Lessons Learned from COVID

They say every dark cloud has a silver lining and the coronavirus pandemic has been a very dark cloud indeed. But experts see at least one upside, the way people are managing their money. The SRE, the COVID crisis and resulting economic turmoil are changing the way many people manage their finances for the better.

But will it last? First up today, Kingdom Advisors President Rob West explains the changes and then it's your calls on anything at 800-525-7000. 800-525-7000. I'm Steve Moore. Lessons learned from COVID. Take off your mask.

Next on Money Wise Live. And we just mean for callers, right Rob? Everyone else keep your mask on. But if you're a caller today, it would help us understand you better if you remove the mask.

As long as you're socially distanced, yes, you may take off your mask during the phone call. There you go. Okay. Hey, Rob, looking at the big economic picture so far, and who knows where this is going to go. What's the one thing about the pandemic that stands out to you?

Well, Steve, the word chaos comes to mind. Never before have we seen such a strong economy plunge so dramatically into recession and then only to climb back out of recession, at least technically just about as fast. Now, that's not to say that parts of the economy and specifically areas of the country aren't still hurting.

They are. And we have a long way to go before the economy is back to where it was at the beginning of the year. Millions of people, of course, are still out of work. And that is no small thing. It may not be you, but everybody knows somebody who's taken a financial hit from the pandemic. And when that happens, Steve, when our financial security is threatened, it can certainly make people take a second look at how they're managing money. Yeah. All right. So what do we know about those changes? Well, we don't have a lot of hard data yet. But it's safe to say that three areas of our financial life have been deeply affected by the ongoing economic turmoil.

The first is something we talk about all the time. It's the inescapable need for money in the bank to cover financial setbacks. In other words, your emergency fund. Financial advisors often have a hard time convincing clients who haven't experienced a real financial emergency that they need to keep cash readily available. But now, as they see family, friends and neighbors, perhaps even in their own situation, losing jobs or having their hours cut, well, it's easier to make the case.

We saw this right from the start of the economic shutdowns, according to the Bureau of Economic Analysis, the personal savings rate hit a historic 33% in April. Obviously, it's difficult to save if you've lost your job. But for those who could, the lesson was clear, stop spending and get some cash in the bank. It also didn't hurt that people weren't going anywhere. So that probably curbed their spending as well. And of course, we always recommend that you have three to six months living expenses in your emergency fund.

And now you know why it's no longer academic. There's always a real possibility out of left field, you may need it. Yeah. And I think we can probably expect that a lot of folks who lost jobs and hadn't saved won't make that mistake again. Let's hope anyway. All right, what's our next lesson learned so far from the pandemic? Yeah, well, just as we learned that it's wise to put money into savings, Steve, it's also a good idea to put something in your pantry. The pandemic has caused major disruptions in the supply chain of basic commodities. The images of empty store shelves are still fresh in our minds.

Perhaps it's even still a reality where you live. And that's caused a lot of panic. I think we can expect that many of us will start keeping a reserve of storable items, especially disinfectant products. We may be through the worst of COVID-19, Lord willing, but that doesn't mean COVID-20 isn't right around the corner. A case in point, the sale of bleach products has soared throughout the pandemic. Clorox sales, as you might imagine, we're up 32% in the first quarter of the year. Wow. Okay, so we're building our emergency savings, learning to keep a reserve of necessities.

What else? Well, you know, as we continue to look at this, not surprisingly, Steve, financial advisors are reporting a renewed interest in budgeting. What that means is we're taking a much closer look at spending than we did before the pandemic hit. We all know that it's difficult to change spending habits that have become ingrained over the years.

But the Coronavirus caused many lifestyle changes stuck at home for months, millions of Americans have had to curtail or eliminate vacations, eating out all sorts of entertainment activities. So this is a time to go back and look at your budget. And it's a great time for me to let you know that we have a brand new tool out. It's the MoneyWise app, and it's the best digital envelope system I've ever seen.

And that's why our team created it. Go check it out today at your app store, whether it's Google Play or Apple, just search for MoneyWise biblical finance. That's good. Thanks, Rob.

Your call is next 800-525-7000. He's Rob West. I'm Steve Moore, and you're listening to MoneyWise Live.

Masks, Becca. Many people are experiencing financial challenges such as credit card debt, downsizing, debt in jobs and depleted savings. In fact, more than half of all divorces are the result of financial pressures at home. But there's hope in your money counts biblical financial expert Howard Dayton shows that the Bible is a veritable blueprint for managing your finances.

And you'll discover the profound impact it has on your relationship with God. Your money counts is available when you click the store button at MoneyWiseLive.org. If you're investing for retirement or any other goal, you may be wondering if it's possible to enjoy both profit and peace of mind, no matter what's happening in the market. Sound Mind Investing has a short video webinar on that topic at SoundMindInvesting.org. SMI has helped tens of thousands of Christians learn to be wise and faithful stewards in the area of investing.

Profit and peace of mind, no matter what's happening in the market at SoundMindInvesting.org. This is it. The hole I've dreamed of playing hole 17 at the TPC at Sawgrass. No big deal, right? It's only 121 yards, par 3, no problem. But then again, this is a golf green that is entirely surrounded by a body of water.

No fairway, just a golf green on an island. Now there's a problem. Good luck pal. Yeah, thanks buddy. Are there hazards to endure in your life today? Dear God, is it unethical for me just to, you know, throw the ball up on the green? Yes?

Yeah, I thought so. See your hazards as opportunities to improve and become better prepared for future obstacles that will come your way. If they are from God, remember that he has put them there out of love for you as his child. Okay, I'm taking what I've learned and going for it. Okay, all right.

I did it. Joshua 1 9 says, do not be afraid nor be dismayed for the Lord your God is with you wherever you go. Something to think about from your friends at Moody Radio. 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% 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. Hey, if you have questions about, oh, I don't know, uh, maybe insurance, giving, housing, credit, saving, debt, uh, fixing your air conditioning, uh, give us a call today. Our lines are open and available and we'd love to chat about anything, anything financial that's of concern to you. Uh, here's the number 800-525-7000. Now we have lots of open lines today. They remain open.

Not sure why. I know we've paid the phone bill, so, uh, let's put those lines to use. Give us a call if we can help you.

800-525-7000. Rob, you want to begin? Let's do it, Steve. All right, let's go to, uh, how about North Branch, Minnesota? Alan, thanks for your call today, sir. What's on your mind?

Oh, yes, indeed. And thank you for having a little bit of an open forum, always getting some financial questions. My wife and I are fortunate to be debt-free, have been for some time. Uh, we own a home of the country as well as a rental home that has a little bit of income for us.

I've chosen on our home not to have homeowners insurance because I've just weighed out the value of it in contrast to the likelihood of claims. But yet at times, I just wonder if this is the wisest thing to do. So I guess I'm not completely settled about it.

So then I bounce it off you guys. It's about a $425,000 property. The home could be replaced for probably about 300. But, um, the likelihood of a claim, you know, you throw that in the equation and contrast that with a $1200 a year premium with a high deductible. And I'm just not sure it's a good use of funds. So I'm going to leave it in your court. All right, Alan.

I'm going to take the counterpoint here and say that there is still an enormous risk. Now, let me back up first and just say kudos to you on managing God's money well. It sounds like you've really kept your lifestyle lean and mean. You've been diligent as a saver.

You've paid off all of your debt, including your rental home. And it sounds like you're in a pretty strong financial position with God's money. That's great. That gives you flexibility and peace of mind, allows you to be generous as the Lord leads.

And that's all really good. But I think part of our role as steward is to also recognize where we have the potential for a risk and a significant one. And I would certainly place your home being your, perhaps your largest asset or close to it right there in terms of where you need to be looking for offsetting that risk. You know, what would you how would you repair or more importantly, replace your home if you suffered damage due to a storm or had a complete loss due to a fire? What if somebody was injured on your property and takes you to court? How would you pay for that judgment?

I think you see where I'm going with this. You know, nearly all retirement plans, including pensions, and Social Security are protected from creditors in the form of judgments. Your home is protected if you own it jointly with your wife, however, your personal property and automobiles have no protection. And so you've, you've got to consider the cost of replacing those, you've also got to consider the the cost of a major loss. And so, you know, if your goal is to become self insured, you can do that to a point. But I don't think homeowners insurance is one of those when you compare the cost against a catastrophic loss. You'd see very quickly in my view, at least that homeowners insurance is actually a very wise decision.

But push back on that, Alan, what are your thoughts? Well, I just my line of thinking is, okay, look at the likelihood of a claim and there are options where you can go into traffic areas and get basically a rundown of what type of claims have been common in the area. And when we live here in Minnesota, about the only thing that I would say is more common would be hail damage. So you're looking at a rough some siding or windows whatever out of pocket, that's not that much the likelihood of a fire or something more catastrophic is so remote that to me, it doesn't seem like a wise use of money where I'm betting the 12 to $1,500 a year that I would have a claim where the insurance company of course is betting the opposite. Yeah.

Yeah. Well, I guess you just you live long enough and you see some of these you go through it. You know, I've lived just a few houses down from a home that was completely consumed by fire because of a lightning strike.

One of my co workers here at MoneyWise had a detached garage and almost the rest of the house go up in flames because some rags with oil stain were left out, unvented overnight and they combust it. I mean, so just any number of things can happen, albeit remote, I'll give you that I just think part of our stewardship responsibility is to say when we're caring for an asset like this, having insurance on it gives us that peace of mind, which in my view is worth that 12 to $1,500 a year just knowing that in the event something yes, unforeseen and yet possible happens, you don't have a total loss. And now you're wondering how do I kind of rebuild, reconstruct all of this. So I would say ultimately, you're the steward Allen, you've got to pray through it. And I don't say that tongue in cheek, I mean that I'd pray through it and let the Lord lead you as to what your conviction is in terms of how you best remain faithful as a steward of God's money.

It's just in my view, if you have the ability to have it insured, even though it's remote, I would feel better you going that direction just given what I know is possible, even though it's not likely, but I certainly appreciate your perspective. We're grateful for your call today and hopefully giving you some things to think about no matter where you come down on it. Yeah, Alan, we're glad you called today. Thank you. It's always fun when people come up with an alternative or a little bit of a pushback as long as everyone remains polite, but if you feel that you can put Rob on the hot seat, if you can force him to rethink his position and admit that he's been wrong all along about, I don't know, have you been wrong about much of anything? I'm sure I've been wrong about plenty of things.

Let me check with your wife and see what she has to say. I appreciate you asking people to find more of them. Well, it's just to help you grow, sir. Right. Well, thank you. I can always accept the humility. You know, what makes a diamond, Rob? It's pressure, buddy.

It's pressure. Got it. Okay. Yeah.

Live radio is not enough. Let's, let's throw a little bit more in the mix. This is my last day, isn't it? I'm sensing this may be my last day. We'll talk after the show. I was afraid of that. Grayslake, Illinois. Hey, Ken, what's on your mind, sir?

Yes, sir. I just inherited some more money and I also, I'm inheriting some more money because I had an accident and I'm just wondering, I have a $50,000 loan in my house and this money will be about 180 to $200,000. And I also have a 401k, but the loan is only a 3.12 to $50,000 left. And I'm, I'm at 60 years old and I'm going to be, I want to retire at 62. Well, kind of, I'm going to, I want to work just to keep insurance, but the 401k has like almost 500,000 in it. I'm just wondering if I should not pay my loan off because it's a 3.12 or if I should pay it off or what I should do with that.

Yeah. Well, Ken, in my mind, this is somewhat of a no brainer, although maybe I shouldn't say that because I think you could come down on either side of this and I wouldn't argue that you're wrong one way or the other. You know, given that you're so close to retirement, given that you're on track, as what I'm hearing with your retirement savings, and now you've come into this inheritance of somewhere nearly $200,000. So you could pay off this loan in full and still have, you know, roughly 130 to 150,000 remaining. That's the part I think that just makes so much sense because I'd want you to be debt free, including your home, if possible, by the time you retire. Anyway, that's going to keep your lifestyle as low as possible and just reduce the burden of what you need to fund your lifestyle. Not to mention the peace of mind that comes from knowing that you have no encumbrances, that you own your home free and clear.

The flexibility that comes with that, not to mention you get a lot better sleep, I just find. So here's what I would do is just pray through it and ask the Lord what he would have you to do. Certainly, if you look at it on paper, you could make the case that, yeah, with a 3% interest rate, very low rate, you have potentially the ability to deduct even a portion of that if you itemize versus what you could make, let's say, in a diversified portfolio. You know, you could make the case that it's wise to continue. I just wouldn't come down on that side, given how conservative your portfolio is probably going to be as you near and enter retirement, given, you know, some of the challenges we've had and the incredible run up in the stock market, not only the last 10 or 11 years, but what we've seen this year on the rebound from the pandemic. I just think you're never going to regret paying off your home and being free and clear.

I'd do it and not look back. But at the end of the day, if you and your wife are on the same page, I think you could go either direction and certainly make a case for it. Ken, does that does that work for you? Does that make sense?

Yeah, that makes real good sense. One more question is, also, I was hearing, I mean, I'm not thinking about after I do retire is to get out of Illinois and keep my house as an income property. And I'm really thinking about it.

My son lives right across the street from that, so you can take care of it. But it's going to be another like $2,400 a month, which I'll only owe taxes on it then. Is that a wise idea, you think, too, also?

Well, let me make sure I understand what you're talking about here. So you're saying you'd keep your primary residence, which let's say it's paid off at that point. You'd turn that into an income generating investment property. And then where would you live?

What would you do? I was thinking about that. There's a thing about getting it. I was thinking about getting two trailers, one in North and Wisconsin. I love the fish and one in Phoenix. They're going to be double wise. The property is going to be managed by them, by the people that own it. And it's only going to be like 270 on one, 370 on the other one. And I'll own the trailers outright. And that's what I'm thinking about doing. And that would be income so we can have all the time, too, you know? Yeah, yeah. Well, I think that one comes down to a budgeting decision.

How does that fit into your spending plan given the income sources you'll have, retirement income, social security, and just factor in if you've never been a landlord before, what you're getting into there in terms of the time commitment, the financial reserves you need to have to maintain it, the upkeep, and what if you go without a renter for a period of time? Just think and pray through all that and then go back to the budget, make sure the numbers work. Ken, God bless you, brother.

Thank you very much for your call today. This is MoneyWise Live. Many people adopt an attitude toward marriage and finances that it'll all work out somehow.

But sadly, it often doesn't. Financial woes can devastate a marriage, but there is a better way. God's Way. Money and Marriage God's Way by Howard Dayton will help you discover God's approach to growing your finances, strengthening your relationship with your mate, and cultivating Godly joy.

Money and Marriage God's Way 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. If we could boil Paul's entire theology down into one sentence in Romans, perhaps this would be it. Christ is the end of the law, so that there may be righteousness for everyone who believes. Christ is the end of the word.

T-E-L-O-S is the Greek transliteration, and it's a word that means, according to Douglas Moo, culmination. Christ is the culmination of the law. It's a word that also infers that in Christ, the law has reached its goal. Okay, let me give you an example, because these kind of words, when we see perfect in the word of God, if you're like me, that troubles me.

When it's in the context that it has to do with man, it tends to want to freak me out. I don't know if it does that to you, but I just think, you know, we're in pursuit, but we will not attain. But in verses like Philippians 1-6, he who has began a good work in us will be faithful to complete it. He will perfect the work which he began in us, is what some of our translations say. That word in the Greek means to bring it to reach its goal. I love knowing that every single one of us, we have a general goal as believers in Christ that God is after fulfilling, but that you have a specific one, and I have a specific one, that he's after something, that nothing we're going through is haphazard.

It's all toward a particular goal. You've been listening to Beth Moore with a Quick Word. Join Beth for the online teaching experience, releasing September 15th at BethMoore.org. That's BethMoore.org.

Or download the Living Proof app. Search for Beth Moore in your app store. See you next time for another Quick Word with Beth Moore. Hey, great to have you with us today.

We're so thankful that you've chosen to include us during a part of your day anyway. And again, here's our phone number if you'd like to speak with Rob West, 800-525-7000. Or you could always visit us online. Here's our website. It's MoneyWiseLive.org. You'll find a lot of great information there, some helpful things like budget templates and some biblical principles that you can print out and put up there in the fridge and a lot of other great information. It's also an easy way if you'd like to make a donation. Right, Rob?

Well, that's exactly right. You know, what we do each day here on the air, but also off the air through our brand new MoneyWise app, through our website, the resources, the e-magazine, the coaching services. All that we do is brought to you only because of the faithful donations of our partners.

And we rely on that in order to do the ministry that God has for us. So if you might consider prayerfully being a part of that, we would certainly be grateful. Whatever you can do, whether it's ten dollars or a thousand dollars or anything in between, we'd be grateful for any consideration you'd give in supporting the work of MoneyWise.

As Steve said, just go to MoneyWiseLive.org in the upper right hand corner. Just click the donate button. It's quick, easy, and secure, and we'd be grateful.

And remember, when you give, it helps us work in other people's lives so that they too can experience true biblical financial freedom. Let's go back to our lines. Munster, Indiana. Lawrence, you're 25, my notes say, and you're getting engaged next week. Is that the deal? Yes, that's the deal. Can you hear me on the right?

We can hear you. Now, does she know that she's getting engaged next week? Yes, she does. You know, I proposed about a week ago, and in our culture, we do an official engagement because we're Middle Eastern for the families to come and do it. Oh, great. Yeah. Well, that's super.

How can we help you? Yeah, awesome. I listen to you guys all the time on MoneyWise, and I love the guidance.

So, you know, I'm looking for some myself. So I have about 25, 30 grand saved up, and we're planning on getting married in April, and I'm starting, I'm going to be an insurance agent making about five grand a month. So I'm wondering, should I make a commitment in buying a condo right away and should I use the money that I have from my assets if it's treating me well, or should I try to use the money that I'm making from my job and kind of let my assets keep building and wouldn't hurt me to rent for a little bit, and then when I'm fully ready to make that full commitment to pay 20% down payment?

Yeah, yeah. I like the idea of delaying that, Lawrence, for a couple of reasons. Number one, you guys are just getting started.

What an incredible exciting time in your life as you're joining together as husband and wife under the leadership of the Lord, you know, just to think about what God has for you moving forward. And I think, you know, given some of the newness of this, I think starting out keeping without having that added pressure of a major debt commitment, especially if you're not quite ready financially, even though I know it's hard, especially for some people to say, man, we just don't want to rent. We feel like we're throwing money away and yet not getting ahead of yourself is something I think you'll really come to value. So I would go ahead and begin renting, figure out where you all want to live, you know, get through some of these first months and even a couple of years of marriage while you get your financial house in order, get used to living on a spending plan together as husband and wife, begin to give and to save together and funding, you know, your retirement, at least up to the matching portion, ultimately with a goal of 10 to 15% of your income, building that emergency fund of three to six months expenses, and then saving that full 20% for a down payment.

I don't think you'll ever regret that decision, especially if we were to see a dip in the housing market. So that's going to be my best advice. Hey, stay on the line. I want to send you a book called Money and Marriage God's Way as our gift to you.

A great idea, Rob. Thanks very much. And Lawrence, again, God bless you and your intended. We hope you have a wonderful life together with God right there at the center. Thanks so much. You're listening to Money Wise Live.

We'll be right back. 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 the 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 investeventide.com.

That's investeventide.com. Thank you from the bottom of my heart. I couldn't have had the procedure I needed without CHM's help sharing the bills. That letter from a member displays Christian Healthcare Ministries' purpose to glorify God and serve His people.

CHM is the original non-insurance voluntary health cost sharing ministry, enabling its members to share the cost of each other's medical bills. Call 800-791-6225 or visit chministries.org. Hi, my name is Ryan, a communications major at the Moody Bible Institute. The Moody Radio Verse of the Week is found in 2 Chronicles 7-14. If my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then I will hear from heaven, and I will forgive their sin and heal their land. That is 2 Chronicles 7-14. The Moody Radio Verse of the Week. Learn how God is intimately involved in your life in beautiful and unexpected ways.

Purchase your copy of Seen, Known, Loved at moodypublishers.com. 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. With SRN News, I'm John Scott. On this 19th anniversary of the 9-11 attacks on America, President Trump vowed in a speech at the Shanksville, Pennsylvania, site where Hijack 93 crashed in a field that America will always fight back. In New York, both Vice President Pence and former Vice President Joe Biden attending a commemoration at Ground Zero. Later, Mr. Pence read Bible passages at another ceremony before stopping by a fire station to thank first responders there. Firefighters aided by helicopters dropping a fire retardant and water, they're battling two large wildfires that threatened to merge near the most populated part of Oregon, including the suburbs of Portland. At this point, more than 10% of the state's population has had to flee the area.

On Wall Street, the Dow gained 131 points today. This is SRN News. It's MoneyWise Live where James 4 reminds us, James 4-3, you ask and do not receive because you ask with wrong motives so that you may spend it on your pleasures. Let's go to Chattanooga, Tennessee. Arthur, is there a choo-choo, really, a choo-choo in Chattanooga, sir? Yes, sir. That choo-choo been here a while. I know for a fact.

I've been here 71 years and it's been there all the time on Market Street. All right. All right. Well, if I make my way up, can you and I have a cup of coffee on the choo-choo or something?

Yes, sir. We can do that because I'm definitely free. I wonder how many people there are around the country that have promised you a cup of coffee over the years. There's probably not many cities you could visit where somebody wouldn't be waiting to buy you a cup of coffee. Sure. I'd definitely buy a brother a cup of coffee. I got a question for you guys. Let's do it.

I've heard a lot of great, you've already given some great counsel on the one that I'm going to ask you and I'm going to make it quick. I know I'm a 71-year-old retiree. And believe it or not, my wife, she'll be 65 this year. And a year ago this month, we owned the property out there. We own property. And so it was a big two-story job. And so we decided, I just decided when it's first part of the month, I'm just going to go ahead and put it on the market.

Okay. So the house sold, look at the split. It went so fast.

I didn't have time enough to hardly do anything. The person wanted it that bad. So I sold the property. And so what it is now, we're living in an apartment, really a lease, we're living in a lease property. It's just got two bedroom, two bathroom.

The house had eight rooms in it. So I got half, I got quite a bit of my stuff in storage over there now. So my question is, to make it short, you know, I don't mind not cutting grass and all this kind of stuff, you know, things like that.

But I'll just say, what do you think? I would love to have another property. I've been looking at some properties and I'm out of debt. It's not the debt situation at all because I'm out of debt. All that's history without having a debt.

But what do you think at 71 buying or getting back in debt for a home? What do you think about that? Well, a couple of questions for you.

And then I'd love to weigh in, Arthur, and I appreciate the background. What were your proceeds coming out of that other property? What were you able to put in the bank? Well, basically, right now, financially, I'm in good shape. Let me put it like that. All right. So you would have to take out a mortgage, though, for whatever you're thinking about.

Is that right? That's what I'm saying. I would have to take out a mortgage.

It would be great if I could just pay the one I'm looking at straight out. But that would kind of like put me in a different situation. Okay. And how do you feel about that? And as important, how did your wife feel about that? My wife, most of her stuff, I mean, her property that she really tragic is in that storage bin. And she would love to put it inside a space. But me, at my age, I don't mind a property. This is whether I could pay, you know, the lease on this property we're living in, I'd rather be putting it into something that, you know, that even if, just to be honest with you, if I was to go first, you can always sell it or whatever. So it wouldn't be like we, you know, it just be wasting money. I would love to live as comfortably as I possibly can until Jesus give me a call.

Yes, sir. Well, listen, I don't have a problem with you taking out a small mortgage here. I'd prefer you to keep it on the low end of the repayment term. So I'd love to see you get a 10 year mortgage or a 15 year 20 at the most, I'd rather you not go out 30 years. Hopefully, it's a small enough mortgage. But the key is got to fit well within the budget. So you've got to spend some time looking at your budget, what income sources do you have that you can count on and hopefully, social security plus whatever retirement pension or income off of retirement investments would be such that you would be able to maintain those accounts without depleting them over time. And that that new small mortgage would fit into that equation. And if it does, then I think that's great. I assume go in with plenty of equity.

As you said, the Lord calls you home first, which for most of us men, that just is the case. Statistically speaking, she has the ability either to continue on there, or perhaps to downsize, maybe something with a little less upkeep. And she should be able to sell that given that you all go in with quite a bit of equity. So I don't have any problem with that. I think you all would be delighted to have something else to put your stuff in and call home. I think you really just need to pray through where and how big and what lifestyle do you want in this season in terms of upkeep and maintenance and make sure you pick something that fits with that. But in terms of taking on a small mortgage, I don't have any issue with that as long as it fits in the spending plan. Arthur, we're glad that you called, my friend, and we trust Jesus won't give you a call anytime soon and that you and your wife will come to an agreement. And that's critical that you and your wife both agree before you decide to do anything like this. And we'll pray that that's a blessing for you both.

Thanks so much. 800-525-7000. Let's sneak in Willie in Tampa, Florida.

Willie, what's on your mind? Yes, it's kind of interesting that this is talking about a home and the age factor. I'm a 63-year-old widow for about seven years.

That is with background, family background of dementia and neurological degeneration. And I'm trying to figure out if it is better for me to self-insure long-term health or to buy a product that is under a universal, I think it is. You pay $42,000, put it in an account, and they guarantee $100,000 for services or death benefits for my children.

Yes. Well, I'm a fan of long-term care insurance, Willie. I think it's something just given the statistics about the number of Americans, the high percentage of Americans that will need some form of long-term care on average between 18 months and three years, either in-home care, assisted living, or full nursing care, especially with what you're talking about in the health history that you have in your family, which by the way, you're going to want to shop this around because certain companies will treat that more adversely than others.

And so you'll want to give one that gives you the most favorable pricing. I like that because if something's going to erode your assets in this season of life, it's probably going to be long-term care in terms of the quickest. And you can absolutely combine it with another insurance product that has a death benefit. You mentioned Universal Life, and you could do it with whole life insurance. There's even, I think, one carrier that'll allow you to do it on a term policy. I think the key for you, though, Willie, is to make sure, first of all, that you get a reputable, knowledgeable insurance agent who specializes in long-term care to talk you through all the options, talk you through which companies are committed to this space and have a really strong presence in the long-term care insurance space. And with the most competitive pricing, you're also going to want to make sure that it fits well within the budget because it's not going to do you any good if you can pay for it for the next couple of years and then you end up dropping it because you can't afford it. So as long as you work through all of that with a knowledgeable agent, I'm a big fan. And I think it's something that if you can afford, it makes a lot of sense, especially for those with net worth assets, if you will, between $300,000 and about $3 million. That's really kind of the sweet spot in terms of those who are looking for it. Last thing I'll say is your age at 63 is actually a great time to be looking at long-term care insurance.

So go to MoneyWiseLive.org, click on Find a CKA and look for an insurance agent or a financial planner who can refer you to an insurance agent who specializes in long-term care. Willie, God bless you. Thank you so much for calling in today.

When we come back, Monica wants to know about giving a house to her son. Greg's on hold as well. We'll get to him as well. Stick around. We'll be right back.

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Never Enough, Three Keys to Financial Contentment, available when you click the store button at MoneyWiseLive.org. And we're back with you on MoneyWise Live. Greg in Lakeland, we're coming your way. Also Mandy in Missouri, please stay with us. But now it's Monica in Arcadia, Indiana.

And what's your situation, Monica? Yes, first, thank you for the service and the Lord for both of you. And my question is, how do I pass my home, my second home to my son without paying a capital gain in down the road that he wants to sell it? Because the homeowners association requires the owner to live in the house. And both of us live in the first house, the second house, we want to give it to him. And give it to him. And when we pass away, and he's living there by himself, the homeowners association requires us to put his name in the deed. But then when he sells the house, that will be a capital gain of the base price of the purchase price of the original price of the house.

How can we avoid it? Yes. So Monica, is your intent to gift this property to him, this property that is your asset, you want to gift it to him? Yes, that's right.

Okay. Yeah, you know, I would always, I'm not an attorney, I would always, you know, run this by an attorney who can weigh in on this from an estate planning perspective. And as you make this transfer, I'd have a real estate attorney actually look over the process of making sure that it's transferred effectively and recorded properly. But essentially, you would be passing on the capital gains to your son, he wouldn't be able to avoid it when he sells unless he uses something called the 1031 exchange where he were to roll it into a like titled property, assuming it's an investment property. But if it's his primary residence, at that point, he potentially could take if he lives there two out of five years, the homestead the exemption for a domicile, a primary residence for himself 250,000. And as a married couple half a million dollars in gains, but it would be based on that original purchase price, and he would have to meet the the the requirement that he lives there two out of five years, you would also be dipping into the unified federal gift and estate tax exemption, which for 2020 is 11 and a half million dollars. So you got quite a bit of room there.

So most people aren't concerned about it. But you just have to know anything over then over 15,000 for the annual gift exclusion. And by the way, that's per recipient. So if he's married, and you're married, you could essentially gift 60,000 of the home's value without going against the unified lifetime exemption. But once you did go beyond 60,000, assuming you're both married, then it would start to eat eat away at the lifetime exemption. But there's no way to have a step up in basis if you're gifting it. So the only thing there I think would be an option is if he lives in there two out of five years as his primary residence prior to selling it.

But again, I would run all this by not only a real estate attorney to help you make sure that you transfer it properly, but in the state planning attorney, you could find both of those when you go to our website money wise live.org. Just click Find a CKA. And I hope that helps you. Alrighty, bye bye.

Thanks so much. What she wants to do does that I mean, assuming she speaks with the right people on this to make sure that all the details maybe even as they relate to her state, assuming she has the right person there is this sound like a very convoluted kind of thing? Or might she be able to do? No, I think she's because she's planning to give this property to her son anyway. She wants to go ahead and do that now. I don't see any problem with that.

That's her intention. All right, good deal. Thanks.

Lakeland, Florida. Hey, Greg, thanks for your patience, my friend. What's on your mind?

Yes, sir. I'm 58 years old. I have a little over $15,000 in debt. And I have over $80,000 still owed on my home.

And the home is not valued more than 120,000. But my thinking is taking money out to pay off the the debt that I have. And my other thought was pulling out of my money market. I have about 110 in the money market.

And taking about half and taking about half of that or taking 40,000 and paying off half the mortgage to lower and then refinance. Okay. The 15,000 in debt, Ken, is that credit card debt? Yeah, it's credit card and revolving charge.

Okay. And you said you have 110,000 in money market. Is that in a taxable account? Yeah, it'd be taxed when I withdraw. Yes. But is it a retirement account or is it a just a broker?

Yes, retirement account. Yes. Okay. And are you still working? Yes, I am. Okay. So talk to me about kind of where you are in your retirement savings.

As you look at perhaps between now and retirement, and you look at all the retirement assets you've accumulated to this point and what you're continuing to put away on a monthly basis between now and your expected retirement, do you feel like you're on track with having the assets you need to generate the income supplementing Social Security to fund your lifestyle at this point? That is hard to tell because my lifestyle is pretty low key right now, has been for many years. Don't make a whole lot of money, say 50,000 a year is what I make.

Okay. So it's not high end, but as far as anything savings, there's no savings. I have maybe 1,500 in savings right now, regular savings.

But other than that, that's pretty much it. Just recently, probably the past year and a half, I've had to change jobs. Last job, it was almost 30 years. Had to change jobs.

I've been on the job now for over a year and a half. I've been putting 6% of my pay into 401k, but it's not totally vested yet. Okay. And is the 110,000 in addition to other retirement assets that you have that are not vested or is that the total of your retirement? That's the total of my retirement. Okay.

Yeah. You know, I'm just a little leery of you pulling out 50,000 of essentially 50% of your retirement to pay off credit card debt and reduce your home mortgage. What I'd rather you do is kind of solve the issue that got you here in the first place, which perhaps is living beyond the income that you have because we really need this money to continue to grow. But at the same time, we've obviously got to get to a place where you're debt free and, you know, taking the pressure off by rating that retirement account, which is going to be very expensive money because it's all going to be taxable. And if you're under 59, it's going to have a penalty with it, although the CARES Act did waive that this year. But even then, without the penalty, still all taxable.

So you're going to take a pretty big haircut there. And then if you haven't solved the problem that got you there in the first place, my fear is that this debt would be back a year from now, except now we've got half the retirement account we used to have. So if a refinance is in order, meaning you can save at least a point, you're not going to extend the term and you plan to stay in this home for at least five to seven years, then I'd say go ahead and refinance, perhaps pulling out only enough just to pay off the credit cards, not the revolving accounts. But I wouldn't do that unless you've been able to demonstrate for at least three months, preferably six, that you can live on a budget. And so that's where I'd probably look first to credit counseling, where you can get the interest rates down, get on one fixed monthly payment and get those credit cards paid off that way without pulling out money from your retirement account that's going to become taxable.

So I'd slow down. I'd get a budget. I'd really focus on getting a budget that includes debt reduction on credit counseling.

And our friends at ChristianCreditCounselors.org can help you with that. I'd also make sure you have enough margin that you're funding an emergency fund because I want you to get that up to three months expenses. And then, you know, I would continue to fund that retirement account at six percent. And I'd ultimately, once the credit card debt's gone, like you to get up that up to 10 to 15 percent of your pay.

But I wouldn't be pulling out of the retirement account to pay off the revolving and credit card debt or reduce the mortgage at this point. Thank you, Greg. Let's go to Missouri. Mandy, we have a tiny bit of time. Let's do this at late speed.

Okay, what's the question? I have a potential lump sum of money that's getting ready to come in. And I don't know if we should pay off our home or if we should invest the rest or if we should just invest. I married my husband 45.

I'm 42. We have a combined monthly income of about $7,500. We have the house debt, but for the most part, we don't live over our means at all.

He wants to retire at 60. I just didn't know if we should invest it all because he just started a retirement account about a year ago. Okay, what's the house worth, Mandy? The house is worth about $3.30-ish, and we owe about $2.30 on it. All right, and what are you expecting to receive in this windfall? Honestly, we have no idea yet.

I would say a minimum of $400,000 from there. Okay, and do you feel like you're on track with retirement savings? No. He's got a good job, so he has Social Security that says it's going to be good.

But again, he's trying to retire at 60, which is only 15 years. Yeah, yeah. All right, and do you have any emergency savings right now? Yes. Okay, do you have three months?

At least, if not five, three to five, I'd say. So here's what I would do. I really like the idea of you all getting some of this money working for you because it sounds like you're behind and he's trying to fast track retirement. So I think what's really critical is that you all have a plan to make sure that the house is paid off by the time he and you retire, or certainly if he retires, because at that point we want your lifestyle to be as low as possible. So I don't know that I'd put all of it against the house right now based on what I'm hearing. I'd like for you to keep some liquidity and have some money working for you.

I think I'd run an amortization schedule to see how much extra you need to pay each year to make sure it's paid off when he retires at a minimum. Thank you for your call, Mandy. We wish you the very best. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Have a great weekend, find someone to help, and then join us again on Monday.