5 Questions About Giving

We'll be right back. Rob West chats with Laurie Farquhar of the National Christian Foundation to explore how to do that. Then it's your calls on anything at 800-525-7000.

800-525-7000. I'm Steve Moore. Five questions about giving, next on MoneyWise Live. Well, Rob, our guest today is Laurie Farquhar, Chief Strategy Officer in the South Florida office of the National Christian Foundation. She and her team help families and individuals with creative giving solutions to experience more joy in their generosity. Well, that's exactly right, Steve, and tis the season for giving.

Laurie, welcome to MoneyWise Live. Thank you, Rob and Steve. It is a privilege to be on your show. I'm a frequent listener on the local Moody radio station as I'm in my car traveling to appointments, and I really appreciate the wise counsel and love hearing the questions from the callers. I've learned a lot from both of you, so thank you. You are welcome, and we are delighted to have you here, especially since you're a regular listener. All right, obviously we want folks to be aware of end-of-the-year giving opportunities, but I love the creative giving solutions you provide. And Laurie, they're really for any time of the year, aren't they?

That is correct, Rob. We encourage generosity to be part of our lifestyle, and that's not just your money, but it's truly living a generous life with your time, your talent, and yes, also your treasure, your financial resources. Yeah, well, that's what NCF is all about, and that's why we're delighted that we have the opportunity to partner together to help God's people give wisely. All right, last month we learned about giving stock with the National Christian Foundation, but today as we head into the Christmas season, we want to talk about how to start giving conversations with our kids and our grandkids. Who doesn't want to do that? And even if some families aren't able to be together in person this year, and I know to start, Laurie, you have a great story to share about that. Would you do that?

That's right. I love this story. We had a family that came to us last year, a grandma and a grandpa, and they wanted help to develop a lifestyle of generosity with their kids and their grandkids until they got creative. And this grandma and grandpa have 11 grandkids, and they live all over the place, not necessarily just here locally in South Florida, and they wanted to teach even the youngest of these kids to learn at an early age the biblical principle that God owns it all. So grandma opened up a giving fund for each one of her kids, and she transferred $1,000 from their giving fund at the National Christian Foundation to each of the children, giving them $1,000 each. Then she asked them to come to think about which charity that they would like to give to, do the research, figure it out, talk to their friends, talk to their parents, talk to their families, and then come back to her and tell her the story of what they chose and why. That is incredible. I have to know how it turned out. I love this idea.

Yes, it was phenomenal. So the adventure begins as they go about doing a research and having $1,000 to give away. She gave them a year to give the money away, and then she asked them to write letters explaining who the charity was, why they gave there, what was the result of the donation that they made. As a result, many of these kids now are either volunteering at those charities, or that it has set them off on an adventure to find other charities that really inspire their hearts. It's an ongoing story and one that we love to get updates on. Oh, that's incredible. I suspect this is the kind of thing that you could help our listeners with if they wanted to do something similar with a giving fund.

Is that right, Lori? Absolutely. We have a lot of resources online at ncfgiving.com and we'd be happy to talk to anybody about some of these ideas. Excellent. Well, I know you have five questions at NCF that you ask everyone you meet with to help them. So just around the corner, we're going to unpack these five questions.

That's right. Lori Farquhar with us today from the National Christian Foundation, the South Florida office, how to be generous, creative ways, best ways to be generous, that and more coming up. This is MoneyWise Live. Many people are experiencing financial challenges such as credit card debt, downsizing, dead end jobs and depleted savings.

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That's christiancreditcounselors.org or call 800-557-1985. 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. Number two, he reveals himself as our El Olam in our sense that something so much bigger surrounds us. Now I want you to think in terms, if you could think like a lost person for just a moment, like a person who has never met Christ, does not have a personal relationship with God, still eternity has been set in the hearts of man. Where there are times whether somebody wants to admit it or not that they have got to know there is something so much bigger than us. And not only do I have sudden feelings of that, but I think it coincides and I've suggested to you to say it another way, in our sudden sense of smallness. When was the last time you felt that? I told you all about our helicopter ride through the Grand Canyon and that sense as we were zipping through that canyon and the sense of how long it has been there. I think that every single time I stare at a certain mountain that I love so much and when I just need a moment to realize and hear God say, it'll be here when you're gone. It was here before you came and you know what? Take the load off. You're not that good to have you with us today.

It's Money Wise Live with Rob West. I'm Steve Moore and we're big fans of the National Christian Foundation. You'll hear us talk about them quite often. They have offices all around the country to help us be more generous, to be more thoughtful with our giving. They have lots of creative ways to help us maximize our giving. From their South Florida office, Laurie Farquhar is our guest today.

Rob? Well, we're so delighted to be able to talk about the great work of NCF. And I know as you guide givers and wise generosity in making decisions on the where and the how much of their giving, you have five questions, Laurie, that you ask everyone you meet with.

And I'd love to unpack those today because I know for our listeners, it'll help them process their own giving. And the first one is who really owns the things that we have? Why do you start there? That is the most important question of all. And the answer is, God owns it all. That's our first principle and the same one that our family used to inspire their grandkids.

One of the things that we do with our families at the National Christian Foundation in South Florida is we give everyone a copy of the book, The Treasure Principle by Randy Alcorn. And he says it this way, God owns everything. And we are the manager of the assets that God has entrusted to us. I love that. And you know, we talk about that idea as being the foundation that everything builds on when we talk about managing God's money, because when we understand his ownership, and we put ourselves in the proper context as steward and our money as a tool to accomplish God's purposes, it really is a game changer.

It changes everything. And certainly that would include our giving. All right, Laurie, the next question you ask is what resources has God given us? God has entrusted all of us with different kinds of assets, cash, cars, real estate, stocks, businesses, certain intangible assets as well, like relationships, even connections, visions for things that you want to accomplish in your life. All of those are things that come from God, and he has entrusted us to steward them well.

All right, I love it. What resources has God given us? Okay, the next question is, families should ask themselves, how do we view our resources?

Why do you ask this question next? Some of these are questions that can only be answered by talking with God and your family and trusted friends. And it takes some time. Honestly, I know that I've begun the conversations with my kids in their 20s. And it's hard to talk about some time.

But don't rush the process of answering these questions. And don't be too sure God won't reveal more of the plan to you as you move forward, and you trust him. Yeah, you know, I know you all talk about creating a family purpose statement and really talk about the values that are important to the family, which really then guides a lot of the giving decisions that are made. I'd love to hear you talk about that family purpose statement.

What is it? And why is that important? Well, it's really important when you as a family talk about your values as a family. And then if you can really start that conversation, and you want your children to share your financial philosophy, you start as soon as you can, even when they're younger, just like that family, I mentioned the grandma and the grandpa, some of those kids were quite young, you know, seven years old. And that can make the conversations with your family much more natural, because you're talking about it all the time. So you share your values, and you and then you also share with them what shaped your life, and how that impacted your beliefs. And you'd be surprised, kids have no idea, you know, what you personally went through and why you are the way you are. So that's a great way to start a family purpose statement. I love that there's such intentionality there in terms of passing the legacy down, and really building it around the values is such a great idea. All right, now for an especially exciting question families should ask, where should our money go and when?

Talk to us about that question. Well, it is possible that standard assumptions about building wealth and leaving it behind when we die, maybe exactly the wrong way to pass on money to those that we care about. The Bible actually says in Proverbs 2021, an inheritance quickly gained at the beginning will not be blessed at the end. So successfully acquiring wealth is one of the greatest advancements a family can have. But it can also trigger problems within the family and confuse even the most basic communication between people.

Yes, I love that. Well, and the last question for families who want to share an adventure in giving is how much is enough? This is such a key question that every family needs to answer.

Why is this so important? You know, I hear that question a lot, but I usually hear it framed as, how do I set a financial finish line? How do I know how much I'm supposed to have at the end? And that really all goes back to your family purpose statement, your values? How do you actually view the assets that God has entrusted to you?

And how are you stewarding them? So it is, it's a big question. How much is enough? And it's different for everyone. But if you continue to have those conversations with your family, this will start to evolve.

And there's a lot of great resources out there for different types of questions that you can ask yourself and family members to figure out how much is enough. Yeah, it sounds like the idea here, Laurie, is really just to approach this with intentionality. This is not just going to pass down haphazardly.

You've got to really be thoughtful about it to communicate the why and to unpack the values and even give your kids through the question asking process and even a great vehicle like a giving fund, the tools and the way to begin to exercise this giving muscle, if you will, so that they can catch the excitement that we read about in the scripture, and really make it a part of their lives as well. Wouldn't you agree? Oh, so agree. Yep. And Jesus says something about how we interact with our treasures says something about our hearts, right?

Yep. I love that. Well, I love that, you know, going back to the story you started with today, that simple exercise led to grandkids that are becoming more and more generous. I'm also so thankful for the work of NCF and all that you do to help folks give wisely. Laurie, thanks for stopping by today. Thank you.

It was a pleasure to be with you. Laurie, how can folks get more information about the resources you offer? To explore more family and legacy resources, visit ncfgiving.com slash giving strategy. What you'll find are resources because our team at NCF loves to come alongside families as they're having these types of conversations.

Laurie, that is great information. Thanks again for being with us today. And if you didn't get that one more time, ncfgiving.com slash giving strategy. Now, speaking of giving, Rob, we have some exciting news we want to share with our listeners, right?

Well, that's exactly right, Steve. We are delighted to say that a generous friend and donor of MoneyWise Media has stepped up to say this year we want to help spur on more giving to close the year strong and expand the outreach of MoneyWise Media moving into 2021. And so this generous donor has said, I want to double every gift to the ministry between now and December 31st. So would you consider a gift here at year end to MoneyWise Media? Every dollar you send will be doubled, which means you can double your impact and thanks in advance. Great information. Thanks, Rob. And if you'd like to make a gift, visit MoneyWiseLive.org, click the donate tab.

We'll be right back. The financial wealth you leave behind could be the best thing that ever happened to your loved ones or the worst. In splitting heirs, giving your money and things to your children without ruining their lives, Ron Blue explains why it's important to make these decisions now instead of forcing your heirs to do it later.

Splitting heirs will foster a real appreciation for the precious resources that God has entrusted to you. And it's available when you click the store button at MoneyWiseLive.org. Do you feel like your hands are tied with debt, preventing you from serving God? If you have credit card debt, Christian credit counselors can help. Through our debt management program, we can get you out of credit card debt about 80% faster while honoring your debt in full. For more information on how Christian credit counselors can help, visit Christiancreditcounselors.org. That's Christiancreditcounselors.org or call 800-557-1985.

800-557-1985. 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. Number two, he reveals himself as our El Olam and our sense that something so much bigger surrounds us. Now, I want you to think in terms, if you could think like a lost person for just a moment, like a person who has never met Christ, does not have a personal relationship with God, still eternity has been set in the hearts of man. Where there are times, whether somebody wants to admit it or not, that they have got to know there is something so much bigger than us. And not only do I have sudden feelings of that, but I think it coincides, and I've suggested to you to say it another way, in our sudden sense of smallness. When was the last time you felt that? I told you all about our helicopter ride through the Grand Canyon, and that sense as we were zipping through that canyon, and the sense of how long it has been there.

I think that every single time I stare at a certain mountain that I love so much, and when I just need a moment to realize and hear God say, it'll be here when you're gone. It was here before you came. And you know what? Take the load off. You're not that important. You see what I'm saying? I'm important to Him. In the big scheme of things, it's all going to go on. If something happens to us overnight, we're going to get on the news tonight.

We'd have to be in a former president. You've been listening to Beth Moore with today's quick word. We have two ways to experience, now that faith has come, a study of Galatians. The online experience is now available at BethMoore.org.

The workbook edition will release in January 2021. Either way, Beth would love to have you in Bible study. Merry Christmas from Beth Moore and the team at Living Proof Ministries. It's MoneyWise Live. Your host is Rob West. I'm Steve Moore.

Happy to have you aboard today. God's word tells us in 1 Corinthians, all things are lawful to me, but not all things are profitable. And then of course, without consultation plans are frustrated, but with many counselors, they succeed. So if you're thinking through a large decision these days, be prayerful about it. Maybe get some counsel from others who know God well, and ultimately just don't make quick decisions. Be thoughtful and careful.

Crystal Lake, Illinois. Marilyn, nice to have you there. What's on your mind? Okay. I have two small IRAs that I've just let be, and they are just traditional. And I don't know whether I should move them to a Roth or some of my other investments.

Yeah. Okay. Tell me what your plan is moving forward, Marilyn. Let's set those two small IRAs aside for a second. Are you still funding retirement accounts? I am retired. I am blessed to have a pension and social security, so I don't need that money. Okay. But I know a Roth is tax-free, but other than that, I don't know if that's the only difference.

And at my age, if I should move them somewhere or just let them be. Yeah. And what is the total amount you have between the two IRAs, roughly?

It's just about 20, 22,000. Okay. You know, I would probably just leave that there, Marilyn, and here's why.

Okay. Really, the Roth is most effective over a long period of time. You are correct that the primary difference is with the traditional IRA, as the money's going in, you get the deduction, but it grows tax-deferred. And then when you take it out in retirement at some point, if you need it for an unexpected expense or you need a stream of income, you would pay tax on it as income in the year of the withdrawal. With the Roth IRA, same contribution limits, but you don't get the deduction when the money goes in, but it grows tax-free. So when you pull it out, you get the return of capital, what you initially put in, of course, tax-free because you've already paid the tax, but then you get all the gains tax-free as well.

But that works most effectively when it has a long time to grow. And so you've got a lot of gains built up and during your working years, you're a little bit more aggressive in your investment strategy. So you benefit from all that. At this point, you would probably want to be more conservative with the investments, which means there wouldn't be as much gain. And in the year you converted to the Roth, you would add all of that amount to your taxable income. So for instance, if you converted it all to a Roth, you'd have an additional $22,000 this year in taxable income for federal taxes. So I don't like that option. The only difference here, other than the way it's the tax treatment moving forward is that with the traditional IRAs, when you get to 72, you would have to take that required minimum distribution or RMD.

That's not the case with the Roth. So I'd probably just stay with these and make sure they're invested in a way that's consistent with your goals and objectives. You could combine them into one just to limit some of the complexity of it. So you're just looking at one statement each month. But other than that, I'd probably just leave them right where they are. Thank you so much.

I really appreciate it. I wonder why they don't recommend a Roth when you're, you know, I don't know why they don't recommend a Roth. Yeah, you do hear quite a bit of talk about a Roth when you're young, but most people like the idea of getting that tax deduction up front, which they would get through the traditional. And so for that reason, many people opt for that IRA.

But I think the Roth is gaining notoriety and is really beneficial, especially for young folks looking to save. Marilyn, glad you called. God bless you. Thanks so much.

Let's go to Macedonia, Ohio. And Leon, what's your question for Rob? It's kind of a dynamic situation where I'm trying to, with my wife, make a decision about how we should, where we should put excess funds for her small business in regards to retirement savings plans. The major thing that's changed where we're just going to do an individual 401k with the remaining funds is that we'll have an intern because she's pregnant.

So trying to discern what we should do with the remaining funds now in regards to putting them into a retirement instrument. Yeah. Leon, is she going to have an employee of the small business that will be earning W-2 wages? So she will have an intern who will be earning W-2 wages starting in about a month. Okay. And will she earn more than $5,000 over the year? Yeah, absolutely.

We exceed our expectations just in the time between August and December. Okay. And do you plan on adding additional employees as you move forward?

No, it's almost so for the extended future, it's going to be a small business where we have maybe one employee at a stretch, two part-time employees when she's giving, you know, the period where she's giving birth just to help her. Gotcha. Okay.

Very good. Well, you know, you do have some options. If you don't have any employees, you've got more options. But when you add the employee, I like the simple IRA.

You can learn more about it online. Basically, it's a type of traditional IRA that's designed for small businesses with 100 or fewer employees. To be eligible, an employee has to have received at least $5,000 in compensation in the previous two calendar years and expect to receive at least that much in the present calendar year. But you can put in pre-tax dollars through elective deferrals. And then the IRS requires that the employer make a contribution on behalf of the employees, which is seen as a benefit, of course. And this can be a dollar for dollar match of up to 3% of compensation or a flat 2% for everyone. In this year, you can put in $13,500 as an employee.

So that gives you a little bit more contribution potential than the traditional or the Roth IRA. So I check that out as a first option, very low cost and easy to set up. Leon, we're glad you called. We're going to have to run, but we wish you the best. Thanks so much.

This is MoneyWise Live, but today we're not live. So if you hear that phone number, please don't call, but do stick around. Lots of good information ahead. We'll be right back. of each other's medical bills.

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That's moodyjobs.org. Retirement, what comes to mind? Yeah, that's right, but it may be that God has a greater purpose for your retirement than what you just imagined. In his book, An Uncommon Guide to Retirement, Jeff Hanen suggests that retirement needs to be viewed from both a biblical and practical perspective.

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With SRN News, I'm John Scott. 2020 will go down as the deadliest year in U.S. history with deaths topping 3 million for the first time. It's due mainly to the coronavirus pandemic. California is desperately searching for nurses, doctors, and other medical staff, perhaps from as far away as Australia as the coronavirus surge pushes hospitals to the breaking point.

With many of the state's hospitals running out of capacity to treat the severest cases, the state has brought in and deployed more than 500 temporary medical staff members. The U.S. economy expanded at a 33.4 percent annual pace from July through September. That's according to figures released today from the Commerce Department. On Wall Street, stocks were mixed. The Dow was off 201 points. The Nasdaq gained 65.

The S&P 500 dropped seven. This is SRN News. Matthew tells us in Matthew 6 verse 21, for where your treasure is there will your heart be also. We're glad you're listening today. Thanks very much for that.

Let's go to Chattanooga, Tennessee now. And Laina, what's your question for Rob? So I have a question on early retirement, social security retirement. My mother-in-law, she just turned 52 and she has been asking about it and I've been kind of helping her. And as far as I'm aware, if you file for early social security retirement, you know what, 62, 63, whatever it is before your full retirement age, you get penalized and your payment will not increase ever, as far as I understand. She's under the impression that it will or it should increase because she talked to her brother who lives in California and he told her that even if you do retire before your full retirement age, your payments will be increasing about five to ten dollars monthly and then it will eventually reach the amount that it would be at full retirement age. I wasn't sure if that's something that they have there at California, but if you can just give me more information if that's even a possibility here in Tennessee because she just thinks that there is a possibility it will increase and I just want to warn her that if she does take it out, that payment will stay the same. So if you can give more information on that.

Yeah, very good. Well, the bottom line is, you know, once you begin taking it, you're going to lock in your benefits other than a cost of living adjustment. So you've got to really determine when you want to begin, you know, claiming the social security benefits. If she starts taking it at 62, she will likely have a 25 to 30 percent reduction in her benefits over the life of the benefit. But if she waits, it will increase ultimately to full retirement age, what she was scheduled to receive, and then beyond that up to age 70, she can have an additional amount added to it of about eight percent a year that will be added to the benefit. So the question is, what's the right time to take it? I would always encourage somebody to wait until at least full retirement age if they have the ability to do so. Now, some people aren't able to do that and so they take it early and they then get that lower payout over the balance of their lives. If you have other sources, either you can continue to work or you just are able to not claim it, then allowing that to continue to grow is really going to be a benefit to get to at least full retirement age of whatever that might be for her and then beyond that with that additional amount. So I think it really just you have to start with where is she at, what are her income sources, what are her needs right now, how long is she able to continue to work, and then allow that to dictate when she begins to claim for social security.

But it will lock in other than the cost of living increases at that lower amount once she claims the benefit. Does that make sense? Yes, yes, thank you. Okay, very good and thank you for calling. Thanks, Lena.

Let's go out to Minden, Nebraska. Austin, we know you've been holding for a while, we appreciate that. What's on your mind? Hey, yeah, thank you guys for taking my call. Sure.

I really appreciate it. My question revolves around debt. I guess a little bit about my story. But I'm 23, I just graduated college in May, and I started full time on my family farm. And of course, you know, in farming, there's a lot of people have a lot of debt to be able to operate. And I guess my question was, you know, I understand pay off your mortgage and all your personal debts, especially your bad debts, as quick as you can. I'm wondering how that translates to an operating loan or a short term one and a long term one, where it's in the short term, it's getting paid off yearly and then in getting started again yearly.

Yeah, so that that's, I guess that's where my question is. Yeah, you know, I think we do have to recognize there are different types of debt, Austin, you mentioned a couple of them, there's, you could classify some as good and bad debt. And the way I would distinguish between those two is, are we borrowing for something that is going to appreciate over time? Are we borrowing in such a way that it's not going to keep us from accomplishing other goals and objectives? Do we have unity with our spouse, you know, all of those things, and the bad debt would be borrowing for things that are depreciating, and where there's higher interest rates involved. So we always want to prioritize paying off with margin.

And that means we're living within our means. So we have extra cash flow that we can apply to debt reduction beyond the minimum payment, we always want to start with that consumer debt, things like credit cards, of course, car loans, student loans, things that we want to get paid off just as quickly as we can. And then we move to other types of debt, like adding some to our mortgage, trying to pay off mortgage debt, even though it's for an asset that should be over time appreciating. Now, with a business, I would say that's another perhaps good use of debt. Many businesses use debt to smooth out kind of the ebbs and flows of the business cycle, and they do so very responsibly. I think the same principles apply that we see in God's Word related to the warnings around debt that we need to heed for a person or a business. And there is great benefit in being debt-free even as a business. But we recognize that I think it's in a different category as long as the debt service is factored into the plan, and it's in the business budget, so to speak, you know, then we can manage that and use it appropriately, even though as a business, we want to work over time to getting to where we can eliminate that debt if possible, and in some cases, it won't be possible.

So I think that's really kind of the thought process behind it. There's nothing sinful or wrong about using debt as long as we have an absolute commitment to repayment, and we're thinking about it in terms of our overall stewardship responsibility in managing God's money. But given that, tell me what additional questions you may have specifically related to this loan that you have.

Sure. So I got a mortgage, about $50,000. I live in a small town, a small house, but the housing is pretty cheap. And I got student debts that I think I'm going to get paid off or really close to paid off all in one year.

I'm going to attack that pretty hard. I guess as far as the operating goes, you know, is there a certain percent that you want to be at? You know, my long-term goal, especially when it comes to borrowing particularly, you know, I want to be able to buy land so I can continue the legacy of the farm and continue to glorify God with the means that he's given me. I guess there's, my mind's always turning as far as financials and especially with the farm. And I guess my particular situation, I farm row crop with my family. And then on the side, I started a cattle operation that right now is not really impacting my income very much.

It has the potential to do it to impact in a medium sort of way. Well, here's what I would say. Unfortunately, we're going to have to hit a break here, Austin. I would just say you're on the right track personally with the debt.

There's not really any hard and fast rules of thumb I can provide for how much is too much. I think you need to go back to your plan, really look at the numbers, make sure the business can support whatever debt you have so you're not getting overextended. We appreciate so much you're calling today. Thanks for your faithfulness and honor honoring the Lord with his money. Austin, great question. We appreciate your call today.

Hope that information helps you. God bless. This is MoneyWise Live with Rob West.

We'll be right back. You probably have a strategy for your finances, your career, even your retirement. But do you have a strategy for your giving? At the National Christian Foundation, we can help you create a giving strategy to inspire your family, maximize your resources, and leave a lasting legacy of faith. To learn how, visit moneywise.org slash ncf. 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.

This is Barry McGuire. I'm a car guy here to help you understand God's purpose for your life through the eyes of a layman. The opportunity to share your faith during this Christmas season is greatly magnified with the busyness of Christmas. More than any other time of the year, you're engaging with people who are serving your needs for buying and returning gifts.

Multiply your encounters with people tenfold. And every encounter is an opportunity to lead one more person closer to Jesus. Keep in mind that most of those who are serving you would rather be serving their own needs. At that very moment, they're missing their Christmas so that you can enjoy yours. And it's that dynamic that elevates your opportunity to minister to every person serving your needs this Christmas season. A gentle, caring Christian more concerned for the person in the need can move that person closer to Jesus with a sincere thank you and a God bless you. Your job is to ignite revival outside the walls of your church by moving everyone every day closer to Jesus.

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Get your copy of The Unsaved Christian at moodypublishers.com. Whether it's saving, giving, getting out of debt, managing what you have or investing what you have, we're here to discuss it each day and to help you with it if we can. He's Rob West. I'm Steve Moore and it really is a joy to talk with you each day at this time. So let's continue that by going to Chicago.

And Titus, how can we help you buddy? Hey, thanks for taking my call. Appreciate it.

I listen to you guys all the time. So the situation is, me and my wife are expecting our first child in the summer and her car is in 04 and it's falling apart. So we want to get a safe, reliable SUV that hopefully will last a long time. So we're just trying to decide how much of our savings should go towards the new car and how much we should keep. Some other tidbits of information to know are that we have about 17,000 right now in savings and she will not be working once the child comes. And my estimations are that we'll be kind of right on like making just as much as we'll probably need to be spending. So there's not much margin once the baby comes. So yeah, that's kind of where we're at.

Yeah. All right, Titus. Well, first of all, congratulations on this new child you're expecting. That's wonderful. This is going to be an amazing journey that the Lord has you on and what a blessing that is. I'm glad that you're thinking about it now and I realize there's a lot changing. Not only you're going to have a new little one at home, but with her not working, there's going to be additional demands on your income. So I think you need to be really well planned.

Sounds like you've already started that. Perhaps you've done a deep dive into that, but I would just make sure you understand the full implications of that, both in terms of being realistic about what's going in the budget and making sure that you count not only the recurring monthly expenses, but the non-recurring expenses that happen throughout the year. Those categories we often forget about, like insurance payments or homeowners associations, maintenance for the car and the house, those kinds of things. So we don't end up funding overspending with debt that builds up over time. And then, by the way, when we go to pay it off, we have to stop overspending in addition to paying the principal and the interest.

And so that's where that really becomes challenging. So just make sure you have a clear picture of what that budget is going to look like. I would also say there may be some savings there with her not working that you'd want to factor in. Perhaps you're not going to spend as much on gasoline.

Maybe the wardrobe budget needs to be adjusted. And so there may be some pickups there that you need to factor in also, but really take a look at that. Now, when you said you're going to be living right up to the edge, does that include this car payment if you add a car payment for the purchase of the SUV? We did not include a car payment just because over the last year we have spent about 150 on average on car repairs because, like I said, her car's old and has had a lot of issues. So we just left that as, like, okay, we can have up to 150 per month loan if we need one to go along and to stay, like, with the current spending.

How much are you looking to spend on the car, Titus? So we were thinking around 10 because, like I said, we have about $17,000 right now in savings. And so if we spend somewhere around 10, we could just do a flat down payment with no loan because we're going to try to start living on what we expect to be living on when the baby comes. And then that way her income can just go, for the next six months, can just go straight to the savings to replenish the down payment. So that's what we're thinking.

Yeah. Well, I like the idea of you buying it with cash. I'm a little nervous about you getting so lean on your emergency fund. But if you spend the next six months and take 100 percent of her income and rebuild it, that's great. I just want to make sure you all aren't being too overly optimistic on the what it's going to take to fund all of your expenses throughout a year, including some of those often overlooked categories. Steve, buying an SUV for a small growing family, $10,000, obviously that's not going to go very far.

What is your counsel there? Well, I would imagine you're going to end up buying at least a five-year-old car if you're looking at an SUV for around $10,000. Are you comfortable buying from a private owner or do you feel better buying from a dealer? My brother knows a lot about cars, so I wouldn't mind buying from a private if he was able to come with me because he would be able to look at the engine and all that and tell if it's a...

Right. Well, I like private owners as well because I know a little bit about cars and it doesn't scare me and I've done a lot of that kind of thing. But I would start with my church.

I really would start with my church to see if anyone has something for sale. Obviously, that would be someone you assume could be trusted, would tell you the truth about the car. Other than that, I would look at Craigslist, AutoTrader, cars.com. Again, if you're looking at private owner cars, the market is full of used SUVs these days. So if you find one you can't afford and you have to pass one up, don't feel bad about that because there is going to be another one.

I promise you there will be another one. And if you're talking with a dealer, well, you just want to get the best price possible and it's never the advertised price. If there's ever anyone that can be talked with and dickered with a little bit, it's car dealers for used cars these days. And then my last suggestion, if you're buying something that's five years or older, try to keep it under 50,000 miles if possible.

And I would buy import before I would buy an American, but that's just me. Okay? Some thoughts. Sounds great.

Thank you for the advice. Thanks, Titus. And I'd be comfortable with you using that 10,000, no more. And let's really focus on rebuilding that over the next six months. And we appreciate your call today. Yeah. Buy a blue one, Titus.

I like blue, but that's just me. Danville, Indiana. Hello, Pam. What's your question for Rob? Hi.

Thanks for taking my call. I've always wondered why it's smarter or wiser to reinvest dividends from mutual funds compared to just having to cut a check instant to me. Yeah. Well, one of the key benefits of dividend reinvestment is that your investment grows faster than if you just pocket the dividends and rely solely on the capital gains, the appreciation of the underlying stocks and the mutual fund to generate the wealth. So it's an inexpensive, easy, flexible way to grow the overall value of your investments by just taking those dividends, plowing them right back in. And the goal is for that investment to perform well over time.

But now you have two things working for you, Pam. You've got the dividends that are reinvested in the form of additional shares, and then you've got the appreciation of the underlying investments in the fund itself. And so if the goal is growth, which is why we invest, that's going to help you get there. Now, why would you not do that? Well, maybe you're at or near retirement and you need the income. Maybe the underlying mutual fund is not performing well. And so you'd rather move it to something else. You want to diversify by taking the dividends in cash and reinvesting them somewhere else, or your portfolio is out of balance. And so you want to put it into other assets that would make sure you have a proper overall investment allocation.

Those might be the reasons why you wouldn't, but I would always, as a first option, take the reinvestment just so your investment grows quicker using the dividends as a part of that growth. Do you follow? I understand. Okay, very good. Well, we appreciate your call today. Thank you very much. Thank you, Pam.

Okay, thanks very much. I think we can squeeze in one more up to Blue Ridge, Georgia, a pretty part of the state. And Ginger, you're thinking of buying a mobile home. Is that the scenario? Yes, I want to know if it's a good idea. All right, tell me a little bit about it, Ginger. This is somewhere you're living currently?

Yes, my family changed three years ago. My husband left us and some people graciously let us live in this mobile home. And now they're offering to have let us buy it. And I don't know if it's a good idea for a few reasons.

It's old and needs a little bit of work done. I know mobile homes, you know, don't really appreciate in value that they're giving me a really good deal on it. I need to buy a home in the area because I don't have a home. And I don't know that I could afford a much of a different kind of home, but maybe I could.

If I do buy this home, I would definitely have to live in it. I couldn't pay for it, you know, and something else at the same time. So I'm just not certain if, you know, on some hand, you know, it seems like a really great idea, but I'm just not sure. Yeah. Well, I like the idea of this is somewhere you already live.

You obviously know it well. I think the real key here is, is it going to fit within your budget? Do you have the ability to buy it for cash, Ginger, or would you be financing it? No, I would have to finance it. And I've already talked to my bank just to see how that would work.

And they don't, they won't finance it because it's old. But I might could even get owner financing. And I know there are other lending institutions that will lend, but I don't know what their interest rates are. Yeah, you're probably going to pay a little bit higher interest rate. So I'd check into that oftentimes a credit union will be a great option there as well. But I think the key is to recognize that this really could be a great option for you. Again, if it fits in to your overall financial plan, it's not going to stretch you too far to have that mortgage with the corresponding interest rate versus what you're paying right now. I assume you're paying rent, is that right? To buy a house home. But you know, of course, that's a lot more expensive.

And I don't know that I could. And Blue Ridge is a very touristy area. I know as an investment, I could always rent it if I ever did end up living somewhere else, I think. Sure, sure.

Well, I do two things. Number one, let's, let's get an inspection and and understand exactly what condition it's in. Number two, let's explore the financing option, figure out what you'd qualify for, what the interest rate would be and make sure the payment's going to fit into your budget.

And then thirdly, I'd make sure you get a professional who has some expertise in your area, a real estate professional, maybe from your church to make sure that the price they're talking about is fair and accurate. That's a good idea. Get someone who's objective, who can walk through this with you, Ginger, and we'll pray that God brings you that person.

Thanks so much. We are out of time. Judy, Amy, Courtney, and Jim doing great work behind the scenes. For Rob West, I'm Steve Moore. Thanks for listening. Join us again next time.