Humorist Will Rogers often wrote about wasting money. He once said, too many people spend money to buy things they don't want to impress people they don't like.
And of course, that one-liner would be even funnier if it weren't so true. Today, financial planner and teacher Rob West talks about that and other ways that we spend money foolishly. Then it's your calls and questions at 800-525-7000.
800-525-7000. I'm Rick Trozlin for Steve Moore today and what the experts say about wasting money. We'll talk about that next here on Money Wise Live. Well, Rob, it's nice to be with you on this side of the microphone again.
Steve Moore is off today. We're pretty sure he's not out wasting money, but the jury's still out as far as we know. Yeah, well, again, the jury's still out on that one. I did think of another piece of financial humor, though, in looking at this program, and that is you don't need an expert to waste money, but it sure helps. Yeah, and that is a good one. But to be fair, Rich, sometimes the experts do get it right on occasion.
I'll trust you on that one. But I guess for fairness, who are these so-called experts and why should we listen to them? Yeah, and this stems from a recent article in the Wall Street Journal, the paper noted for expert coverage of all things financial. The Journal recently polled a group of personal finance experts, authors, and even a Nobel Prize-winning economist about the things people waste money on in their view. And since we started out talking about impressing others, one of the biggest money-wasters is something they call compensatory purchases.
That's a fancy name for keeping up with the Joneses. And it's anything, frankly, you spend money on to make other people think you're successful, but in reality, you're doing it because you don't feel successful. Compensatory purchases would include luxury goods, high-end clothing with perhaps visible logos, not pointing any fingers, to indicate that you have money and status. But the experts point out that these can include small ticket items too, like designer coffee. Well, I'm going to argue with you there.
I would say that coffee is not compensatory, I think that you're right. It's life support, but I digress. Okay, what else have you got? Alright, well going back to big ticket items, and this is one of the biggest, buying too much house. One of the experts explained that people's thinking hasn't caught up with technology that enables us to live comfortably with less space. Okay, I've heard about that, but how is that the case?
How does that work? Well, take big, elaborate kitchens, for example. Readily available prepared foods have made them somewhat obsolete, but what the experts didn't say is that pre-packaged food items can also be a money-waster. You know, another example, Rich, is the rarely used room, an extra bedroom that sits empty most of the time, or the workshop in the basement gathering dust, or perhaps even the space for bookshelves when we have e-books that take up no space at all.
The joy of curling up with a good Kindle. That's right. That's not really the same. Yeah.
Okay, what's next on yours? Well, for one expert, a big money waster is buying a new car, at least for many people, and especially if you're just trying to impress someone, you'll have to work two to three months just to make the payments and insurance a better option for many people as a dependable late model vehicle with low mileage. But we always point out that buying a new car is fine if you can afford it and plan to keep it for many years.
It's especially fine if you can buy it with cash. As we say, if no one bought new cars, well, we wouldn't have any cars at all eventually. That is true. We also would not have the famous new car smell that we so love. That is true. But did you know you can actually buy that scent in a bottle now and make a, I don't know, 94 Jeep Renegade smell just like new? I did not know that.
I should order some. Oh, that would be a money waster. The next money waster is a touchy one for many parents, though. It's spending money on adult children for things they should be paying for themselves, like keeping them on your car insurance or even a mobile phone plan. I also mentioned Rich was over scheduling younger children with too many expensive activities.
I've been caught up in this in the past myself. Better to have the kids focus on one or maybe two things they really enjoy because of the cost of extracurricular activities. It just continues to be on the rise. I can't tell you how many families we know that have kids with private coaches. In addition to all the travel leagues, it adds up fast. Yeah, and that is great advice, especially, again, for larger families. I've got five kids.
I think you've got four. So, okay, we've got just a little bit of time, maybe one or two more things the experts think are money wasters. Yeah, how about gym memberships? They're described as, quote, the failure to recognize future laziness. There's also unplanned trips to the grocery store. You go in to buy one item and end up spending one hundred dollars and then prepackaged sugary snacks should be on there as well.
Well, there you have it. Some expert things that they say we're wasting money on. We've got something free for you, and that's financial advice.
Give us a call next. Money and life run on the same track. But unfortunately, sometimes it seems like your money is heading in a different direction from your goals. In Never Enough, Three Keys to Financial Contentment, author Ron Blue helps you to break down all your financial options to a basic four and then shows you how to keep it all chugging along in the right direction on the same track. Never Enough, Three Keys to Financial Contentment, available when you click the Store button at MoneyWiseLive.org. For 30 years, SoundMind Investing has been helping Christians reach their financial goals with step-by-step guidance for investors at every stage, from those just getting started to those getting ready for retirement. Through scriptural principles and practical suggestions, SMI offers financial wisdom for living well. More information, including a short video webinar on profit and peace of mind, no matter what's happening in the market, is available at SoundMindInvesting.org. A new Gallup poll surveyed parents with children under the age of 12.
You know what they found? 95 percent believe in God. That sounds good at first, until you stop to think about it.
Why hasn't it had a bigger impact on our culture? I mean, just to believe something isn't the final step, it's the first step. I mean, if you believe a fire extinguisher can put out a fire, it doesn't do any good to stand there while the fire burns. You need to act on your belief and put out the fire. So, do you believe in the God of the Bible? Act on your belief. See, God has a plan, and it's written down in the Bible so you can read it. God's Son, Jesus Christ, is the plan. He came to earth and made a way for you to act on your belief.
Jesus is the way, the truth, and the life. If the heavy burden of debt is robbing you of freedom and peace of mind, Christian credit counselors can help. We're a nationwide nonprofit credit counseling organization that has helped over 300,000 individuals in the last 27 years get out of credit card debt 80 percent faster, while honoring that debt in full. To learn how Christian credit counselors can help you, visit christiancreditcounselors.org.
That's christiancreditcounselors.org, or call 800-557-1985. Proverbs 23, 4, and 5 tells us, Do not wear yourself out to get rich. Do not trust your own cleverness.
Cast but a glance at riches, and they are gone, for they will surely sprout wings and fly off to the sky like an eagle. And Rob, you and I were talking about some of the purchases that we make. I think quite often we are guilty of getting our priorities all out of order. And of course, our goal here on MoneyWise Live is to help you be a good steward of the resources that God so freely provides. And at the same time, follow Paul's advice to live in contentment, whether you have a lot or a little.
But anyway, that's what we're trying to do. And by the way, we were talking about, let's see, what was your word, compensatory purchases or keeping up with the Joneses. Our Facebook question of the day today asks, Has the temptation to keep up with the Joneses ever caused you to waste money on something you later regretted buying? And Lauren responded, she said, Not yet. And I don't think most of us can say that. Not yet. I'm a saver.
It's hard to tempt me into buying. I think we could all stand to have a little Lauren with us. Yeah, that's exactly right. Let me give the phone number and then I'd love to comment on what you just said a moment ago. We'd love to hear from you today.
Rich Roslin for Steve Moore. But we're here taking your questions. Eight hundred five two five seven thousand eight hundred five two five seven thousand. We do have some lines open and perhaps one just for you. And, Rich, you were talking about that tension between contentment and enjoying God's provision. And therein lies one of the opportunities we have to be really in conversation with the Lord to say, Lord, what lifestyle have you called me to? How much is enough? How do I enjoy what you've entrusted to me and yet live with contentment?
And I think it's all about a heart attitude. And when we recognize that money, the way we allocate God's resources is one of the clearest indicators into what we value and what's important to us. Perhaps it's a way to evaluate our spending in light of that and say, Lord, have I gotten this out of the way it should be?
And perhaps I need to rein in my spending or perhaps I need to loosen up. Maybe I can be more generous, whatever it might be. That's the question you need to answer between you and the Lord. We can't tell you how to answer that, but we do know that God has a lot to say in his word and that's what we have the privilege of exploring each day on this program. That's true.
Once again, 800-525-7000 is our number. Rob, I'm also reminded in that of our good friend Howard Dayton, the former host of this program. Howard always talks about how we pass on these ideas to our kids, too. And he talks about being an MVP parent. And part of that, the first part is modeling. So, you know, not only do we have to have these conversations between ourselves and God, but we also then in turn need to live out whatever that conversation reveals to us in front of our kids so that they can learn some good lessons, too. Well, that's exactly right, Rich. And as you well know, modeling is one of the most important ways we can pass on the practices of a faithful steward. You know, it's not about when your kids ask for something, say, no, we can't afford that, and moving on.
Take the time to say, you know what? Resources are limited. And so we live on a spending plan. We have a budget. Let me talk to you about what that is. And we have to take God's money and allocate it among food and our housing.
And by the way, we want to buy you new shoes every now and then. And, you know, we only have so much to go around, and that means that we have to be careful as to how we allocate God's money. Well, you're teaching this whole principle of limited resources, delayed gratification, and living according to a plan.
Well, it takes a little more time, but you're passing on an invaluable lesson. Oh, and that is great. That is great. By the way, we've got Nancy on the line calling from Westmont, Illinois, and she actually, I believe, has a response to our question for the day. Nancy, welcome to MoneyWise Live. What's on your mind today? Hi.
Yes, I'm calling about the regretting a purchase situation. I was at a women's—are you hearing me okay? Yes, ma'am. Go right ahead.
Okay. I was at a women's tea event where they gave some free kind of mini facials, and after the mini facial, they had you sign up for a more formal facial at a nearby department store. And I won't say the name of the department store, but—so I went for this appointment, and they spent a lot of time with me, and I don't even wear a lot of makeup, okay? So I was kind of just doing it to pamper myself a little bit. I wasn't trying to take advantage, but in the end, they handed me this list of all the products they put on my face, and here's your shopping list and blah, blah, blah, like this pressure to buy everything they just put on me. And it was $150. Wow.
I never—yeah. And I ended up buying it. And so then I left the store, and I was just beside myself, like, what in the world did I just do?
And what happened? And I called my mother, and God bless her, my mother's like, okay, Nancy, you get back in that car. She goes, you return it then if you're not going to wear it.
Go return it. And I just felt like such a fool because they spent all this time with me, but I did. In the end, I went back and returned it, and it felt great, but it was just surprising how quickly I could succumb to the pressure when I wasn't even a makeup user. It just kind of tells you the pressure that can sometimes be put on you. Well, I think we've all found ourselves in that position, Nancy, where you get caught up in the moment, whether that's in person or even online. You know, we see more and more often people just browsing the Internet, perhaps out of boredom. Maybe it's late at night, you can't sleep, and you end up buying things that the next day you're like, why did I do that? And we can all be victim to that.
So I think we just have to always be asking ourselves, is this the right thing for me? And perhaps exercising some delayed gratification to say, you know what, I'm going to wait a week or for a large purchase, even 30 days and see if I still want this or need it at the end of that period. It can go a long way. And by the way, Nancy, you're talking about the pressure. My guess is that, you know, in reality, the pressure was more self-imposed. It was the guilt you felt because of how much time the, you know, the sales consultant had spent with you. And that's something that we're often guilty of because we're nice. We don't want to, you know, abuse the fact that somebody has spent all this time with us, but, you know, that's their job. So I'm glad that you got out of it.
That's important. I believe we've got time to maybe squeeze in another call here before the break. David is calling from Akron, Ohio. David, hi, welcome to MoneyWise Live.
How can we help? Well, we're an institution and I'm paying about $70,000 a year. My tax preparer recommended to take that amount out of my deferred IRA every year and roll it into a Roth because it's all a write off.
And that way I would get, you know, I would, I'm in a low tax bracket, so I might as well, I'm never going to get any lower than I am now. So does that sound like Yeah. So I guess the only thing I'm confused about is perhaps the use using the Roth here. You are allowed a distribution from an IRA to pay for unreimbursed medical expenses that exceed 7.5% of your adjusted gross income.
And so that's probably what's perhaps what he's talking about there. It is going to be taxable, though. But as you said, with low income, you know, it's probably as long as you account for it, you're not surprised by the taxes that will be due. If you don't have means to take care of this out of other assets, I would make the IRA somewhat of a last resort. But that's why this money is there to be able to use in situations like this. I guess the question would just be, why go ahead and move that over to the Roth? Why not just pull that out as you need it and pay for those expenses?
Because putting it in the Roth is really just going to accelerate the payment of those taxes, as opposed to leaving it in the traditional IRA for as long as you can. But I would go back just try to understand a little bit more about what he is recommending there related to moving it to the Roth first as opposed to the straight withdrawal. But the bottom line is, obviously, these are necessary expenses. And let's just ask the Lord to provide in this situation. And we'll ask for him to intervene medically as well in your wife's life. If you have other questions, don't hesitate to reach out, David.
But I would just ask for a bit more information before you proceed. David, we appreciate your call and thank you so much for listening to the program and for trusting us with your question. That's always nice to hear. And if you'd like to be on the program, we're going to take a quick break here, but we'll be back in a moment. And we're open for your calls at 800-525-7000, 800-525-7000. A reminder, you can also email us, questions at moneywise.org, questions at moneywise.org. And we'll be back with more calls in just a moment.
Stay with us. I'm Rich Rozzle, and for Steve Moore. God cares a great deal more about our money than most of us imagine. In fact, Jesus says more about our use of money and possessions than about anything else, including both heaven and hell. In Managing God's Money, author Randy Alcorn breaks it all down in a simple, easy-to-follow format that makes it the perfect reference tool if you're interested in gaining a solid biblical understanding of money, possessions, and eternity.
Managing God's Money is available when you click the Store button at moneywiselive.org. Hebrews 4-12 says, For the word of God is quick and powerful and sharper than any two-edged sword. Here's Beth Moore with a quick word. You and I want the kind of zeal that comes from truth. And listen to that last sentence where he said, No matter how great the zeal produced by truth. I pray I have zeal, but I pray it's come from truth.
And the point that he's making is this. I pray that you have zeal, but that it's based on truth. If it is, it is the fact that it's based on truth. No matter how zealous it gets, if it came out of truth, it's always going to be held down by sanity and balance. So as long as we're in the Word, we can just get as zealous as we want.
You understand what I'm saying? Because it's going to be held down and well founded in the Word of God. Now I'm going to tell you something else that I think is a safeguard. Staying a student of the whole counsel of God's Word instead of one particular doctrine. I've seen people make an entire life calling out of studying warfare, and that will get you into trouble.
It will. But to continue to just make a pursuit of the whole counsel of God's Word, that will help us to be grounded down with sanity and balance. I love that. I don't know if you like that word, sanity, as much as I do. There's nothing that gives us the name that somebody doing something insane in the name of Christ gives us. And those of us who are trying to pursue God as we're going, that's not God. That is not God.
Dangerous, dangerous thinking. You've been listening to A Quick Word with Beth Moore. Join Beth for the online experience releasing September 15th at BethMoore.org. That's BethMoore.org.
See you next time for another Quick Word with Beth Moore. Do you know if you have enough, enough money, enough house? Do you know how much is enough? If not, Ron Blue can help with his book, Master Your Money, a step-by-step plan for experiencing financial contentment. Learn how to save, invest, and give wisely, how to create a long-term financial plan, and how to get out of debt.
You'll find it all in Master Your Money by Ron Blue, available when you click the Store button at MoneyWiseLive.org. You're listening to MoneyWise Live on Moody Radio. I'm Rich Roslin for Steve Moore today and, of course, joined by our own expert. We were talking about expert advice at the start of the program. Our own expert, Rob West, is here to pontificate, I guess is what you will do. That's what experts do, right? They pontificate. I guess, sure.
They wave their arms broadly as they speak. You know, my dad used to say about experts, whenever he heard that term, he would say, you know, Rob, an ex is a has-been and a spurt is a drip under pressure. And I'm not sure totally what he meant by that other than maybe take it with a grain of salt. You're a humble man. We appreciate that. And we'd appreciate hearing from you. Our phone lines are open at 800-525-7000. Or as I mentioned earlier, if you'd like to shoot us an email, the address is questions at MoneyWise.org. And back to our phones, we're going to head to Fort Lauderdale, Florida.
Doug, welcome to the program. I understand you have a question about secured credit cards. Yes, I was looking to rebuild my credit and I was told that the secured credit cards, there were ones that were available that over a period of time, once you'd proven your credit worthiness, that could be, I guess, morphed into an unsecured card.
That's right. But also, I called my bank to see about their secured credit card. And they told me that in order for it to build your credit, you had to carry a balance over from month to month and that doesn't seem right. Yeah, I wouldn't want to get into a card that required you to carry a balance. That's obviously in their best interest because then you're paying interest on it. That's not in your best interest.
There are plenty of them out there. Let me just define a couple of terms for the benefit of our audience, Doug. Basically, when we talk about a secured credit card, this just means that the amount you're charging is secured by an amount on deposit with that particular institution. So you, let's say, make a $300 deposit. They then, in turn, give you a credit card with a $300 limit.
As you charge up to the $300 limit, then you have the opportunity to pay that back at which point it becomes available to you again. But if at any point you don't pay it back, obviously, they have the collateral on deposit that they can recapture to pay the balance. These are often for folks that have a lack of credit. Maybe they're just getting started out or they're rebuilding their credit. Maybe they've had a bankruptcy or a poor payment history, something that's preventing them from getting an unsecured card, which basically means they're extending credit to you. There's no amount on deposit and they're going to just trust that you're going to pay it back.
If you don't, they'll hit you with late fees and potentially over limit fees and eventually it'll go to collections and it could result in a judgment if you didn't pay it back. Now, you asked about a secured card that becomes unsecured and that absolutely is the case. A secured card can graduate, if you will, to an unsecured card where your credit line no longer needs to be secured with collateral. You often would get to keep, Doug, the same physical credit card or you may be converted over to another one.
Either way, you can keep the good credit history you've earned with your secured card because that's been reported to your credit report along the way in the same way that an unsecured card would be as well. There's a number of them out there. I know Discover and Citi and Bank America and First National and many others offer these types of cards. You'd want to inquire about which ones can be migrated over. And I would be sure, as opposed to what you learn from your bank, it's one that does not require you to carry a balance month to month and I'd prefer it not have a monthly fee as well. Bankrate.com is a great place to go to explore credit card offers. Also, CreditCards.com or NerdWallet.com. All could work in your favor as you learn more about these.
But you're on the right track, sir. Just make sure, no matter what kind of card it is, you pay it off in full every month and if you don't or you don't use it for budgeted items, I'd cut it up and move on. And by the way, Doug and Rob, I've talked to some bank employees that say the same thing that Doug's banker was saying about how you have to carry a credit line. I don't know that that's necessarily the bank's official policy and everything that we've looked at from FICO and the other credit scoring agencies has indicated, no, you don't. You can use the card and pay it off, but you don't have to carry a bank balance. So that may have been some misinformation.
I hope not. Yeah, well, and in fact, with a secured card, typically the institution will not allow you to carry a balance. So I would definitely look further into that. Right. Anyway, Doug, thank you very much for your call. We certainly appreciate that.
Quick email for you, Rob, if we can. Mark writes and says, my wife and I have four children. We've been overly blessed financially and have a generous retirement account. We're considering opening a charitable foundation or trust.
What do you think? And is that overly complicated? Yeah, Mark, I love this question because obviously if you've been blessed with more than you need, I think a natural question is how can we get this into circulation into God's economy?
And that's perhaps the reason you've been overly blessed to use your term. I wouldn't start with a charitable foundation. They are expensive to set up and maintain.
They are fairly complicated. I would start with something called a donor advised fund. It can act in a very similar way where you would make contributions either in cash or assets. Think real estate, investment shares could even be a business or a portion of a business that goes into the donor advised fund.
You received the deduction at the time. Very simple to maintain. It's almost like a charitable checking account, if you will. And then you or your kids at your discretion can grant the funds out to nonprofits, charities, ministries, your church.
And and it's very simple to maintain. Our friends at the National Christian Foundation would be delighted to explain the differences between the two. Just contact them at ncfgiving.com and they've got 30 local offices in addition to their national office. And once again, that's ncfgiving.com. That's the National Christian Foundation. You're listening to MoneyWise Live with your host Rob West.
I'm rich Rosalind for Steve more back with more calls right after this. Investing is more than just returns. It's an expression of who you are and what you value. Does the way you invest your money reflect your identity as a Christian? At Eventide, we design investments for performance and a better world so you can invest with a confidence to reach your financial goals while remaining true to your Christian values and commitments. We call this investing that makes the world rejoice. More is available at invest eventide.com.
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I'm Drew Dick, host of Moody Publishers Reading for a Change podcast. In their new book, Scent, Heather Holliman and her husband share how you can live out your true identity, being sent to share Jesus with others. You'll learn practical strategies to engage those in your community into meaningful conversations that can lead to gospel transformation.
Grow in intimacy with Christ and with others by reading Scent, now available at moodypublishers.com. The financial wealth you leave behind could be the best thing that ever happened to your loved ones, or the worst. In Splitting Heirs, giving your money and things to your children without ruining their lives, Ron Blue explains why it's important to make these decisions now, instead of forcing your heirs to do it later. Splitting Heirs will foster a real appreciation for the precious resources that God has entrusted to you.
And it's available when you click the Store button at moneywiselive.org. With SRN News, I'm John Scott. Protesters in Portland and police have clashed near City Hall, the protesters blocking traffic early Wednesday morning after they started demonstrating Tuesday night. Police say they moved in to disperse the protesters after they refused to do so on their own.
There were 11 arrests. Marriott International plans to lay off 17 percent of its corporate workforce. The layoffs come next month as the coronavirus continues to take a heavy toll on the hotel industry.
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And the S&P ahead 67. This is SRN News. You're listening to MoneyWise Live. And as we often say, our purpose here is to help you be the best manager of all the many blessings God has given you.
In our particular case, we're focusing primarily on finances. But Rob, we've got a call today from Don in Muncie, Indiana. And I believe Don is talking about an even broader stewardship question having to do with his church. Don, welcome to the program.
What's on your mind? Thank you for taking my call. I have been going to a little country church for about 15 years now. And basically I am now the treasurer. I maintenance everything because everybody has died.
Quit coming. Except me and a lady that is about 95 years old. We lost one member last week. And so now we've got a nice little building. Our forefathers put back some money. So we're not strapped. But what should we do? We're a standalone church.
And what should I start getting in line for when we all go? Yeah. Well, Don, obviously, this is an interesting season we're in with the pandemic. And I suspect, well, let me ask, are you all streaming online? Do you have some online viewers or are you not able to do that? Yes, the minister is online. He has anywhere from 30, 40 up to 120 or so viewers. None of them come.
None of them send any money. So we're basically dipping into the till every week. Yeah. Yeah. OK. And, you know, are these folks that are watching online that previously had attended in person and perhaps for health reasons, they've just elected to remain online? Or do you think you're reaching an entirely different audience or do you know?
Well, I would say maybe one or two, but basically, no, we we don't know who they are. A couple of them maybe that moved out of the area, but still we're not getting any financial help or physical help, you know. OK. Yeah, sure. Talk to me about what the pastor is saying, obviously, as the under shepherd of the church. Where does he feel like you all need to go from here? Well, I said something to him Sunday about, well, I don't know what we're going to do. And he said, well, I've got a 501 C or whatever it is, and I got the inkling he wants everything turned over to him. I'm not sure exactly.
I think I know what he's 501 C covers, but I'm not really that sure. And I just need to get all legal down so that, you know, we do it right. Yeah. Well, I think that's the key. And obviously this church, I would imagine, is a 501 C 3 in and of itself. And so you have a responsibility to maintain the integrity of the organization. Even if you get to the place where you say we need to, for instance, sell the physical property, you would need to do it in a way that makes sure you receive the true market value of this particular piece of property, the parcel and the church itself. Even if there's somebody, an interested party, the pastor or somebody else that wants to buy it, you would not be able to be sold in good faith as a nonprofit at a discount, for instance.
So I think you're right in that you're wanting to get the affairs in order. I think, first of all, step one, in my view, is pray you as the remaining parishioners, church members to just ask the Lord to give you some wisdom here, make it really clear, assume the pastor is doing the same thing. I think number two, have him express the vision of the church where he believes the Lord is leading in the days ahead. And if you've got 50 to 120 people online watching, hopefully they're in the local area, perhaps just not visiting in person because of the pandemic, make sure they're aware of the needs of the church and where he feels like the church is going. And who knows how the Lord might lead them to respond with some financial gifts if they're aware of the true financial position of the church. But at the end of the day, if the Lord doesn't provide, then you as the treasurer and a responsible party here at the church need to do what's in the best interests, and that money is eventually going to run out. So I think at that point you would need to not only get the affairs in order, make sure that you understand the bylaws and have an attorney that can oversee this, but also understand by getting an objective valuation on the property so that you know from a professional who's a third party, arm's length in this transaction, what is this piece of property worth, including the building? And no matter who the buyer is, whether it's an interested party, the pastor or somebody that just comes, you know, another church down the street or some other party, that it's being sold for the right amount of money so that nobody is getting this at a discount.
So I think those are really the steps here. I'd love to hear more along the way how this turns out, and we'll certainly ask our community of MoneyWise listeners to be praying for you as you navigate this. Tom, thanks so much for that question and that call. And Rob, it's always nice when a building that belonged to a church has to be sold for it to be able to pass on to other ministries. So we will certainly pray that the church will continue on in its legacy of serving and honoring the Lord.
I think we've got time for one more call. Arlie in Spokane, Washington, you're next on MoneyWise Live. How can we help?
Hi. I've got a great-grandson who just started first grade, and I'm committed to paying for his private Christian education through the 12th grade. I'm wondering how I can accomplish that, setting aside maybe a trust or something that he and his mother can have access to for his Christian education. I have money in my retirement account that I could do that. I don't want to leave it up to chance that I'll be here for the next 12 years. What do you recommend?
Yeah, very good, Arlie. Well, I think there's a couple of considerations here. Number one is what's the right type of account to give him access to? Have you considered what the total amount is you would like to make available to your grandson for the purposes of education? Well, this year it was $6,000 tuition, and it goes up every year after, I think, the third grade. And so I just have no idea exactly how much I'll need. But is your intent to cover 100% of it between now and 12th grade? Yes.
Okay. Well, I think you could inquire from the school what the various or your son or daughter could what the various annual tuition prices are between now and 12th grade and then total that up. Obviously, there might be a little bit of inflation along the way where the prices increase, but you would get close.
And then you're going to determine based on that what the number is we're talking about here. You know, if we're talking about the next six years at an average of $7,500, well, you'd be talking about $45,000. Whatever it is, that's the amount that you want to be setting aside. One option is something called a Coverdell education savings account. Think of it like an IRA specifically for qualified educational expenses. Coverdell can be used for K to 12 expenses tax free, which means you could look at transferring whatever this sum is from your account to the Coverdell and make your grandson the beneficiary of that. And that way the money could be invested.
It could continue to grow. And then as it's needed, you could pull it out specifically for the benefit of his education, do that tax free. And then you could set up for the distribution of these assets at your death to go to him or your child, his mom or dad, to be able to use it for that purpose at that time. So I'd check with your financial advisor.
If you don't have one, you could connect with a certified kingdom advisor and ask about a Coverdell education savings account. Still time for your calls on MoneyWise Live 800-525-7000. Back after this. Would you like your life to be infused with joy? Would you like to interject an eternal dimension into even the most ordinary day? Author Randy Alcorn says you can when you discover the Treasure Principle. In a concise, power-packed style, this newly revised and updated book offers a six-step plan to finding the immediate pleasure and eternal rewards of the Treasure Principle. And once you discover it, life will never look the same. The Treasure Principle is available when you click the Store button at MoneyWiseLive.org.
Hi, I'm Barry McGuire. I'm here to help you understand how urgent and how fun it is to share your faith at every opportunity through the eyes of a layman. If you haven't followed by a prophecy, now's a good time to start because what's happening today, what the prophets saw coming thousands of years ago are like mere images. In times, it's supposed to happen in someone else's lifetime, but here we are experiencing exactly what the prophets told us would happen. Powerful people are calling for a global reset, a new world order which sounds like a one-world government to be led by the Antichrist, and the pending requirement of every person on the planet to move from our mask to the tattoo of a COVID vaccine before we can buy or sell sounds like a precursor to the Antichrist's mark of the beast. Comparing current-day events to Bible prophecy is guaranteed to put a bounce in your step and urgency in your desire to reach your unsafe friends before it's too late. There is nothing more exciting than knowing God is using you to move people closer to Him.
Join us at ignitedamerica.com. Let's be honest, the big question that we all have in this whole coronavirus thing is how will it impact me? Hi, I'm Bernie Dymett from christianityworks.com. Obviously, it is going to cause some serious suffering. Already, many have died.
Many have lost their jobs or their businesses. And let's be honest, there's more to come which can strike fear even in the hearts of those who believe in Jesus. Remember those 12 disciples in a small boat on the Sea of Galilee?
The storm hit in the middle of the night. They were in fear for their lives and then Jesus came walking out on the water scaring them even more. But Peter cried out, Lord, if it's you, command me to come out onto the water. Jesus answered, it is me.
Come. And right there in the middle of the storm, Peter stepped out of the boat while the other 11 stayed back cowering in fear. So in the middle of this storm, what's your plan?
Step out in faith or hang back in fear? God cares a great deal more about our money than most of us imagine. In fact, Jesus says more about our use of money and possessions than about anything else, including both heaven and hell. In managing God's money, author Randy Alcorn breaks it all down in a simple, easy to follow format that makes it the perfect reference tool if you're interested in gaining a solid biblical understanding of money, possessions, and eternity. Managing God's money is available when you click the store button at MoneyWiseLive.org.
This is MoneyWise Live. I'm Rich Rozzle, and for Steve Moore today, Steve probably out enjoying that coffee that Rob talked so harshly about earlier. Spending his money frivolously on that, what is it, designer coffee? I guess so. I'm a coffee guy myself, but I tend to brew it at home. Yeah, I do as well. But I'm sorry for saying mean things about Mr. Moore and his spending habits, but we do know that he likes a good cup of coffee, and frankly, he's just off today.
We don't know if he's spending his time in coffee shops or not. Let me give our phone number once again. We do have a couple of open lines, 1-800-525-7000. And time permitting, we've got some emails that we'll try to get to as well, but back to the phones.
Winston is calling us from Florida, and Winston, how can we be of help to you, sir? Yes, good afternoon. I enjoy your program, and I thought I would call in and just give you my little feedback, or if you may call it that, in regards to managing money. I think it has to be done in the process of training the children.
Children have to be taught very good work ethics, and also they have to be taught how to manage their money after they have gotten a salary. And I remember as a boy growing up, my dad, who was a builder, and we never got pocket money unless we went to the buildings on the weekends and pick up the loose nails, pick up the loose boards, put them in order, and then on Saturday evening, we would get what is called our pocket money. I remember my son came to me one morning and said, Dad, I need a new pair of sneakers. And I said, fine, no problem. We'll go down to the mall and get a pair of sneakers. So we got down to this side in the morning. He picked out a sneakers that was over $100.
It was well known that I don't pay more than $40 for a pair of sneakers. He was very disappointed. But as we made our journey back home, I drove by some homes that I knew that their lawn always grow a little bit over. So I said, Tim, look at those lawns over there.
Do you think if you ring the bell, you know, that maybe they would allow you to tell them, you know, that you're in high school and, you know, you're trying to make some extra money, you know, do you think you could do that? And he says, OK, you know, not very excitingly, of course. So we went home. I got a lawn mower. He pushed it down and went to, on that same evening, he earned enough money to buy, put on top of the $40 and buy that pair of sneakers. He always remind, he always remind me of that, you know, and now he's 52 years old and he always remind me of the work ethics that I've instilled in them.
I have three sons and the value. And when they used to get their money, you know, I told them, don't touch it. We're going to sit around the table and we are going to show you what to do with it. And I would say, OK, this is what I say, how much you want to give to the Lord? And they would say, OK. And I said, no, you're going to give a little bit more than that. And then I would say, is there anything that you need? And he would say, yes. I'd say, OK, what do you think that costs? And we would take that out.
Is there anything else that you need? No, I'd say, OK. Monday morning, we go down to the bank and you're going to open a savings account. And that has been the process until they left my home.
I love it. Winston, you have taught some valuable lessons here, sir. You taught the value of hard work. You taught the lesson of delayed gratification. You taught the lesson of giving generously, starting with your local church.
And you talked about having a plan in that one scenario. You taught some incredible lessons that I'm confident stayed with your son throughout the rest of his life. I appreciate you sharing that today. What a great story. That's awesome. Winston, thanks so much for calling and being a part of Money Wise.
That is the type of message we all need to be passing on to our kids. Let's see if we can get another call in. Linda is calling from Shallon, Washington. And Linda, we are glad to have you with us today. What's on your mind?
Well, thanks for taking my call. I am sixty-three years old and I am getting ready to retire. I have two homes and I have currently have one with a pending offer. In fact, I just had an inspection this morning. And when all is said and done, I should probably walk away with $150,000. I have a second property to duplex and it was purchased.
I kind of got caught up in that crazy 2008 scheme. So I have this house with a line of credit. And I'm wondering if I should take like $100,000, refinance the house into a traditional mortgage.
And I'd also like to be able to buy myself a little class C. I'm not a fan of winter and we have winter here where I live and I'd like to go somewhere warm. So what are your thoughts on these two things? Yeah, let me make sure I understand fully. So I understand the pending sale with the proceeds of about $150,000. Is that your primary residence that you'll be vacating?
Yes. Okay, so you don't have to worry about any capital gains there. Now this duplex, the second property, you have a line of credit on it. What do you think it's worth all in, both sides? I would guess that somewhere between maybe $400,000 and $450,000. Okay, and what do you owe on it? What's the outstanding balance on the line of credit?
Probably $220,000 right now. Okay. All right.
And then how much are you looking to spend when you relocate to some warmer weather? Well, that's what I'm trying to figure out. Okay. All right. Are you generating investment or rental income on the duplex? Yes. Okay, enough to service the mortgage and cover maintenance and upkeep? Correct.
Okay, great. Well, I like the idea, Linda, of you being completely debt-free in your primary residence and really treating the duplex as an investment or a rental property, which of course it is, and looking at that as a business. And so I think as long as you are servicing the debt, you've got enough coming in that you're able to build up some reserves to take care of the maintenance and upkeep of the property, renovations over time, of course, pay the taxes and insurance, keep it marketed and rented. I would let that be, yeah, refinancing that to a new first mortgage where you've got good equity, you've got probably 50% loan to value, and converting that to a low fixed rate mortgage I think makes a lot of sense in this very low interest rate environment.
And then taking that $150,000 and putting that into this next property to make sure that your primary residence is always owned free and clear to the best of your ability makes a lot of sense to me. So that'd be the direction I would head as you make these changes. Does that make sense? Yes, thank you. Okay, absolutely. Well, all the best to you. Very exciting times.
And as you head into winter, I suspect you'll be excited to get to some warmer weather because we know the cold is right around the corner. Yes, it is. Thank you. Sure.
Okay. Linda, thanks for calling. Appreciate having you on the program today.
Hope you have a good rest of your day. And we'll jump in here and move on. Sorry, 800-525-7000 is the number. If you'd like to write that down, we're about out of time on this program, but we do have time for one more call. Terry is in Chicago. Terry, welcome to MoneyWise Live. How can we be of help?
Hi, I'm actually in Cheney, Washington. Okay. Okay. Sorry about that. My mistake.
That's okay. My question is I'm just newly retired and I owe $83,000 on my home. And the going value in the neighborhood that I'm living is anywhere from $183,000 to $210,000 is what the property has been, the surrounding houses have been so far. I have $134,000 approximately in my core retirement and I have about $40,000 in my 401 and 403 combined. And so I'm kind of drawn off of my 401 and 403 supplementing my Social Security money that's coming in. So I don't know if I should pay off my home and pay off my credit cards and just go from there or if I should just do like I'm doing, just continue to pay my mortgage and stuff and then after I get it all refurbished inside, remodeled inside, then sell it and then live off the proceeds.
I don't know which bet to go. I hear you and I like the direction you're headed, Terry. So you are looking to sell eventually, but you do feel like you need to do some renovations first. Is that right? Yes.
Okay. Have you talked to a realtor about the renovations you're doing? Because anytime we know that we're going to sell, it changes the way we will improve or renovate a property. You know, if it's something that's our primary residence, we plan to stay in it for a while. We wouldn't always necessarily do the improvements that are going to receive the most value in return because it's where we live and we might want to enjoy certain things.
And so we'd make decisions to spend money that we have budgeted and allocated for those purposes. But to the extent you're planning to sell in the near future, you would only want to do those things that would allow you to maximize the value of the property. So that's number one is I would get with a real estate professional who specializes in your area of town.
And if you don't know who that is, just drive around when you can and look to see who has the most signs in the front yard. Perhaps interview that individual and ask their opinion, perhaps interview a couple of people on what you should actually do in the way of renovations before you do it. I wouldn't pull money out of your IRA for paying down the mortgage right now. I would just continue on the track that you're on. But I would try to move towards selling this just as quick as you can since you were doing that anyway.
And then if you decide to rent or move in with family, obviously you would have the proceeds after the mortgage is paid, plus your retirement assets, plus your Social Security to help you put a budget together moving forward that's going to allow you to maximize what God has given you and make it last as long as you can. Let me just throw one other idea out, Terry. Be sure to connect with our MoneyWise coaches. They'd be happy to help you navigate this. And by the way, our new MoneyWise app is out and that would help you to manage God's money well by putting in your spending plan and using our envelope system.
Just go to your app store if you use a smartphone and download the new MoneyWise app. But hopefully that's helpful to you. Terry, thanks so much for your call today. And Rob, thank you, sir. It's been a joy to be with you. And I learn far more than I ever think I will every time we do this. So thanks for letting me be a part of the program. You're very kind, Rich. Always great to be with you as well. Appreciate you sitting in today. And the good news is Steve Moore will be back tomorrow as far as we know. Our goal here on MoneyWise Live to equip you to manage whatever God entrusts you in a way that's going to honor Him knowing that He will and does provide for your needs. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. See you next time.
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