualify for other systems and this and that for, you know, like whether food or school. So right now the Social Security pays my mortgage. And then I'm conscious, though, because I had one age out last year that every two years I'm losing income.

And I'm conscious that in about four years or so, I'm going to have to take a different job. Sure. Sure. Yeah. But you'll obviously, you know, potentially they'll be out on their own. And so you'll have the ability, I think, to work a little bit more with less responsibility at home, you know, as each one moves on to what the Lord has for them. So you're not having to dip into this twenty two thousand each month.

This has really been a consistent amount. Yes, I haven't paid to pay for the headstone. But aside from the headstone, I haven't touched it. Wow. Amazing.

You're doing an incredible job. Well, I would move it to maximize that interest rate. I wouldn't put it in a CD because you do need it available if something unexpected were to come. And we know the unexpected will come at some point. But, you know, by getting that interest rate up to the current high yield savings rates at five percent, you know, you could add up eleven hundred dollars to that over the next 12 months.

I mean, they will fluctuate. But the good thing is with FDIC insurance, it's very safe, almost as safe as you can get. And you're getting a good rate of return. So what you probably want to do is just go to Bankrate.com and look for one of those high yield savings accounts at one of the online banks that's highly rated, that has no fees, no minimums and is offering something competitive, which is going to be five percent plus. And then you transfer it over from the money market, link that to your checking account, and then just let that continue to grow. Apart from that, I mean, I think you're doing a fabulous job. It sounds like you even have a retirement plan that you're contributing to, right?

I do. I have an employer sponsored account and I think I'm just about my fifty, not fifteen percent, I think is just about where I'm at. I've been there for nine years. And they match, I think, the first three dollar for dollar and I think, you know, half a percent for the next like one and a half or something along those lines. And I did open up a Roth IRA. And I remember when I said that was the thing is this money, this particular twenty, twenty five thousand dollars that I have put away. I remember when I opened up my Roth IRA, I just wanted to make money in there.

I just, I was uncertain if I should put any more of that into that Roth because it was, again, in case I chose a home or what I was, you know, I wasn't sure what I was going to do. But I contribute fifty, aside from my check, going to my work sponsor, I put fifty a month to a Roth. Excellent. Way to go. I love that. I think that's great. I wouldn't add any out of that twenty two thousand. I'd hang on to that.

But if you can continue systematically contributing to that Roth, that's fabulous. Are there any other kind of pain points that you have, things you're struggling with? I mean, would it be helpful to you if we had somebody come alongside you and just help you think about your budget? Or do you feel like you have a good handle on that? I do need help just because I used to have one after about the fourth kit.

I was never able to keep everything in my head. Yeah. OK, well, let's do that. Yeah, we'd love to have a certified Christian financial counselor connect with you and work with you, you know, remotely over Zoom calls just to get everything set up, get you in the FaithFi app. We'll cover a pro subscription for you. They can help you get that budget in place, establish some rhythms on how you can manage that using the envelope system.

There won't be any cost to you. We're going to pay for all of that and just make sure that you have some confidence that, you know, the system is working for you and that you, you know, you're already doing a fabulous job. So it's not like anything's broken here, but we'll just give you that sounding board of somebody that can help you get everything set up and create the control system for the flow of money in and out on a monthly basis. OK. OK. Lovely. Thank you. Awesome. You are welcome.

So you stay on the line. We'll get your information and then we'll get that certified Christian financial counselor in touch with you. And then I'm also going to send you a book. It's called Wise Women Managing Money. And it was written by a good friend of ours, Miriam Neff, after her husband passed about this role that you've now stepped into that a lot of women are stepping into where, and this isn't always the case, but in some cases maybe they were not making the financial decisions or, you know, their husband was the one kind of doing all the daily routines. And again, that's not always the case, but in some cases it is. And this might just give you some additional insights when you have some time.

And I'm sure free time is precious. But when you do, I think this book will be a blessing to you. So God bless you. Folks, we're so glad to have you along with us today. We covered a lot of ground, but always look forward to being invited into your stories and taking you back to God's word and helping you consider your financial decisions in light of sound biblical wisdom. I hope you have a great week. Let me say thanks to my team today. Certainly couldn't do this without them, Jem Henry, Devin Patrick, and Robert Youngblood handling our phones today. Here on Faith and Finance, we want to bring you God's wisdom for managing your financial decisions. You can learn more and listen to our broadcast archives when you head to faithfi.com. In the meantime, may the Lord bless you and we'll see you next time. Bye-bye.