Should Churches Borrow?

Have you heard about the change happening across the U.S.? Learn more at JoinChristianCommunity.com. That's JoinChristianCommunity.com.

And even within that agreement, there's still plenty of room for debate. For example, should churches borrow for building and expansion projects? We'll explore that issue today 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 journey. It's a difficult topic. Should churches borrow? The Bible never says that borrowing is a sin, but it does warn against it, such as in Proverbs 22, 7, the rich rules over the poor, and the borrower is the slave of the lender. The late Larry Burkett recognized that teaching on the subject of church borrowing is difficult because it's really about an attitude rather than an absolute, but that anything taken to excess is destructive, especially debt. Financial teacher and author Ron Blue has laid out several principles for borrowing.

It should cost less than the benefit derived from it, have a guaranteed way of repayment. Responsible parties must be in unity about the borrowing, it must give spiritual peace of mind, and it must achieve God-given goals. Art Rayner, financial author and director of the Institute for Christian Financial Health, welcomes the debate over church borrowing as believers with different viewpoints seek the best ways for their church to advance the gospel. Art offers Psalm 112 5 to those who might believe that borrowing is sinful. It reads, Good will come to the one who lends generously and conducts his business fairly. Art says, quoting now, that God would not reward someone, the lender, who is knowingly participating in the sin of another, the debtor. So while debt is not a sin, it certainly is a burden.

Art offers three biblical principles to guide churches grappling with the issue of borrowing for church construction, expansion, or other projects. First, use caution when considering taking on debt. Proverbs 22 26 and 27 reads, Do not be one of those who enters agreements, who puts up security for loans. If you have nothing with which to pay, even your bed will be taken from under you. A church should never find itself in a position where it can't repay a debt.

Think of the bad witness that would make. Second, always remember that the congregation will be burdened by the debt taken on by the church. Again, Proverbs 22 7 says the rich rule over the poor and the borrower is a slave of the lender. That means the monthly debt payments will reduce the amount that the church has for international missions, its benevolence and other outreach efforts. Finally, and perhaps the most dangerous part, is that debt provides the opportunity for sin.

Psalm 37 21 says the wicked person borrows and does not repay, but the righteous one is gracious and giving. Another way to say that might be to ensure the debt is collateralized and the church always has a way to repay the loan. Now, despite all of these warnings, plenty of churches do borrow with great results because it can definitely expand ministry. If your church agrees to borrow for a building project or other ministry advancement, it's important that you choose the right financial institution to partner with.

That partner should share your Christian values and world vision. We think you'll find that with Christian Community Credit Union, an underwriter of this program. CCCU defines itself as unabashedly Christian and an organization that understands ministry. If you think a credit union is too small to handle your church project, consider that CCCU has funded over 1 billion in ministry real estate loans and has 5600 shared branches nationwide. They also lend for church ministry equipment and vehicles. For over 67 years, CCCU has provided individuals, churches and ministries with the financial tools and guidance to thrive and help them transform the world through their generosity.

By the way, you don't have to borrow to impact the world for the gospel. When you open an account at CCCU, the money you deposit helps churches, ministries and individuals thrive. You can find out more when you visit them on the web at JoinChristianCommunity.com. That's JoinChristianCommunity.com.

Our heart in this is that you as a church lean into this conversation, seek the Lord, study the scriptures and come together as lay leaders and church leadership to find God's heart for your church so that you can advance toward the calling that he has placed before you. All right, we're ready to take your calls and questions. That number, 800-525-7000. That's 800-525-7000.

Call right now. I'm Rob West and this is Faith and Finance, biblical wisdom for your financial journey. Stay with us.

We'll be back with much more just around the corner. Have you ever wondered where your money goes when you deposit it in a bank? Christian Community Credit Union believes in helping advance God's kingdom through everyday financial transactions. For over 67 years, they have provided values aligned banking solutions to thousands of Christians and ministries. Consider Christian Community Credit Union as your banking institution by visiting JoinChristianCommunity.com. Membership eligibility required. Each account is insured up to $250,000.

This institution is not federally insured. As the leading advocate for the Christian financial industry, Kingdom Advisors serves the public by promoting the integration of a biblical worldview across every aspect of the financial services industry. And we serve a growing network of thousands of Christian financial professionals, equipping and empowering them to carry biblical financial wisdom to their clients, peers, and community. For more information, visit KingdomAdvisors.com.

That's KingdomAdvisors.com. Great to have you with us today on Faith and Finance. So glad you're along with us today. Looking forward to taking your calls and questions on anything financial, whatever's going on in your financial life today, we'd love to talk about it. Or if you have a testimony, perhaps you've seen God at work in your financial life.

I know you have. God is our provider, and so every dollar is a gracious gift from him. But how is that working out? How is that being applied in light of biblical wisdom?

Do you have a story you might want to share of God's faithfulness in your life or how you've seen biblical truth at work in your own finances? Share that with us today. 800-525-7000. Again, that number is 800-525-7000. We do have lines open today. We're looking forward to taking your questions on whatever you're considering in your financial life so you can call right now.

Let's begin in Arkansas today. Daniel, you'll be our first caller, sir. Go ahead. Hi, how are you today? Good. Thanks for calling.

Yes, sir. My question is, I've been seeing a lot of these advertisements on the internet and Facebook and places like that about debt cancellation and there's one going on right now if you're a veteran and you owe like $20,000 or $30,000 or more, you know, you get it wiped out and stuff like that. Is this a legitimate deal or is this just a spam?

Yeah, I wouldn't touch that. There is no such thing as debt cancellation. What they may be referring to, I mean, number one, it could just be clickbait and be completely spam. If there is something behind it, it's most likely what's called debt settlement where essentially they will ask you to stop making payments on your debt. You start paying that same monthly payment to them where they start to build up kind of a war chest, so to speak. They're going to come in behind you all the while your credit is being trashed because you've stopped making payments and now it's going to collections and they're going to start hounding you for payments and then they're going to try to come in behind you and negotiate a reduced payback or settlement of some kind and try to use the money that you're accruing.

It's a disastrous strategy in my view. So I think the best approach if this is credit card debt is something called debt management. But let me ask Daniel, what kind of debt are you talking about? Oh, I'm only looking at, if I combine everything I've got, I'm only looking at about $20,000 or something like that.

All right. And what type of debt is it? Well, one of them is just a loan where I compiled some other things to make it easier. And then one's like a car payment. And that's, I mean, I don't have a whole lot, but I mean, you know, I'm like everybody else.

If there's a cancellation broken, I'd like to know about it. Absolutely. I can certainly understand that.

Yeah. You know, you need to be careful with that, but the, and I would say veterans have to be vigilant to avoid scams. So you got to always research anything that sounds too good to be true.

And I think this would certainly be one of those. No, you're, you're not missing anything here, Daniel. So I think the key is keep your lifestyle at a minimum, try to free up as much surplus as you can. And in this case, with just a consolidation loan and a car loan, I'd probably go, you know, pay the minimums on both, but attack the one with the highest interest rate in this case. And you know, sooner rather than later, you'll be out of it.

And hopefully we don't go back there, but in terms of debt cancellation, there's, there's not anything out there that you might be missing. They're just trying to get you to click something. The way I'm doing it right now is I'm attacking the lowest balance. So I can free up what I'm paying on that to pay on the next one.

Yeah. And that's a great strategy as well. We certainly like that with credit cards, but it can work in other contexts. What you're talking about is they, what they call the snowball method where essentially you keep everything current, but you attack that smallest balance that's going to do two things.

You mentioned one of them, it's going to eliminate that quicker. And then as you, to your point, you're going to recoup that monthly payment and that's going to happen sooner rather than later. And then you can use the surplus you were sending plus, you know, that monthly payment to then go after the one with the larger balance. The second thing is you get that quicker win, which gives you that, you know, boost that you've accomplished that you, you know, tear it up and celebrate that.

And that's going to give you some momentum, hopefully to keep this, this train going, especially if you're having to make some sacrifices along the way in order to speed that up and you're, you're giving some things up to create that surplus. So I like that strategy, Daniel. That's a, that's a great approach. Thank you, sir. All right. God bless you. We appreciate you being on the program, Daniel.

Thank you for your service to our country. My friend. We're grateful.

Let's head to Florida. Hi, Diana. Go ahead. Hi. I really appreciate your show and the knowledge that you pass on to people.

And I just wanted to ask you a question. I'm selling my house in Florida and I'm moving out of the state. I own my home outright and the proceeds that I will make off of the home. I will be able to buy another home outright, but I wanted to see, I'm going to have, you know, a surplus from that. So I was wondering I I'm want to be retired. I just recently quit my job or retired from my job and I want to stay retired.

Should I use that money to live off of, or should I go ahead and draw my social security or invest that money? Very good. That's helpful. So what will you have left over after you purchase this new home free and clear?

About 150. Okay. And so that'll be a taxable account, meaning it's not in a retirement plan. And then do you have any other retirement assets, Diana?

I do. I have about 220 in a managed assets. Okay.

All right. And then what will you be living off of in retirement? As far as the amount? No, just the what income sources will you have? Just social security, assuming you didn't start to draw from any of these. I just want to know what other income sources you have. I don't. That's what I'm wondering is if I should use the sure, possibly 150,000 or go ahead and get security.

Yeah, it's a good question. I just want to make sure whatever we do is sustainable for the long term because of the Lord Terry's and if he doesn't doesn't matter if he does, and you're in good health, you know, we need this money to last a long time. What is your age? If you don't mind me asking?

I'm 64 and a half. Okay, very good. And you've already retired or that's upcoming? I did last December. I did it to get the home ready.

I did. I do all the work myself. So I did it to get the home ready. And I've had a lot of interest on the home.

And so now I've got a contract on it. And what have you been living off of? Where have you been pulling your living expenses?

From savings. Okay. And what do you have left in savings not counting the 220,000? About 10,000.

Okay. And have you looked at if you were to take social security right away? Do you know what that monthly benefit would be? It's going to be reduced from your full retirement age, right? About 1500.

Okay. And what are your monthly expenses going to be? Have you done that budget for your kind of new situation with the smaller home and so forth? I don't know any money on anything. I've paid everything off.

It's just my expenses as far as utilities and groceries. Yeah. Well, I think I think you're right.

I think we are going to need to start drawing off of this. And I think unless you want to go back to work for a period of time, which it's always great to delay social security as long as you can. If you could get to full retirement age, I'd be thrilled with that because then we're locking in this higher check for the rest of your life. In fact, if you could wait beyond full retirement age, you'd get that check up 8% every year. I understand you're saying you want to be fully retired and so that's fine. But I just want to make sure you have enough so you're not, you know, regretting taking it early, you know, five or 10 years down the road, if it's not enough. But I think the bottom line is you've got, you know, enough assets here about 370,000 that you'll have and that should generate about $1,200 a month, 4% a year.

So if you can live off the reduced social security plus the $1,200 a month, you know, and make that work in your new home, then I think that's the key. I'd get connected with a certified kingdom advisor when you get there and you can do that at faithbuy.com. Hope that helps. We've got some lines open today here on faith and finance. You can call right now, 800-525-7000. We'll do our best to give you biblical wisdom for your financial decisions.

Stay with us. We are grateful for support from the Eventide Center for Faith and Investing. ECFI is an educational initiative of Eventide Asset Management that seeks to help Christians understand and practice biblically faithful investing. They do this through their podcast and online journal featuring articles from industry thought leaders and their course called Discover God's Story for Investing. More information is available at faithandinvesting.com. That's faithandinvesting.com. Hey, great to have you with us today on faith and finance.

We've got still some lines open today. We're ready for your questions on anything financial. Are you thinking about your lifestyle that is staying on budget? You know, having some margin living with beneath your means so you have margin is so key to your financial success. I mean, it really is the bedrock of financial decision making because that margin is the only way you can fund your long term goals and objectives, which means you have to be on a budget.

You've got to have a plan that not only gives every dollar a job, but you got to stick to it. And I don't know if any way to do that apart from having some system that aligns with the way you want to manage money so you have real time visibility into what's going on in your financial life so you can make course corrections throughout the month. That's why Julie and I, my wife and I use the faith via app, we have all of our envelopes there digitally, we know exactly what's in each envelope, we can make decisions throughout the month, and course corrections along the way to stay on budget. If you don't have something like that, I'd love for you to check out the faith via app.

You can do that directly in your App Store, Google Play or Apple, just search for faith VI, or go to our website, faith fi.com and click app, you can download it today. Alright, let's head back to the phones. Two lines open at 800-525-7000. You can call right now. Let's go to Tennessee.

Hi, Steven, go ahead. Hello, I am calling because my question is about my retirement investment with my employer versus my investment in a high yield savings account. I've been with my employer for three and a half years and during that time, according to the website, as I understand it, its growth has been at 2.47%. My high yield savings account rate is at 5.2%. Yeah, so I'm trying to understand which investment would be most beneficial.

Yeah. Well, there's the type of account and then there's the investments in it. With regard to your long term savings, so your investments retirement savings, you absolutely want to be contributing to that 401k. And I would generally recommend it so long as you have what I call an emergency fund in place, Steven, which is three to six months expenses for the unexpected, and that should absolutely be in that high yield savings. As long as you've got that in place, then you want to be funding all of your long term savings, not in that high yield savings. And I'll talk about why that is despite these high rates, but you want to do that in your 401k. And a target for that would be 10 to 15% of your take home pay. And you're right, that's going to be beyond what they're matching.

Now, why would you want to do that? Well, the benefit of getting that into the 401k is you've got the tax deferred growth. So you have a tax advantage situation there. Number one is if it's a traditional 401k, you're getting a deduction as the money goes in.

That's great. Number two, it's growing tax deferred, meaning as those investments grow, and we'll talk about the lack of performance in a moment. But as they grow, you don't have taxes putting a drag on the returns.

They're free to grow fully without any effective taxes inside the 401k, which is why that's absolutely the place you want to be. Now, what about the performance and and why wouldn't we want to be in the high yield savings if you're getting five there versus two? Well, I think we've got to come back to what are you invested in, and take a look at that, because the market has done well, if you're looking at performance over the last 24 months, you should be doing much better than 2%. So that tells me, you know, that either you're in their cash account, or you're in a segment of the market that just hasn't performed as well. Maybe you have it all in small cap stocks, which haven't done very well until most recently. And you know, maybe you need to diversify into a mix of large cap and small cap and international and domestic. So it really requires that you or somebody helping you take a look at what are you currently invested in the 401k and find out what is the reason why you've not had the performance you expected and frankly should have had in the last 12 or 24 months. But that's not a reason to abandon the 401k. Because the other thing is, keep in mind, if you'd use high yield savings, you're probably in a taxable account, number one, and number two, those 5% high yield savings interest rates are temporary, you know, the Federal Reserve is going to get those rates back down, as soon as they feel like, you know, they've gotten inflation low enough, they're going to start dropping those rates quickly.

So that's a very short term opportunity. And when we're talking about retirement money, we're talking about, you know, money that's got to grow over the decades. And even once you hit retirement, if you're in good health, we still need to have a three decade time horizon at a minimum, because you could live well into your 90s.

So even at 65, we're talking 30 years. So I think, you know, that's kind of my thought on that. But give me your any questions or reactions to that. Okay, yeah, I do understand the response that you've given. And I think that basically answers the question that I Okay, yeah. So I think the key is, do you need somebody either somebody who works for the plan administrator, you know, if you're at Fidelity, or Schwab, or whoever it is, you know, they should be able to, you know, help you understand what the investment options are. Or you could reach out to a certified kingdom advisor on our website and, and get somebody to help you think through it.

But it could be that there is a change in the investment mix that's needed inside that 401k. Lord bless you, Steven. Thanks for calling today, sir. Let's round out the program today in Bradenton, Florida. Hi, Dorothy. Go ahead. Hi, Rob. Thank you for your ministry.

Hi. So Rob, I was calling about your program I heard before on a reverse mortgage for my mother who's 90 years old. We actually was in conversation with Movement Mortgage. And we started the process, but I kind of got cold feet because of the fees. So I'm wondering what your thoughts are about moving forward with this? Well, you know, it's a great question. And you know, are there fees more than a conventional mortgage on a reverse mortgage?

Absolutely. I mean, you've got the initial mortgage insurance, the premium to the FHA, which covers the fact that you won't ever have to worry about the loan value growing more than the home's value because they'll step in and pay it if you do. That's 2% right up front. And then there's a half a percent per year for annual mortgage insurance premium. And then there's a few other fees, origination fees, and then some smaller ongoing fees in addition to the interest, of course. I think the key is, you know, I think the fees are reasonable.

The big idea is, does it make sense as a part of the tools in your toolbox for this season of life? If you have the ability to get out of debt completely and cover your expenses with your income, great, do that and be completely debt free. But if you find yourself or you have, in this case, your mom finds herself where she's in this season of life, she's sitting on a bunch of home equity and she's struggling to pay her bills, then I think the reverse can make a lot of sense because it can give her, you know, the ability to either eliminate a mortgage or get a monthly income stream that might be the difference in her being able to cover her bills and have the care she needs and enjoy the rest of her life. And then at her death, that mortgage balance is paid off and the rest goes to you and your siblings.

So I like it a lot if it fits. Let's do this. You and I can finish up off the air. Stay right there.

That's going to do it for us today. I hope you found something encouraging and helpful today. A big thanks to my team. I certainly couldn't do it without them. Amy, Dan, Taylor, and Jim. May the Lord bless you and I hope you'll come back and join us next time on Faith and Finance. We'll see you then. Faith and Finance is provided by Faith Buy and listeners like you.