Budgeting for Beginners

Hey, you've heard it before.

Everyone talks about the weather, but nobody does anything about it. A funny line, no doubt. But might we say the same thing about budgeting? Well, maybe you've done your share of talking about a budget but never really gotten around to it.

Or you've tried and failed and your technique needs some tweaking. So first up, financial planner and teacher Rob West talks us through the basics. And it's your calls on anything financial at 800-525-7000. We'd love to hear from you.

800-525-7000. I'm Steve Moore. Budgeting for beginners. That's next right here on MoneyWise Live. Well, Rob, we really do talk a lot about the need for a budget on this program. But we often don't have time to go through the entire process of creating one step by step. So I thought it would be great that we try to do this today.

Well, I couldn't agree more, Steve. So let me just say to you new listeners out there, no matter how much or how little you have, everybody needs a budget. There's no other way to stay on top of your spending, get out of debt, give to your maximum potential and plan for the future. Okay, and we'll go over how to create a budget in some detail. But we should also mention that we have a trained group of volunteer coaches all over the country who can also help you with this thing exactly. So just go to MoneyWiseLive.org.

Click on Find a Coach if you'd like to find a little bit more help after today's broadcast and they can get more specific with you. And Rob, do we have to call it a budget? Sometimes I think it's that word that causes fear. What do you want to call it today? A spending. Let's call it a spending plan.

Okay, I'm done with that. Or waffle fries. Let's call it that.

Everyone likes waffle fries. They do, but that might be a tad confusing. So we'll call it a spending plan. And by the way, we'll tell you about our brand new app that will help you do all of this in an automated fashion in a few minutes.

But Steve, let's get started. Step one is list your monthly income. That means your after tax income. If you have a regular job and your employer withholds taxes, it's the amount on your paycheck. If you have other income where taxes aren't withheld, well, you should only really count about 70% of that and put the rest in savings for tax time. Okay, great start. Now we have a number, our actual after tax income.

Now where? Well, step two is to list all of your fixed expenses, the things you pay the same amount on every month. These would include your rent or your mortgage payment, auto loans and insurance, credit card minimum payments. We'll talk about debt reduction beyond the minimum payment later, but get the minimums in there and student loans. Consider those as priorities because if you don't pay them on time, you'll get hit with late charges and include your giving in this step because that's certainly a needed expense. Determine a percentage for your giving and do your best to stick to it. If you try to put that in at the end of this process, there won't be anything left. Do it upfront. All right, good idea. All right, we take our income number and subtract fixed expenses. Now we have a smaller number to work with.

What's next? Yeah, step three is to list your variable expenses. These are things that vary from month to month. If you're not on a budget billing plan, your utilities would go here.

Other variable expenses would be groceries, household items and gas for the car. You'll never have to go over your bank and credit card statements, or excuse me, you will have to in order to get this right. Try to look back three months or so. You'll have to come up with an estimate, but you'll be able to adjust this figure in the months ahead. In fact, plan on adjusting it. Nobody gets estimated variable expenses right the first time.

That's for sure. Okay, we subtract our variable expenses. Now we have an even smaller number. Now what do we do? Well, step four is to budget some money for your wants.

We've already identified your needs. Now give yourself a little spending money for a few things that make life a little easier and perhaps more enjoyable. This could be an occasional dinner out or some other favorite activity, maybe a hobby. Use these as a reward for staying on budget. And here we'll give you a percentage. Try to keep your wants to 5% of your take home pay, 10% at the very most, because you'll need every penny for that next category.

Oh, this sounds ominous. What's the next category? Well, that's step five and it's to start paying off your debt. We're moving beyond the minimum payments here. You need to determine the amount of your remaining discretionary income that you can put toward debt that is above those minimum payments. Let's shoot for another five to 10% of income.

10% of course is better. Okay, that's five steps, but something's missing. Well, that's right. And it's step six, which is start saving.

And for the purpose of this exercise, we'll assume you don't have an emergency fund, so you'll want to start one, put some amount from every paycheck into liquid savings so you can get to it easily for unplanned expenses. And we'll tackle the rest after this. We will. And we'll come back with some encouragement as well.

800-525-7000. This is MoneyWise Live. 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. 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. SoundMind 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. How can we go on unless there's a renewed emphasis on prayer today? Billy Graham. There's no doubt that we as a people are in serious trouble today. If there was ever a time that we needed to be on our knees in prayer asking God to save us, it is now. What a glorious thing it would be if millions of Americans would avail themselves of the greatest privilege and the greatest power this side of heaven, the privilege and power of prayer. God answers prayer. With God, nothing is impossible.

No problem is too difficult. No burden too heavy for His love. If Jesus needed to pray, how much more we need to pray today. The scripture says pray without ceasing. Learn more about the power of prayer at FindPeaceWithGod.net. That's FindPeaceWithGod.net from the Billy Graham Evangelistic Association. 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 Christian credit counselors.org.

That's Christian credit counselors.org or call 800-557-1985. Thanks so much for joining us today. Our program is titled or called MoneyWise Live. Rob West is your host. I'm Steve Moore and we're taking your calls today on anything financial, anything that concerns you. Well, let's tackle it if we can.

800-525-7000. We've begun today's program talking a bit about how to actually put together a budget, aka a spending plan. And Rob, we were kind of closing in on the very end. I think we talked a little bit about building your emergency fund and we don't have too much money left as we've reviewed all the categories. Any last steps or reminders for us here?

Yeah, let me just run through these quickly. So step one, list your monthly income. Step two, you want to start with your fixed expenses. Step three is your variable expenses, those things that change month to month. Then four, try to put some money in for your wants.

We recommended not going over 10% of your take-home pay for things like eating out or hobbies, things that are fun that are necessary in a spending plan. But you want to make sure you keep enough available for these next few steps which are key to driving toward your goals. Step five is paying off debt above minimum payment so you can really try to get these balances coming down if not paid off quickly. Step six is to start saving.

This is where you'll start putting money away for an emergency fund or beyond that even for something like a down payment on a home. Now we get to step seven, Steve. The last of the two remaining steps here. Seven is to look for ways to cut spending.

Can you raise or lower the thermostat to trim your utility bills? Perhaps cut back on the grocery budget. You may have run out of money before reaching the end of step six and this is really how you make sure you have enough money for all of them. Again, everything should be on the table and do a hard look at what unnecessary spending is occurring and this is where some tracking may help over a couple of months because there may be some spending you don't even realize is happening and you want to identify that so you can trim it if possible. And then finally step eight and this is where our new app can really help. Step eight is to set up a system for tracking your expenses as you go forward.

This is really essential to know whether you're on track with your spending plan. Now we think the best way to do that is our brand new MoneyWise app. Our development team and I do mean team of three full-time developers have been working on this for eight months and it is amazing. It's available now on the Apple and the Google Play Store if you just Google MoneyWise app, MoneyWise biblical finance. What you'll find there is one of the core components of our brand new app other than the community where you can engage the rest of the MoneyWise community in questions and answers and comments and I even jump in there and provide some comments periodically and replays as well as the live stream for the broadcast here each afternoon on Moody Radio. In addition to that really the core piece is our digital envelope system and it's all the features I've ever wanted in an app. I worked closely with the team to make sure everything was in there so you can connect to 11,000 institutions, you can download your transactions automatically, it automatically categorizes. It's a true envelope system so it's always staying in sync with a real-time balance from your funding accounts be it checking and or savings accounts. It's all there and I think it really supports our methodology for how you should conduct a spending plan and track it on a monthly basis and you can use it on your smartphone or your tablet. There's even a web app to go with it as well. So where do you go to get that? Well just go to app.moneywise.org or go to your app store and type in or search for MoneyWise Biblical Finance. App.moneywise.org and there you have it, eight steps.

Rob, I'm going to throw, excuse me, I'm going to throw in a step nine but I'm going to put it way back before one if you don't mind. I'm confused but that's alright, go ahead. I know, I'm confused as well because you said you can save money by raising or lowering your thermostat.

Well which is it? You save money regardless, raising or lowering? Well it depends on the season, depends on the season, right?

So in the summer you'd need to raise it, winter lower it, on a sweatshirt. That's why you're the host and I'm the co-host. Now where was that going? Oh yeah, buy-in. If you're married it's important that you have mutual buy-in. A budget or a spending plan will not work if only one partner is willing to live by it or work on it. You really need buy-in and if you're struggling with that then we'd recommend that you really pray about this together. Kind of hard to fight about things when you're praying about it together and if that takes you a week or a month or a year that's okay.

Do that because your budget just won't work in the long term and it won't cement your relationship the way a spending plan ought to under God's headship. Alright here's our phone number 800-525-7000. Palm Beach, Heidi, thank you for holding and what's your situation? How can we help you?

Hi there, thank you for considering my question. My husband and I, we're praying about this and hoping maybe we can gain insight because we love listening to your show. Instead of applying for a conventional loan, we're considering a bank statement loan and we're hoping to see if you have any suggestions whether we should maybe stay away from that or definitely proceed as private business owners. We take advantage of the IRS breaks that we get so we show less income and that's why a bank statement loan was suggested to us. And then on the tail end of that, we are trying to figure out whether a bank statement loan would help us purchase a home or if it would be better instead to invest in our business versus maybe taking on the mortgage. We have zero debt right now and exceptional credit score.

Okay, so let me just make sure I understand here, Heidi, and we appreciate so much your question today. When you're talking about this bank statement loan for a mortgage, are you saying you could be taking out a mortgage on a home that's currently paid off? Is that right? We are leasing now. We sold our home a few years ago and so we would be taking on a new mortgage for a home. Okay, so you're going to be buying a home, moving out of the leased property, you're going to go out and search for a home and you're looking for financing for that home. Is that right?

That's correct. Okay, and have you decided how much you think you want to spend and do you have roughly 20% as a down payment? We do have roughly 20% down and we're looking at, because of where we are in the country, we're looking at high 400s, high 500s.

Yeah, okay. I realize that real estate there in South Florida has skyrocketed. The challenging thing is that obviously with what you're calling a bank statement loan, this is where instead of requiring a tax return and W-2s and pay stubs and employer verification, you're basically just going to rely on personal or in your case probably business accounts to prove income and cash flow because you own your own business. And so obviously if you have inconsistent cash flow or you can't get income documentation from an employer because you don't have one, you're in business for yourself, then you may not qualify for a conventional or an FHA loan just based on that information alone.

And so obviously that's beneficial. The downside is you're going to have potentially a higher interest rate, a larger down payment may be required, not every lender will even offer these. So have you gone as far as to see based on what you can show in the way of, you know, documented assets and business assets and income what your potential interest rate would be and what required down payment you might have? Yes, I learned this morning actually that our rate would be somewhere just under five percent. Well, I was just gonna say, yeah, unfortunately that's considerably higher than where rates are right now, you know, with 30 year rates being, you know, if you have good credit and good verified income, we should be south of three percent. You know, we're looking at 2.8 in some cases right now without even buying that rate down. So obviously in exchange for the ability to get a loan, you're having to pay higher rates.

So I would definitely shop that around. But I think I cut you off. What else were you going to say there? Well, we were planning still on putting 20 percent down. We're very, I mean, we're conservative spenders. As I mentioned, we have zero debt.

We're both of us are 50. And we've just been waiting and waiting and waiting and waiting for the real estate prices to drop in in southeast Florida. And they seem to be going the opposite way, whereas right now we're comfortably, you know, affording a hefty lease. But we don't feel that it's, you know, wise being my stewards of our money.

And we do want to be settled in something for the next 20, 30, 40 years. So we're looking at either taking less write off, you know, when we do our taxes where we have, you know, we've been blessed with great accountants who give us the courtesy of letting us know what we can write off. Whereas if we don't want to. So it's all within the code. And so we do that, which leads us with more income to disperse, you know, to where we want to tithe and what we want to support. But on the other end, it shows us making less income, which means we qualify for less of a mortgage.

And then we go back full circle because of where we live. Yes. No, I totally get that. And I think that's obviously one of the challenges, as long as you're within the law in terms of what you're taking as a deduction that I would encourage you to do that. You certainly shouldn't pay any more than you would be expected to based on the law. But I realize an unintended consequence, especially for somebody in your line of work, farming is you have a lot of write offs, but it can show less income. So I think the key is, you know, if you've been at this for at least a couple of years, sounds like you have, you can show steady income, even if it's less than you might have, you know, than the lender might be looking for. If you have other assets and good credit, then you should be able to qualify for a traditional loan. But if in fact you fall outside of the ratios, one way around that is to actually put more money down as a part of this process. So that might be something to consider there. But at the end of the day, if you have to go with this loan, you can always refinance later.

Just make sure that principal interest taxes and insurance is no more than 25% of your take home pay. Heidi, we're glad that you called and got through today. Thank you very much for your patience as well. We'll pray that God gives you and your husband real direction here. Thanks so much.

We'll be right back. 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. People's 412 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. This is the from me covenant. The reminder being that God was the one who cut covenant with Abram.

In verse 28, I'll just narrate this much to us, and we'll go on to 29. As far as the gospel is concerned, there are enemies on your account, but as far as election is concerned, they are loved on account of the patriarchs. What is he saying there? He's saying, I want you to love Israel.

I want you to love Israel because they are beloved for the sake of the fathers, the patriarchs, Abraham, Isaac, and Jacob. He said, but they're to be enemies of yours as far as the gospel is concerned. In other words, we're not to take up their belief system. We're not to sit back and say, well, now I can dig that.

I can see that. That's all going to work out fine, even though it is going to work out, and God's got it gloriously under control. But it's not for us to sit back and reason in our minds that their gospel at this point is not our gospel.

You understand what I'm saying? We're to stick firmly with what we know to be true. So as far as the gospel is concerned, enemies, but as far as election and love is concerned, they are dear because of the patriarchs. They are covenant. They have a from God kind of covenant. You've been listening to Beth Moore with today's quick word. The study of Galatians is now available as an online experience. Sign up today at Beth Moore dot org or join back in January 2021 for the release of the printed workbook edition.

And thanks for listening to a quick word with Beth Moore. 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 money wise live dot org. Hey, if you'd like to speak with Rob West today and I wouldn't you if you have a financial comment or question, give us a call right now, 800-525-7000. A lot of people have suggested to me off air that sometimes they find you a little scary, Rob. I'm sure there's plenty of people out there have no interest in talking. I don't know why, but of course you've heard that all the way back to your early dating years in high school. But that's behind you and you're a swell guy and he's good looking too.

If this were television, you would agree with me. I'm lost now. Where did we want to go? Oh yeah, we wanted to thank our listeners. We had an incredible week. Last Wednesday through Saturday was our fall share here at Moody Radio and God's people responded in ways that were just kind of mind blowing to be honest with you. I mean, they responded so generously. We were able to meet our goals and we're giving our listeners the thanks and of course we're giving God all the thanks as well.

Well, that's right. And it was so much fun to hear from so many of you who are faithful MoneyWise Live listeners calling in, talking about the program and mentioning that you've been a guest on the program at some point in the past. And so, yeah, just want to say on behalf of our entire team here at MoneyWise Media and Moody Radio, thank you, thank you, thank you for being so faithful to participate in what God is doing at touching and changing lives through this radio program and so many up and down the programming day right here on Moody Radio. So thanks again for your participation. Amen.

Thank you, Rob. Alrighty, let's go to Illinois. Kewaunee, Illinois. And Marlena, I have to ask, where is Kewaunee, Illinois? Kewaunee, Illinois is between Quad Cities and Peoria. Okay, it sounds almost like it needs to be in Honolulu or something.

I mean, Hawaii or somewhere, but rather exotic. Well, Marlene, thanks for calling today. And what's your question? Oh, thank you for taking my call.

And I really enjoy your show, Rob and Steve. So anyway, I have a 2000 this day where it's like over 165,000 miles. And the mechanic told me today that I need a new brakes or mounts, you know, and he said, it will be 987 all in all the expenses will be.

So what do you think? Am I gonna pay the $987? Or do I have to buy another slightly used car?

Yeah, or perhaps there's a third option, Marlene, perhaps there's a third option. And that would be we do the brakes and the mounts if they're necessary, but you shop around and see if you can pay a little bit less. That sounds a bit expensive, although Steve's the car guy, so we'll get him to weigh in in just a moment. You know, here's my general rule of thumb is I'd like for you to drive this car just as long as you can. We've talked about the fact that we just turned in our minivan on a newer car recently and it had 235,000 miles on it. I like the idea of buying them, paying them off as quick as you can, if not buying for cash, and then driving them as long as you can. Obviously, if you have a car, even though they should run north of 200,000 miles without extensive repairs the way they're made these days, if you have a car where the repairs are just continuing to mount, and certainly if repairs or even recent repairs begin to exceed half of the car's value, then it would be, as a good rule of thumb, time to think about getting a newer, perhaps used car. But the fact that it would need brakes and mounts doesn't scare me, that's a pretty routine expense. I think the question is, are you at the right mechanic?

Have you shopped it around? And are there other bigger issues going on? Steve, anything to add here before we head to the break? Yep. Marlene, just a couple of seconds and then we'll be back. Are you afraid to drive this car? I think sometimes because sometimes it's jerking, you know.

I feel jerking, you know. Okay. All right. Okay. Let's come back and talk about it some more right after this brief break. You're listening to MoneyWise Live with Rob West.

We're talking about a Buick with Sabre here. What should we do? Let's kick it around. 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.

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Go to mymoodyradio.org, mymoodyradio.org. 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. President Trump has tweeted he'll be leaving Walter Reed Medical Center this evening around 630 p.m. Eastern. Mr. Trump will return to the White House.

The President tweeted that he felt better than he had in 20 years earlier today. Press Secretary Kayleigh McEnany tested positive for the coronavirus. New York Governor Andrew Cuomo says he's ordering schools in certain New York City neighborhoods closed within a day to attempt to halt a flare-up of the coronavirus.

The restrictions aim mostly at neighborhoods home to the city's large Orthodox Jewish community. Tropical Storm Delta has formed and is expected to become a hurricane before hitting Cuba on a path that could eventually reach the U.S. Gulf Coast. Stocks closing broadly higher today. The Dow jumped 465 points.

The NASDAQ was up 257. This is SRN News. You're listening to MoneyWise Live with Rob West.

I'm Steve Moore. And just before the break, we were speaking with Marlene, who has a 2000 Buick LeSabre. She's gotten an estimate on a repair bill for her brakes around $900.

I'm thinking, Marlene, that was probably at a dealer. That sounds a little high. I think you could probably do better than $900.

But if you need all shoes and discs, it's going to be up there a little bit because that's a big combination job. Now, I asked you if you were afraid to drive the car. If it concerns you to drive the car long distance, let's say to another state to visit friends or relatives or something like that, if it really concerns you, then yes, maybe it's time to trade that in or sell it and get something new.

But if all it needs are brakes and your basic upkeep has been there all along, then I think you can get a few more miles out of it than $165,000. How do you feel about that? Yes, I think, yeah. And there are body mounts. Body mounts.

I'm not sure what that means. Yeah, body mounts. Does that mean the car is rusted in spots? Does that mean the car is rusted in spots?

Yes, that's okay. If I may, I'm going to say the body mounts are under the front. There's four body mounts under the engine, two on each side, and three out of the four are totally gone. Engine mounts. Those are engine mounts.

Yeah, yeah. And they've been rusted and they need to be replaced. And obviously, it depends a bit on the cost. But if you guys are really concerned about it, and you might want to be concerned about it, then maybe it's a good time to get rid of the car at this point in time. But again, if stuff starts costing you more than half of what the car is worth, as Rob mentioned, that's a great rule of thumb.

So that would be a reasonable expectation and recommendation, okay? Thank you, Steve. Appreciate your help. And Rob, okay, God bless you. God bless you. God bless you, Marlene.

Thanks so much. Steve, just a little bit more here. So Jim, who's doing research today, said Kelly Blue Book value on that for private party sales only around $1600.

So obviously getting to half is not going to take much. But that doesn't mean you shouldn't get a second or a third quote. Perhaps call your church and see if they have a recommended resource, somebody who goes to the church who's known that they could check it out with and see if there might be another option. Yeah, I love that suggestion, Rob.

Thanks very much. Let's see, we had another caller that we weren't able to get on the air, Rob, and I'm having trouble finding his call. So maybe we could come back to that. Well, I'll tell you what it was. Yeah, it was Dave.

He had to hang up. And we mentioned the new MoneyWise app a few moments ago. And he called and asked if we would just verbalize his question here. It says, does the budgeting feature of the new app allow you to break down costs into different categories, as in itemizing a total from a receipt from like Amazon or Walmart.

And the good news is absolutely. The team just added a new feature in the last two weeks where we can split transactions. And so Walmart would be a great example. You have a bill coming from or spending at Walmart, but it goes into three different envelopes. You can just split that out into whatever those envelopes are.

And the team is adding new features all the time. But that is one that's there. So if you want to download the MoneyWise app, do that in your app store today.

Just search for MoneyWise Biblical Finance. Yeah. Dave, great question.

And I trust you were there to hear it answered. Thank you very much. Again, our phone number. We have open lines at 800-525-7000.

Long Island, New York. Doug, you're a senior in college. You're wanting to borrow or thinking about borrowing some money. What are the specifics here? Yeah. Hi.

Thank you, first of all, for taking my call and some of the specifics. Yeah. As you said, I'm in my last year of college and I need to get a loan for about eight thousand dollars or so.

So not too crazy. But in the past, I have had a co-signer with this loan. And now I want to get a loan by myself with no co-signer. The difference between then and now, the reason why I didn't try to apply for a loan without a co-signer then was because I didn't have a credit score. Now I've had a credit card for probably about six months or so and I've worked myself up to a pretty decent score at about mid 700. So my question to you guys was, do you think it is worth it applying for this loan and potentially having it ding my credit score?

Or should I just try to go back with a co-signer again? Yeah, Doug. So I'm assuming you don't qualify for any federal loans at this point. Is that right? I don't believe so. No. Yeah.

OK. So just for the benefit of everyone listening today, you know, with a federal loan, you would qualify and parents would not be included in that or another co-signer. With a parent plus loan, they would be taking full responsibility for it. And then with a private loan, often there is a co-signer and most often a parent. I'm not a big fan of that, primarily because when we look at scripture, we just see clear warnings that are very plain about the idea of co-signing.

The Bible is very clear that we shouldn't do it. I would just add, unless you're willing to assume responsibility for it, you're ready, willing and able to step in and not damage the relationship. But oftentimes people go in with the best of intentions. For instance, in your case, Doug, you might go in thinking, yeah, I fully plan to pay this back. I'm going to graduate.

I have plans to get a job. Something doesn't happen the way you want. And now you've got this co-signer who's taken legal responsibility. And in the event you can't make the payments, they have the choice to either assume those payments so they don't damage all parties credit or, you know, to go ahead and start paying it themselves. And that often results in collateral damage relationally, just because even though you had the best of intentions of taking care of it, now you're unable and they have to either assume it until you're able to or have resulting bad credit.

And that just creates real problems. And by the way, the Federal Trade Commission tells us that half the time somebody co-signs, that's in fact the way it plays out. So for those reasons, I'd rather you not take a co-signer in there. I'd obviously rather you not even take the loan in the first place. But as long as you're not borrowing too much and it sounds like you're right on the tail end of your college experience, so hopefully you wouldn't be borrowing a whole lot. And you'd come out with an expectation that you have a job that would be able to support the amount you're borrowing so you could get it paid back in a relatively quick period of time.

So this thing doesn't hang over you for quite a while. So bottom line, I would absolutely go into this look without a co-signer if you absolutely need the loan in order to finish your schooling. Does that make sense?

It definitely does make sense. And I would much rather prefer going into this by myself with no co-signer. It really just boils down to whether or not the company giving me the loan would accept that. And I don't want to apply for this loan just to get denied. That was really my question. Do you think it's even worth it to apply?

I do, yeah. Given what you're telling me, I mean, it's obviously difficult for college students but not impossible. And in fact, there's several lenders that specialize in loans without a co-signer. So I would check NerdWallet as one option. You can also look at Student Loan Hero. Just do a Google search and you're looking for lenders that would give you the greatest likelihood. I wouldn't worry about any temporary impact to your credit score as a result of you shopping for this loan. And keep in mind, any inquiries that you have within a 14-day period for the same loan type are going to be considered one.

And a temporary decline of 20 or 30 points is not a big deal. So if this is the direction you're headed, I would absolutely go ahead and start shopping it. Okay. And we're glad that you called, Doug. And we wish you the very best as you work through your final year in college there. Thanks so much.

You're listening to Money Wise Live. Here's our phone number. And we have some open lines, which is not often the case at this stage in the program.

So this will be a great time for you to get through. 800-525-7000. 800-525-7000. If you haven't checked us out online, I urge you to do that. It's MoneyWiseLive.org.

We'll be right back with more after this. 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.

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Hi, I'm Bernie Diamond. There's something about watching kids play. Maybe you're a mom or a dad, and you know, when you watch the kids, it kind of focuses the mind. The dreams we have for them help us sort the wheat from the chaff. It's amazing how we can wander through life thinking things and doing things that are okay but not brilliant, not the best.

We watch something on TV and we think, yeah, that was okay. But if someone asked us, well, would you like that for your kids? Would you like them to see that or to think that way? We'd quickly answer, oh, no.

The reason is that most parents want the best for their kids, the very best. What if God's like that? What if God looks at us and sees some of the rubbish that goes on in our lives and he just aches? What if God's like any dad?

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The Treasure Principle is available when you click the store button at MoneyWiseLive.org. Whether it's saving, giving, getting out of debt, managing what you have, or buying a new Buick, we're here to discuss it with you and to help you with it. We have, well, we have pretty much full lines right now, but here's the number anyway. 1-800. They're going to shoot me back behind the window, but 800-525-7000 is our phone number. We'd love to chat if we can squeeze you in, so let me stop talking and go to Spokane, Washington. Arlie, thanks very much for being there and what's on your mind?

Hi. I'm a recent widow, and I've got two easy questions. My husband had most of our finances in one bank, but then he had some in two other banks. And I'm wondering if it would be wise for me to keep that the way it was, or if it would be wise to just combine all of them into one bank.

Yeah. You know, Arlie, from my vantage point, there really isn't a reason to have more than one bank in play, as long as you don't have more than 250,000 on deposit, because you've got the FDIC insurance as protection. And, you know, if something happened and this particular bank had a problem, there may be a temporary disruption. But if you're at a large, national, highly rated bank, that shouldn't be an issue. And, you know, ultimately, based on the FDIC, backed by the full faith and credit of the United States, you would be guaranteed to have access to your money on deposit, as long as it's not in stocks and bonds, it's just cash on deposit. You'd have a guarantee that you could eventually get access to the money. And for that reason, you may want to have somewhere between 500 and 1000, as much as maybe three days worth of expenses at home in a safe and secure place. But I just really don't see the need personally to have more than one bank in play just creates an unnecessary, in my view, complexity, because you have to keep up with more than one account.

Okay, that's good. My next question is, I've got several thousand dollars in cash here at home, and I have it in a safe. Is it wise to use that cash for my daily expenses? Or should I put that in the bank and use my debit card?

Yeah, that's a great question. You know, again, I think there's something to be said about having, you know, rule of thumb is somewhere between 500 and 1000 dollars on hand, if you have the ability to do that, or another way to think about it is to say, what are my expenses, you know, on average per day, and I'd want to have as much, you know, somewhere between three and five days worth of cash available, just so I can get through, you know, that period of time if there was some disruption in terms of access to cash. So you'd have to determine what that number is, if that's more than a, you know, somewhere between 500. And I would say on the upper end, a couple of thousand dollars, you know, then, you know, if you're carrying significantly more than that at home, I don't know that there's a reason to do that.

It just creates, in my mind, another safety concern. So I probably would take something beyond that number and go ahead and put it on deposit at your bank. You're not saying that that should be the amount of your emergency savings, weeks worth of money, just liquid dollars cash on hand. Yeah, yeah, completely different than emergency savings, which I would keep in an FDIC insured high yield savings account. And for that, you'd want three to six months expenses.

But yeah, Arlene's talking about just specifically cash on hand at home. Arlene, we're sorry to hear about your husband's passing. We wish you the best with that and hope that information helps you today. Thank you.

Out to Wyoming and Carla, what's your question for Rob? Hi, can we call? Yes, ma'am.

I had just a question. I recently inherited some money from my parents and I was just wondering what would be the best place for that money? Sure. Carla, give me a sense of what you're planning with this money. Do you plan to reduce some debt? Are you looking to invest it? Do you just want to keep it liquid for a period of time as a reserve account?

What are you thinking? I wanted to give some to my children. I have three children.

And, you know, a couple of them are struggling because of the COVID. So I was going to give them some of it. And then I wanted to keep some of it liquid and invest in some of it because I'm only 64 and probably living for 20, maybe 30 years yet.

Okay, very good. Well, here's what I would do. You know, the first place I would put it is in an FDIC insured savings account. I'd probably get it out of your checking account just so you have some separation between that and your daily funding account where your living expenses are coming out of. So if you don't have a savings account like that, you could open up one at your current financial institution where you have your checking or if it's money you plan to keep in there for some period of time. I like the idea of opening an online savings account with an online bank, looking at a high yield savings. High yield is relative right now. It's probably less than 1%, but 0.8% is better than 0.0005% or whatever you're getting at your brick and mortar bank. So I would look at Ally Bank or Capital One 360 or Marcus, one of those. You can even look at the American Express high yield personal savings.

All of those would be great. And you can link them to your checking account so it would be safe and protected with FDIC insurance. But you can access the funds through checking with just a quick electronic transfer that would probably take two to three days at the most.

So it's accessible, but not too accessible. Then you'd want to go ahead and determine how you want to allocate it, pray through that, decide how much you might want to give out of that. And then with any amount that you'd want to give to the kids, just keep in mind the best way to go about that is to follow the annual exclusion that you have for gifting purposes, which this year is $15,000 per person.

You could go over that. It would just eat away at your lifetime exemption, which right now is north of $11 million. You don't probably need to worry about it, but if you stay within the annual gift exclusion, then you know you don't even touch the lifetime exclusion. And then you'd want to make those transfers as the Lord leads. And then with any investment dollars, depending on how much you have left, you could either do that yourself with something like the Schwab Intelligent Portfolios or Betterment, which is kind of an automated robo-advisor approach to setting up a diversified, low-cost ETF portfolio. And that's just basically where you take an indexed approach to investing. You could get some more information on investing from our friends at soundmindinvesting.org, and you'll find a wealth of resources there. And if it's money that's north of probably $100,000, Carla, that you'd want to invest, I'd connect with a Certified Kingdom Advisor there in Wyoming.

Just go to our website moneywiselive.org and click on Find a CKA. Carla, thank you very much. We wish you the best.

Let's see if we can get to one more today. Lina, Illinois. And Jessica, you have a question about tithing, huh? Yeah, I was wondering if reporting your tithing on your taxes is biblical or just plain the right thing to do. Yeah, Jessica, I think it's a great thing to do, in fact, as long as you're giving for the right reason, right? We want to give out of a cheerful heart. We want to give as an act of worship, as an extension of returning to God a portion of what he's entrusted to us, recognizing it's all his to begin with. And I love the idea that you're a systematic giver to the local church.

I think that should be the starting place for all of us. Now, if the government is going to recognize that and say, based on your giving to a 501c3 not-for-profit, we're going to allow you, if you itemize, to deduct that from your taxes, then I would say take full advantage of every opportunity given to you by the government to reduce that tax liability. We should certainly render unto Caesar what is Caesar's. I would even go as far as to say we should do it with a thankful heart because taxes paid are symptomatic of income or provision from the Lord. But I don't think that in any way discounts the idea that if a deduction is available to us that we shouldn't take it.

I think we should. And I think that would apply to any giving to a nonprofit, including your local church for your tithe. So the reason they give you that statement is for the reason that you're describing here, which is deductibility on your tax return. And so I would take full advantage of it. Jessica, thank you very much.

Great question. And Rob, with just a little bit of time left, it's been kind of a crazy weekend with COVID and lots of headlines that we're not quite sure of these days when it comes to the news and the upcoming election and COVID and all the rest. Any thoughts, anything that the Lord's been saying to you over the last three or four days that might help and bless our listeners as they work through this themselves?

Yeah. You know, Steve, I think it's a season where we need to be leaning into God's word and we should always be doing that. But I guess here's the thing that I've been thinking about lately is perhaps for some of us, this is a time that we should turn down the noise of this world and turn up God's voice.

And that's always a good thing to do. But if you find yourself getting maybe concerned or frightened, maybe fearful as it relates to your money or anything else, maybe overly anxious, I would just make sure you're spending time in God's word and perhaps there's a need to turn down some of the other voices and inputs into your life. As it relates to your money, I think we always need to start with this idea that God owns it all and we're his manager. You see, you are manager of the resources of the King of Kings. And the question is, what does God want you to do with his money? And make sure that the story being told with how you're allocating his money reflects what's really important to you.

And if it doesn't, make a change. And perhaps that would be starting with dialing up your giving and dialing back your lifestyle. I don't know what it looks like for you, but I would just always be prayerful and ask that question, Lord, what would you have me to do with your money?

So, Steve, those are just a couple of random thoughts, but hopefully that's helpful. Well, I think it's very helpful. I mean, there's a very good chance that to those of us alive and living and listening today, that this, this COVID situation may be unique to us and a once in a lifetime situation. And so it would be a shame to miss what God has for you during this difficult time. Obviously there is growth involved whenever we face difficult times.

So pray about that. And we're glad that you listen today and glad that you tell a friend about the program as well, because MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. We would love for you to tell a friend so that they can tune in and listen as well. My thanks to Aaron, Dan, Amy, and Jim. Jim, of course, in charge of all biblical and automotive research. Remember that this month, all car sales are final.

They come with a free set of MoneyWise floor mats and dash mounted deodorizer. Thanks. Join us again.