God’s Will Is Not More Stuff

Martin Luther once said, I have held many things in my hands and I have lost them all.

But whatever I have placed in God's hands, those I still possess. Hello friends. Nice to have you with us for another daily edition of Money Wise Live, finding God's wisdom for your finances. Kingdom Advisors President Rob West is our host. And today's program, let me quickly mention, is prerecorded, so we won't be taking any phone calls, but we have lined up some in advance that we hope to find interesting and informative.

So please stay with us. I'm Steve Moore, who holds your possessions. Rob, that opening statement from Martin Luther is pretty insightful, but of course he was just restating what the Bible already tells us about ownership, stewardship, and stuff, right?

Absolutely, Steve. And that's really the essence of the Reformation, going back to God's Word and nothing else for direction on how Christians should live in this world. Jesus gives us a long discourse on how we should view earthly possessions in Luke 12, that we shouldn't worry about what we'll eat or drink or where, as the Father already knows of those needs, and He will provide. Jesus says, Seek his kingdom, and these things will be added to you. Do not be afraid, for your Father has chosen gladly to give you the kingdom. And then, of course, in 1 John 2 we're told, Do not love the world, nor the things in it, if anyone loves the world, and the love of the Father is not in him.

So Martin Luther was merely restating a profound biblical principle and declaring that when he applied it to his life, during which he was excommunicated and declared an outlaw by the church in Rome, it absolutely proved true. Yeah, all right. So, understanding that, how do we take this teaching and get it from our heads to our hearts?

Yeah. Well, I would just say through planning and action. You know, the first action should be prayer. As believers, we must do this daily anyway, but include your finances in your prayer time with the Lord.

Do it together with your spouse if you're married. Seek agreement on how you should manage your money. Planning means having a spending plan. It's the only sure way to avoid overspending on things you don't really need. Part of it should be a plan for what you'll do with extra money, even if you don't see it yet. So it's critical to work up a spending plan. And again, ask God for his guidance as you prepare it. And by the way, we have volunteer coaches to help you develop a spending plan.

You can get access to them at MoneyWiseLive.org. All right. So what's the danger of possessions, even if we can't afford them?

Yeah. Well, I would just simply say things demand attention. You have to store them, clean them, fix them, oil them, maintain them.

And for you, Steve, that means changing that oil and replacing the tires, by the way. Also, if you're not careful, you'll find that acquiring things tends to push God out of first place in your life. God alone wants to meet our needs and gives us peace and fulfillment.

He wants to spend time with us and use us in his grand plan for the universe. That gets knocked aside if we look to fulfillment in cars, houses, electronics, new clothes, and recreational shopping. You know, physical things can never meet spiritual needs. Is this a bigger issue for those who already have a lot?

I would just say not necessarily. You know, remember the Bible was written during a time when most people had very little, but even then God was warning about not letting things crowd out his love. As we talk about often, 2,300 verses on this topic, it was important to the Lord. All right. Again, any practical thoughts or suggestions for combating acquisition addiction or stuff-itis?

Oh, there are many. And I would just say again, first, pray. Bring God into your finances. Wait two weeks or even a month before you buy something you don't absolutely need. The desire may in fact go away. Also, reflect on stuff you bought in the past and consider how long it kept you fulfilled.

And here's a big one, Steve. If you're married, make sure your spouse is aware of everything you purchase. That alone may limit your spending on unneeded things. Another biggie, consider not replacing things while they're still good, but only when they are no longer functional. You know, Howard Dayton, the former host of this program and a good friend of ours here, hangs onto his cars until they're just one rust stain away from, well, you know, stopping all productive work. That's more of a utilitarian approach to things.

Of course, you and your spouse have to agree and perhaps find a middle ground. All of this within reason, of course, if you're still wearing your high school bell bottoms, well, maybe it's time to splurge and, you know, buy some skinny jeans. I don't know. But let me save the best for last here. Ask God to help you be more generous. It's counterintuitive, but it's the key to breaking the chains of materialism, generosity. You're listening to MoneyWise Live with Rob West.

I'm Steve Moore. We're going to take a brief break, and then we'll be back with more MoneyWise Live. Many people adopt an attitude toward marriage and finances that it'll all work out somehow.

But sadly, it often doesn't. Financial woes can devastate a marriage, but there is a better way. God's Way. Money and Marriage God's Way by Howard Dayton will help you discover God's approach to growing your finances, strengthening your relationship with your mate, and cultivating Godly joy. Money and Marriage God's Way is available when you click the store button at MoneyWiseLive.org. If you have money in a retirement account or just a general investing account, you know the stock market can sometimes be like a rollercoaster. But it is possible to enjoy both profit and peace of mind in investing, no matter what's happening in the market. You can see a short video webinar on that topic at SoundMindInvesting.org. Since 1990, Sound Mind Investing has sought to offer financial wisdom for living well.

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Let's begin by going up to Rochester, New York, and Mary, what's on your mind? Hi, thanks for taking my call. Sure. I've been on my own for about four years after a 24-year marriage and didn't have any credit card debt at that point, but now I've racked up about $8,000 that I'm trying to get paid down. I've had it on one of those 0% for a year and that's coming to an end, so I'm wondering about rolling that over to another 0% and paying the 3% fee or pulling from savings. I do have enough tucked away that's accessible, but then that takes that right down, or splitting the difference using money from a whole life policy. What are your thoughts on that?

Yeah. Mary, I'm grateful that you called today and I'm delighted to hear you really focused on how you can get this paid off once and for all. I've got some thoughts for sure, but let me just make sure I have the numbers. You said $8,000 that you owe in credit card debt, and what do you have saved up currently? Well, I've got $8,000 in a liquid account and then there's about $8,000 equity in a whole life policy. I did pick up a little part-time job so that I can put extra on that as well. Yeah, excellent. And over and above the minimum payments, what do you have in the way of margin with this extra job that you could send for debt reduction specifically toward principal?

Oh, I've been paying $200 a month on it. Okay. All right. Could you do more if you really buckled down on the spending plan? It would be kind of tight because the mortgage and everything is on me as a one income now.

Okay. And then beyond that, when you look at this debt and you think about what got you there in the first place, was it an unforeseen event or was it just overspending over several years? Yeah, it was just a little bit overspending. I did take a trip that I thought that I would be able to coordinate and not having wanted to access using my own money, so putting it on the card and now it's bothersome to me that I've got this hanging over my head.

Yeah, absolutely. And last question, what would you estimate is the total of your monthly expenses? If you put everything together for a given month, including the minimum payments, but not any more than that, how much are you spending?

Probably close to $1,500. Okay. So if we were to take half of that $8,000 and pay toward the credit cards, that would still give you three months worth of expenses that you'd have available in savings. Here's what I'm going to suggest. I think we ought to get off the balance transfer game. I don't like you having to jump around not only because you're opening more cards, which have impact on your credit, but also then they're available to be compromised at some point, so you got to stay on top of them.

You mentioned the fee, the balance transfer fee, which is often 3% right off the top and I don't like you paying that. So what I'd rather you do is first start with that spending plan. Go back to the budget and say, what can I do to really take another hard look at this? Dial back every possible expense that you have that you could get away reducing.

Could you cancel the cable? Is there things you could do to limit eating out? I realize you've probably been through this exercise before, but we're really looking for one of those budgets that's just really lean and mean because we're singularly focused on trying to get out from under this credit card debt once and for all. That's the first step, and if you need some help with that, our MoneyWise coaches would be happy to walk alongside you in that process, Mary, to perhaps even help you think outside the box on areas you could cut back. That's number one because we want to free up as much as possible. Then we take $4,000 and we wipe out half of the credit card debt right off the top. We keep the other $4,000 in savings, which is going to be there to or $4,500 to give you three months worth of expenses, and then we take every dollar we can, the $200 that you have plus anything you find as you redo the budget, and we debt snowball it, which is where we take smallest to largest balance and really go after it that way. I think the key is as you begin to see those cards paid off, you'll get some really an emotional win there and you'll see yourself making progress and we're not going to have to invade this insurance policy and we're not going to continue to play the balance transfer game. The only other thing you may want to look at as you evaluate this is a credit counseling program. Our friends at Christian Credit Counselors could have the cars canceled, get the interest rates down, and help you pay this off 80% faster. That would be another approach, but those would be my two preferred approaches. Again, always starting with the budget, but then just going after them yourself and not trying to pull from the life insurance, not taking all of your savings away because then you're going to have to fall back to credit cards when the unexpected comes and certainly not continuing to jump around from card to card. Does that all make sense though? It does, and that's what I was thinking a little bit, but it's the balance that I'm left with. If I let the card ride, then it becomes a higher interest rate versus my bank with my checking account, they're offering something of 5.9 for the life of the loan, which I know I don't want to drag out or try to jump one more time to a 0%.

Yeah. Well, again, as long as you're committed to it and you're not going to allow that to let you perhaps back off of this extra income or increase your spending, I would be okay with one more move, but what I'd probably prefer you to do is start then with credit counseling if that rate's about to increase dramatically. Call Christian Credit Counselors or better yet go online, christiancreditcounselors.org. Start there.

If not, if that's not going to be the best solution, and I think it probably is, then maybe one more balance transfer, but again, you've got to just stay really laser focused on getting this paid off just as quick as you can. And we're glad that you called in today, Mary. Thank you very, very much. That music in the background means we have to pause. I love Rochester, Rob.

A lot of famous people come from Rochester, I'm told. I know you do. Yeah. Yeah. Come on. That's an opening.

It's a song, Steve Moore. All right. We'll be back to take more calls. This is Money Wise Live. How did you feel the last time you made a not so good decision? As Pastor Andy Stanley points out, our decisions are like the steering wheel of our life. And so you get decision making right, you get life right.

In his new book, Better Decisions, Fewer Regrets, you'll learn five critical questions to apply to every decision you make so you can feel confident you're getting it right. Request your copy with any gift to Money Wise of $25 or more at moneywiselive.org. If the heavy burden of debt is robbing you of freedom and peace of mind, Christian Credit Counselors can help. We're a nationwide nonprofit credit counseling organization that has helped over 300,000 individuals in the last 27 years get out of credit card debt 80% faster while honoring that debt in full. To learn how Christian Credit Counselors can help you, visit christiancreditcounselors.org.

That's christiancreditcounselors.org, or call 800-557-1985. 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. Whatever, whatever the thing is that's got us so intoxicated and got us thinking so weird, got us in such a dysfunctional state, it is not until we push back from the thing that we take the time to begin to wake up. It is like being, there are activities, behaviors and relationships that are so toxic and so dangerous that it is like coming out from under a drug when you get away from it. Six months later, you're going, what in heaven's name was I doing?

Have you ever noticed as well? You get back around it and it comes back again. Let me just tell you something. If anybody be willing to hear this, there are some people you never need to be around again. There are some people we need to never be around again. There are some substances we don't ever need to be around again because when we get back around it, that whole intoxication of it comes back and there we are with our bizarre thought presses again.

Surely somebody is getting what I'm saying today. I have been there and many of you have been there as well. That is the intoxication of Babylon.

That is what it is like to be under the spell of it. You've been listening to A Quick Word with Beth Moore. The study of Galatians is now available as an online experience. Sign up today at BethMoore.org or join Beth in January 2021 for the release of the printed workbook edition. On behalf of Beth Moore and the entire Living Proof team, Happy New Year. This is Money Wise Live. Your host is Rob West. I'm Steve Moore. Today's broadcast is a reprise edition of the program, but I think the upcoming information will help you and bless you and make you a wise steward of what God's given you. Hey, Corrine, it's Rob West. I understand you have a hospital bill or two. How can I help? Oh, sorry.

I was a real quick one. My portion is like a $1,800 and they offer me two options. They said I can either pay it in the lump sum and they'll give me a little discount. Like I could pay $1,600 instead of $1,800 or I can make a payment plan with them, but then it will be the full $1,800. So should I do the lump sum or should I do the payment plan and stretch it out, you know? Yeah.

Do you have $1,600 laying around that you could send? Actually, yeah. I just thought... Well, then take the discount, Corrine. Yeah. I mean, here's the deal.

I mean, are you feeling bad about it or kind of what is it you're wrestling with or is it just purely the financial side of it that you're wondering about? Well, okay. To be honest with you, someone told me that hospitals, if you can't pay or, you know, stuff like that, they can work with you. Even at my job, they said they can work with you, you know, you just let them know, you know. And the only way they work with me when she said, well, yeah, we can offer a discount. You don't have to pay the full $1,800. You can pay $1,600, but you have to pay that in full. Or you can make a payment plan towards the $1,800, but it will be $1,800 to go right back up. But I thought there might be another option.

Anything else? No. Healthcare providers are notorious for this, offering a cash discount. So if you're willing to pay in full, which by the way, most people aren't because most people go in for procedures like this or they go in for a hospital stay and they don't have any idea how they're going to pay for it and then they end up getting stuck with the bill, you know, they give you a cash discount if you're willing to pay it up front and in full and that's just a part of the deal here.

So it's not like you went to them and said, listen, I'm really struggling and you need to help me or I'm not going to, I mean, you know, as long as you treated this honestly and they're willing to offer you a discount, if you pay in full, I'd take full advantage of it if you've got the money to do it and get rid of it. Yeah. Thank you.

That's what I thought. Thank you so much, Corinne. And let's go to Chicagoland. Esther, thanks for holding what's on your mind today.

Hi. I had inherited my mother's house last year and I sold it for $40,000. I had to split the cost with my niece. So out of that split, I got $19,000 out of it. And I wanted to know if I would have to pay federal taxes on that.

Yeah. You know, when it comes to inheritance, you don't. Inheritance are not considered income for federal tax purposes, whether you inherit cash, investments or property. Now, any subsequent earnings on the inherited assets are taxable unless it comes from a tax-free source, which would not be the case with your mom's estate. So you could have a state tax on the estate, but not federal.

That would only kick in above right now. I think it's a state's worth more than over $11 million. So it would be significant unless along the way that lifetime exemption was eroded by gifts that had been made.

But generally speaking, Esther, you would not. Of course, details on your situation. It's never a bad idea, especially with a major life event like this, to run it by a CPA or a professional.

But bottom line is you shouldn't have any issues with this regarding federal taxes specifically. Also, I wanted to know, how should I invest this money? Well, tell me how much you're talking about, roughly.

$19,000. Okay. Yeah. And what is your age, Esther, if you don't mind me asking?

I'm 56. Okay. And so is this money you wouldn't anticipate touching for the foreseeable future?

Yes, I don't look to touch it. I just want to invest it or just save it for my day. Okay.

I like that. Well, I think the key whenever we have money is to define the purpose of it. And with that purpose comes the time horizon. So if this is money you say, you know, I just want to put it away for the foreseeable future. And my time horizon is at least 10 years, then we absolutely could look at an opportunity to invest it, take it and put it to work. So where do you put $19,000? Well, you're probably going to want to invest in one of two investment vehicles. One could be what's called a mutual fund, which is nothing more than a basket of investments. Could be stocks, could be bonds, the most typical form of mutual funds or something that's a little more modern, created more recently. And that would be something called an ETF, an exchange traded fund, which is nothing more than a basket of investments.

But instead of trading at the end of the day, it trades throughout the day like a stock. But in either case, what would probably make sense is for you to pick some high quality, broadly diversified mutual funds. They may be even what are called index funds where essentially, you know, when you hear about the moves in the stock market, what you're hearing is that the indexes, the underlying investments are moving up over time.

Well, you want with $19,000 probably not to go in and buy individual stocks with companies you might know. You'd want to invest in these indexes and really capture the broad moves of the market up and down. Now, the reason we say 10 years is because in any given time, the market goes up and down. So if you are a 10 year investor or more, history would tell us over the long haul, you're going to do quite well.

In fact, it's the very best way to build wealth over time without having any direct involvement like being a landlord of a piece of real estate. So where would you go from here? Well, I'd either go to Vanguard, which would be a great high quality company with low cost funds, index mutual funds. You could go to Soundmind Investing. They're all believers and they could help you pick out some good quality mutual funds. Or you could go to someplace like a Charles Schwab and use what they call the Schwab Intelligent Portfolios where you'd answer a series of questions and they would build a low cost index portfolio for you using exchange traded funds. So that would be my next move, Esther.

Either soundmindinvesting.org, Vanguard or the Schwab Intelligent Portfolios. And I realize there's a lot to process there. So after you do some reading on each of those sites, if you have any questions, give us a call back. Esther, we're glad you called today. Thank you very much.

Let's go down south, Fort Lauderdale and Janet. How can we help you? Hi, I'm just listening to your program.

I listen all the time. I have a car payment that's going to be done and I have $8,000 left on it. The car is going to be five years old in August. Okay. I have the money to pay it off. Would I be saving some finance charges there if I just go ahead and pay it off or just keep going? You absolutely would. Yeah. Janet, the quicker you pay that off, you'll save immediately the equivalent of the interest rate you're paying on an annual basis with a simple interest loan, which is what a car loan is.

And we love the idea of paying off consumer debt. Let me just ask you a couple of quick questions first. So you said you owe about $8,000 on the car.

What do you think the car is worth today? Do you know? Have you looked at that? No, no, I really didn't.

Okay. Well, you could go to Kelly Blue Book or Edmonds or any number of sites. Kelly Blue Book is KBB.com. Put in the details on the car and find out whether you actually owe more than the car is worth. You probably have maybe a slight bit of equity or maybe it's about even.

Let me ask you this. Do you have anything saved up in terms of emergency funds? I do. How much over and above $8,000 do you have? Well, total with my check-in and savings, I have close to $40,000. Okay, very good.

Excellent. And do you have any other debt other than a mortgage? No, just the car and the mortgage. That's my biggest payment.

Okay, very good. Yeah, I love the idea, Janet. If you've got six months expenses there in savings, you've got your lifestyle in check, you're living on a budget, you don't have any credit card debt, you don't have any other consumer debt besides your mortgage that you're carrying. I love the idea of paying this car off. You're going to guaranteed get the return equivalent to the interest rate that you've been paying to the car. Now you've got that car payment freed up to pay back into a separate savings account for your next car purchase.

And I'd probably open a separate account at an online bank or maybe your current saving institution, but specifically for that purpose and start building that up so you've got that cash there to buy the next one and you'll be really glad you did it. We appreciate you listening to the program. May the Lord bless you, Janet. Thanks for your call today.

Thanks, Janet, very much. It's MoneyWise Live with Rob West. Don't forget to visit us online, moneywiselive.org.

We'll be back with more right after this. Christian healthcare ministries enables believers to meet their healthcare costs affordably, biblically and compassionately. It's not insurance, but a voluntary cost sharing ministry based on the biblical example of Christians sharing each other's needs and members aren't fined under the law for not having health insurance. Christian healthcare ministries might be your health cost solution.

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Parents Rising, check it out at moodypublishers.com. Would you like your life to be infused with joy? Would you like to interject an eternal dimension into even the most ordinary day? Author Randy Alcorn says you can when you discover the Treasure Principle. In a concise, power-packed style, this newly revised and updated book offers a six-step plan to finding the immediate pleasure and eternal rewards of the Treasure Principle. And once you discover it, life will never look the same.

The Treasure Principle is available when you click the store button at MoneyWiseLive.org. With SRN News, I'm John Scott. Senate Majority Leader Mitch McConnell blocking a Democrat push to immediately bring President Trump's demand for bigger $2,000 COVID-19 relief checks up for a vote. The GOP leaders said the Senate would begin a process to address the issue, but the next steps are uncertain.

Mr. Trump has been pushing for more than triple the $600 payments that were approved by Congress. A strong winter storm has begun making its way across the upper Midwest, creating treacherous travel conditions and spurring warnings urging people to stay off the roads. The National Weather Service issued winter storm warnings for parts of Nebraska, Iowa, Kansas, Missouri, South Dakota, Wisconsin, and Illinois. Stocks gave up an early gain, enclosed modestly lower on Wall Street. The Dow lost 68.

The NASDAQ was off 49 points and the S&P fell 8. This is SRN News. So glad to have you joining us today. This is MoneyWiseLive. Our Facebook question of the day is, what are you doing to live more simply when it comes to material things?

I love the responses we got, Rob. Janice says, minimalism helps only by what you need and on occasion and only on certain occasions she wants a neater home with less cleaning. I say that. Laureen says, avoid what the world sees as the latest and greatest thing, including clothes, food, and gadgets. Love gadgets. Brenda says, I've been working to clear out things I simply don't use and don't need and provide them to people who can make more use of them. And that's always a great thing to give away something you're not using and see someone else who really needs it or can use it.

That kind of is a double blessing, don't you think? Oh, absolutely. Yeah. Alrighty. Let's go back to our phone lines.

Kipper, Kentucky. Hello, Judy. What's on your mind? I have an annuity and it's getting ready to mature in June and I wondered what I should do with it.

If I can take it out, put it in something more stable or what would you suggest? Sure, Judy. Tell me a little bit about the annuity. Do you know if the money went in pre-tax or is it after-tax contributions?

Do you know? After-tax. I had it in savings and put it over in this annuity. I didn't need it. Still don't need it.

Yeah, very good. And what is the cash value on it? What would you be able to get out of it? $82,000.

$82,000. Okay. And you said you are in retirement now, is that right? No, five years away.

Five years away. Okay, very good. And what other retirement assets are you accumulating besides this $82,000?

401k and then I have a retirement at work. Okay. And so as you think about retirement, Judy, and you look at what your expenses will be in that season of life, you feel like you'll be able to fund your lifestyle without touching this annuity, is that right? Correct.

Okay, very good. Well, you know, you've got a couple of options. Obviously, you could roll it over to another insurance product. My preference would probably be to go ahead and invest these funds outside of the annuity product. You would need to understand any tax implications when you pull it out before you take it out. So I'd visit with my CPA or accountant to make sure I understand the implications before I make any moves at all. But beyond that, you know, investing it, having it, you know, put to work for you in a way that's consistent with your goals and objectives.

The good news is because you've obviously followed biblical principles, you've sounds like you have plenty of savings to really last you throughout the rest of your life. This is going to be funds that if you needed for long term care or some major expense that were to come down the road, perhaps you want to do some additional giving along the way. This would be a great source of funds for that. And so if you don't have an investment professional, you probably want to connect with somebody to help you manage these funds.

This is a significant amount of money. And so you could connect with a certified kingdom advisor there in Kentucky by going to MoneyWiseLive.org. And what he or she would likely do is build an investment portfolio for you, again, that isn't taking unnecessary risk and yet still has a very considerable growth component to it, given that this is money you don't expect to touch any time soon, even though you're five years out of retirement and recognizing that you need this money to last if the Lord tarries and you have good health for decades. And so it just could continue to grow. And they'll probably build a mutual fund portfolio of stocks and bonds.

And, you know, that way, you'd have complete control over not only access to the funds if you needed them in your retirement years, but also control over the investments and the fee structure in terms of what you're paying someone. The last thing I might suggest, Judy, is for you to look at long term care insurance. Have you considered that? I have not.

Yeah. You know, that's probably your most your largest risk, I should say in this season of life is having a significant need for long term care that could erode your assets. We usually recommend you look at it between ages 55 and 65.

And it would, of course, need to fit into your budget. You don't want to take on something that you can't afford. But if you could, it would really help to offset that risk that the majority of Americans will need at some point in their lives.

And typically from 18 months to three years. And, you know, with the cost of nursing home care being, you know, upwards of 80 to 100 thousand dollars a year, you know, that could be something that really, you know, allows you to run through your assets quickly while long term care insurance would step in and cover that. So I would take a look at that as you're planning for that season of life. But other than that, hopefully that gives you some thoughts to consider. Judy, thank you very, very much.

Let's quickly move to Cleveland, Ohio. Jeanette, do you have a question for Rob today? Yes, I do. Thank you so much.

I listen to you often and I know you recommend saving three to six months of money per emergency, which is great sound practical advice. I've just always been curious. Where is that biblically? Yeah, well, you won't find specifically that that number in God's Word. What we find in God's Word is principles, starting with the idea in Proverbs that it tells us, you know, there's precious oil in the house of the wise, the foolish man swallows it up. And so we need to have some margin. We certainly see Joseph modeled that when he saved in the years of plenty for the years of famine.

And so I think this idea that God gives us more today than we're to consume today and we should take part of it and be generous. But we should also in recognition that we're commanded in First Timothy to provide for our families that part of that is having some margin or some savings that we can fall back on. Now, where does the three to six months come from building on this idea that as as wise stewards, we should have margin or savings? Well, that really is just around a very practical idea that if we were to lose a job or to have a major disruption in income, that that three to six month period is the period of time where it would typically take someone to replace that income by going out and finding a new job or something like that. Well, the sad reality is, and this study came out just last year and we've seen it before, nearly 40 percent of Americans, Jeanette, can't cover even a surprise four hundred dollar expense. And so what we're seeing is Americans aren't anywhere near three to six months on the average in terms of their savings. They're living paycheck to paycheck. But if we want to be wise and prudent, that three to six months would give us that cushion to allow us to go out and replace income or overcome, Lord willing, whatever disruption in income we had. So we wouldn't have to rely on debt, but we could continue to fund our expenses while we overcame that temporary shortfall. So the principle is biblical.

The three to six months is not. And I would say, as with any advice we give, you need to take it before the Lord and say not what should Rob and Steve do or what did they tell me to do? But you say, Lord, what would you have me to do and allow him to help you define your lifestyle, your savings goals, your giving goals, all of it.

We're just giving you guidelines. Does that make sense? Sure does. Thank you so much. You're welcome, Jeanette.

Thank you for your call. Rob, what's that verse that has to do with insects and ants and being a sluggard? Yes. Well, go to the ants, you sluggard and consider its ways. It's wise.

It stores up in the time of harvest. Yeah. For the winter that's coming. And so we need to follow that, Steve. We need to be storing up like that ant and be ready for whatever comes our way.

God is our provider, not our things, not our checking account, but we need to do our part as stewards. Now, when you said sluggard, and it could be just my screen, it seems to me that you looked directly into my eyes when you said sluggard. I think you're imagining that. You think so?

I would never think of you as a sluggard, Steve Moore. All right. Well, okay. Let's see what our listeners think. Hey, you're listening to MoneyWise Live with Rob West. Today's broadcast is prerecorded, so if you hear a mention of the phone number, please don't call us, but you can find us online at moneywiselive.org.

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It's MoneyWise Live with Rob West. Let's see who's coming up next. Jim is coming your way, then Esther. But first, we say hi to Sandra in Cartersville, Georgia. What's in your mind today, Sandra? Hi.

I retired this past September, and I want to know if I should pay off my mortgage with my thrift savings plan. Yeah. Okay. Tell me a little bit about the situation you're in. What is the balance on the mortgage, Sandra? A little over $60,000. Okay. Very good. And what do you have in your thrift savings?

$332,000. Okay. Very good. You've been a diligent saver.

What are you living on, Sandra? Are you pulling anything out of the TSP to supplement Social Security? No.

I've received my Social Security, plus I have a retirement check from the postal service where I worked. Okay. Very good. Well, I do like the idea of you paying off that mortgage. Probably don't want to do it in one tax year. Do you use a CPA, or do you do your own taxes? I use a CPA. Okay.

Very good. Well, what I would consider is connecting with that CPA and saying, listen, I'd like to be debt-free. I want to own my home free and clear. I want to reduce my expenses as low as possible, but I want to do it in a way that makes sense. You've obviously accounted for that mortgage payment in the retirement income you have, and you're not drawing from the thrift savings, so you're living modestly.

That's a good thing. But you're going to want to ask the CPA at what frequency should I pay this off? Meaning, what I think he or she will probably say is, let's do it over two tax years. Let's take $30,000 this year in 2020 and pay toward the mortgage, and then let's take another $30,000 next year. We won't push ourselves up into a higher tax bracket and pay more in the way of taxes, but what they're going to want to look at is, are you going to end up paying more in interest by waiting these next 11 months to pay it off? Then you would be saving in taxes by not paying it now. What they may come back with is, you know what?

It doesn't matter. You're going to save more in interest, so let's go ahead and pay it off now. Or they may say, no, it does make sense to do it over two tax years. Let's do half now and half next January. We'll let them decide that, but I think the bottom line is, Sandra, let's go ahead and get that paid off. It'll be free and clear. You'll put that money back into your budget, which means you need even less on a monthly basis. And at that point, you can give more or put more towards savings, whatever you want to do. Does that make sense?

Yeah, that makes a lot of sense. Okay. I'll do one more little thing.

Yeah, I'm sorry. Go right ahead. I'm at that age to where they want to take money out of my first savings. Because of my age, I'm over 70. Yes. And what do I do with that money? They told me that I have to do $11,000 this year and $12,000 next December, and I don't know what to do with the money.

Yeah. Well, there's a great opportunity there. You can give that money away, which would be a great thing for you to consider. You may want to look at rolling that to an IRA, and then that would give you the ability, Sandra, to do what's called a qualified charitable distribution. So any money that you're right now giving out of cash, you could instead give out from your IRA.

It would go against that mandatory distribution that you have that you're referencing, that the IRS makes you take every year, except you wouldn't have to pay the tax on it. It would go straight to the ministry or your church. And then you could, if you wanted to, reduce the amount you're sending out of cash. So you'd just be replacing it, but you do it in a way that allows the ministry to get more, and you're going to save some taxes.

So that would be one option. It would involve you rolling it to an IRA. If you didn't want to do that, what I would say is just put it in savings and then pray and ask the Lord, what would you have me to do? And it could be that he wants you to do even more giving than you're already doing. But once you're debt-free, and if you're paying your taxes, and I'm sure you are, and you've saved all that you need to save, and you don't want to increase your lifestyle, you've reached, Sandra, what I call your financial finish line, which really just frees you up to either continue to save, to pass on as an inheritance, or to be more generous and support the work of the Lord.

And that's where real joy is found, and I think you're probably already a generous person, but it could be something you'd have a lot of fun doing even more. Sandra, God bless you. Thank you very, very much. Let's move to Huntley, Illinois now. And Jim, we know you've been holding a bit.

Thanks for that. And what's your retirement question? It has to do with a question that came up. My wife and I are both over 70, and my wife has to make some distribution decisions, which we're kind of confused about. But then we heard that we've based our final expenditures on our social security and disability compensation that I get from the VA. And so we're focusing on that as our budget and our lifestyle. Now, but then we heard that the social security will be a distribution, no, it'll be lowered because of income out of any of the retirement accounts that we have. And that really bothered us. So I would like some understanding in how to deal with social security and the mandatory distributions that have to be done. Yeah.

Well, there's a number of things going on here. Let me just say right up front, Jim, going to SSA.gov or connecting with your local office is always a great idea. You'll find them to be very helpful.

And they can really explain what can often become some complex issues in a way that's easy to understand. Generally speaking, number one, you're not going to affect your social security benefits with any income. Once you're beyond full retirement age, you can earn as much as you want.

So that won't be affected. You will have to pay more in taxes on that social security. So for a 2020 tax year, there's a certain threshold. For instance, if your combined income is more than $34,000, you'll pay taxes on up to 85% of your social security benefits. Well, for a married filing jointly, $44,000, you'll pay 85% of your social security benefits in tax. If it's between $32,000 and $44,000, you'll pay taxes on up to half of your social security income. So if you're concerned about taxes, that is one issue. With regard to the required minimum distribution, you just need to make sure you satisfy the amount you need to take out every year based on your age and the IRS's schedule. And if you don't need that money, obviously, you could do what I told the previous caller, and that is you could do a qualified charitable distribution to send it directly to a ministry or charity, and they wouldn't have to pay the tax, you wouldn't have to pay the tax, you'd satisfy your RMD, and you could use that to offset money you were already giving out of cash.

Otherwise, you'd take it and put it in savings and, you know, ask the Lord to give you some wisdom on how to use it. Does that cover though the issues you're asking about? Or did I miss something? Yes, it does. And we've been in touch with Social Security, so that's helped us some. Okay, what is that qualified distribution to a charity?

Yeah, I'll just give you a quick synopsis, then we're gonna have to try to get to one more caller before we run out of time. But basically, if you're online, Google qualified charitable distribution. Essentially what it is, is your opportunity to go straight from your IRA to a qualified charity, which would be a 501c3, a church, a ministry, the amount is sent directly to them. When it is, or when those stocks or investments are sent to that ministry, when they sell it, they don't pay any tax on it. They receive 100% of the value of what you send, which means you don't have to take it out first, pay the tax and then send it a lesser amount to the ministry, it goes straight to them. And 100% of it goes against your required minimum distribution. And then you could, in lieu of that, no longer send what you were sending out of cash. And so it's basically just a more effective way to give and honor the Lord in your giving. Or you could do it over and above what you're already giving.

But it's something to look at because it goes directly against that required minimum distribution. Thank you, Jim. Delray Beach, Florida. Esther, you're our final caller of the day and how can we help you? Thank you for taking my call. Real quick, I am 41 and I am just trying to find a way to basically do God's work. And what you talked about earlier really hit me when you stated to be shrewd in your savings and be like ants where you wait for the harvest. So 41, I have about maybe $20,000 in a TSP S fund. I bring in about $3,000 a month and my expenses kind of come up to about $1,800, $1,900. I have an aggressive savings plan for about saving about at least $800 a month, which leaves me about $600 to miscellaneous items and, you know, things around. So I just kind of, I don't know if I need a counselor or something to just get me on the right road because I'm 41 and I only have $20,000 in the retirement. I don't know if that's enough and I don't think it's enough at my age.

Yeah. Well, you said you're saving about $800 a month on $3,000 in monthly income. That's 26% that you're saving.

That's tremendous, Esther. Where are you putting that? Just in my savings.

I'm not putting that anywhere right now. Okay. Do you have a retirement plan at work available to you? Yes, I do have a TSP fund. Okay. And you're putting, you're maxing that out? Retirement. Actually, I think I'm at seven. So the employer provided us 5% and I could probably put 5% myself to at least get to 10%.

Yeah. I'd look at putting 10 to 15% and actually get more of that money, assuming you have three to six months built up in emergency funds. If not, let's take that $800 a month and get to three months worth of expenses saved up in your savings. But then let's start bumping up that contribution to the TSP because that money is going to go in tax deferred.

You're going to get the deduction and that's going to help you make up for some lost time in building that up a little bit more quickly. And I think you'll be glad you did that. Esther, thanks very much. God bless you. And Rob West, thank you, sir. Always a pleasure. Money Wise Live is a partnership between Moody Radio and Money Wise Media. Our thanks today to our technical crew, Amy, Judy, Aaron, Jim, and Chris P. Thanks for listening. Join us again tomorrow.