How to Build Credit

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Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. In Proverbs 22, Solomon writes, a good name is more desirable than great riches. To be esteemed is better than silver or gold.

And that bit of wisdom is especially true today because a good credit score actually means having more silver and gold in your pocket. Today, Kingdom Advisors President Rob West tells you ways to make that happen. Then it's your calls on anything financial at 800-525-7000.

800-525-7000. I'm Steve Moore. How to build your credit. That's next here on MoneyWise Live.

Well, Rob, help me catch up here. We start out talking about having a good name, but how does that relate to something like a good FICO score? Yeah, generally speaking, always acting in a godly and righteous manner will cause others to hold you in high regard. As a follower of Christ, your good name gives glory to God, whom we all serve. Now, in the financial world, having a good name means having a good credit score. It's how lenders judge you, and it translates into having more silver and gold, if you will. All right, so my good name is numbers, I guess, my good score. But how exactly does all of that work? How does it do that?

Well, several ways. The higher your credit score, the more likely you are to be approved for loans, credit cards, and mortgages, and the lower interest rate you'll be offered. That much people tend to know. What many people don't realize, however, is that these days your credit score may also determine what you have to pay for home and auto insurance. The higher your score, the less you pay, and increasingly, employers are using candidates' credit scores in their hiring decisions. A candidate with a high credit score might be offered a job over someone else, actually.

And that would translate into more silver and gold in your pocket, eventually. So let's say I'm just starting out in the world. I don't have a credit history. I'm 20 years old.

How do I get started? Well, the first thing you do is get a basic understanding of how the credit system works. And for our purposes, let's concentrate on your FICO credit score, since it's the one most lenders use.

It's based on the information held in your credit reports at the three credit bureaus, Experian, TransUnion, and Equifax. And it ranges, Steve, from 300 to 850. Anything lower than 580 is considered poor. 580 to 670, fair. 670 to 740, good. 740 to 800, very good.

And anything above 800 is exceptional. Your score indicates the likelihood that you'll repay money that's loaned to you. That number is based on, though, five factors. They are your payment history, whether you've made any late payments, the length of time you've had each account, your balance versus your available credit, the types of accounts you have, and then finally the number of new accounts. Okay, but what if I don't have any of those things?

Well, it's sort of a chicken and egg thing. How do you get credit if you don't have any? Well, you do that by opening, in most cases, a secured credit card. It has a credit limit equal to the amount of money you put into a designated savings account, and the bank then uses that as collateral. It will then allow you to make charges on the card up to that amount, that limit, if you will. You want to make one routine charge a month and then pay it off in full each month.

By the way, make sure it's a budgeted item. Make sure the card, though, is one where the bank reports your activity to the credit bureaus. That's usually the case with secured cards, but not always, and now you'd be starting to build a credit history. Okay, and we've talked about that one before.

Anything new on that front, however? Ways to build your credit when you have none? Yeah, you can also get something called a credit builder loan.

If you go to the website self.inc, that's I-N-C, they'll actually help you set it up. By the way, you can also get this type of loan from some banks and credit unions. You apply for and get the loan, usually the amount is from $300 to $1,000. When approved, you don't actually get the money. It's put into a CD and you make monthly payments that are reported to the credit bureaus, therefore building your credit history in the process. When the loan's paid off, you get the money you've paid into the CD plus a little interest minus the fee the bank charges.

So again, it works like a credit card that's secured, but for an installment loan and having both types of credit, both revolving and installment, would build a favorable credit history and score even faster. Well, that is a new one, a credit builder loan. Okay, let's come back and chat a little bit more about this and then we'll turn the corner as we say and take some calls from listeners today. Here's our phone number. By the way, all lines are open right now. Here's a great opportunity for you to call 800-525-7000 to speak with Rob West. I'm Steve Moore.

I may speak once or twice myself. Stick around. This is MoneyWise Live. Nice to have you with us today.

It's MoneyWise Live. We're having a great time. This time would be even better if you call. I mean, it's a call-in program. If we don't get calls, then we have to turn it into what, Rob?

What would we do if we don't get any calls? We'll talk about spring planting. It's been a long time since you've done a drum solo on the air, so we could pull that back out. You are a man after my own heart, sir. Thank you for remembering. Only your mom wants to hear a drum solo and she's not here today.

All right, 800-525-7000. We were talking about ways to increase your credit score, to even get a credit score if you're too young. Put a bow on this for us, Rob. Where do we want to go?

What do we want to remember? Well, I think as we talk about credit scores, remember the whole idea behind the credit score is we no longer operate in a society where somebody stays in place in one city for a generation and everything's based on a handshake. We want to be able to have instantaneous credit decisions for global transactions, so we reduced all of those relationships to a number. And that number simply indicates how likely you are to repay as agreed.

And of course, there's an algorithm that determines that that's probably guarded kind of like the Coca-Cola secret, although we do know the elements that make it up. Let me just mention one other idea. If you're trying to build credit and you don't want to use the secured credit card or the credit builder loan, or perhaps you have and you're just looking to add something else, you can become an authorized user on someone else's credit card. Usually that's a parent or some other family member. Just make sure that person has a solid credit score and you don't actually have to use the card as long as the primary owner uses it and makes regular on-time payments. You'll generally get the benefit of the good reporting on your report. The opposite is true though. If you become an authorized user for the wrong person that has bad credit, well that'll trickle down to you as well.

Here's the bottom line though. It takes time to establish a good credit rating, so you have to be patient. Just make sure you make all your payments on time. Eventually, lenders will be willing to extend you credit without it being secured.

Here's the key though. I don't care how good your credit score is, I don't want you to go into debt. And so if you can't exercise discipline, only use credit for budgeted items and pay it off in full, especially with those credit cards every month, then I wouldn't even go there.

But again, because the credit score is being used for so much more even than lending decisions, I think it's something important to be thinking about. Yeah, good point. Good point. Okay, well let's go to our phones. In fact, our first caller, Alex, I think has a comment on this very topic.

Alex, what do you have for us today, sir? No, it's actually a question and the question would be, and blessings by the way, the question would be, what is the average starting score for a person that is, say, they get their first credit card? So what do they start out? 200, 300, 400? No, you know, you would typically see, Alex, for somebody who's just starting out, your first score would range anywhere from, you know, under 500, but probably, you know, not as low as you're talking about, you know, upper 400s to 500 and up even into the 700s in some case, if there's no bad credit, especially because there are other factors including your income and employment and those types of things. So it can be quite a range in that roughly 500 on the low end to 700 on the high end. Typically, though, you're going to see numbers around the low 500s to the to the low 600s and the challenge there is, although you can get various types of loans, you know, you will struggle to get the most competitive rates. In fact, they won't be available to you if you're looking for something like a mortgage. That's why it's important to establish it early, be consistent as an on-time payer, keep those balances paid off so you're not pushing the utilization and you'll be surprised at how quickly it comes up. But the biggest factor that's going to be working against you is just the age of the accounts being so new that's obviously going to hurt you, you know, in the overall formula. As time passes, obviously, that score will continue to rise as you stay consistent in your payments. Alex, we appreciate that call and that question.

Thank you very much. Indianapolis, Indiana. Hello, Ben. What's on your mind today? I just had a, I'll preface my question with my wife and I are faithful tithers on the gross of our income. We're both employed and about a year ago I started a, we'll call it a side job, just making a little bit of extra money on the side and at the time it was right around Christmas time and we decided I got a little bit of extra income and we put it towards sending our Compassion International kiddo a Christmas present. And since then, we've kind of, the little, you know, the small little chunks here and there that we've gotten from the side gig, we've kind of put into an account called Giveaway Money and we give that away. We don't ever spend it on ourselves but as the business grows a little bit and that number changes a little bit, I'm just curious, is that biblical or do I need to be tithing on that? And then if we want to do additional things like, you know, send her a Christmas present, you know, that's more of an offering thing. I was just curious what you thought.

Yeah, it's a great question, Ben, and I think, you know, here's the bottom line underneath all of it is that we don't want to be legalistic around it. We want to give with a cheerful heart. We want to give as an act of worship. When we look to the New Testament, we see this idea of giving proportionately as God has prospered us, so I like the idea of systematic giving in proportion to our increase. Applying the principle of the tithe that we saw under the Mosaic Law is certainly a great starting point, giving off of your increase a tenth to the storehouse, which would most closely be related to the local church today.

I think that's a fabulous idea. And if you want to apply that principle, then basically what you would do is you'd say, what is my increase? And I would look at that as really anything that passes through your hands, with just a few exceptions, perhaps like an insurance payout that's making up for a loss that you had.

That's not actually an increase, it's a reimbursement for a loss. But anything else, and I would even put inheritance, social security in that, really God's provision in your life, then you would say, what is that increase? And then on the first fruits, meaning I think most closely related to the gross of that amount, we then give systematically, and you could start with the local church. So I think that's one way to approach it. Again, if you're applying the principle of the tithe, but at the end of the day, God wants your heart. It sounds like you're getting a lot of joy out of your giving. I think that's the ultimate objective. And between you and the Lord, how you decide to parse that out between your church and your compassion child and giving Christmas gifts to those that are in need, you know, with a side business, I think that's entirely up to you.

But, you know, the intent of the tithe is the full amount, a tenth on the increase, and I would look at all income sources, including your size business, as being a part of that equation. Do you follow that? Yep, I do. I appreciate it. Absolutely, Ben. We appreciate you listening, and thanks for your call, sir. Thanks, brother. God bless. Let's try to take one more quick one before the break.

Athens, Tennessee. Hello, Joy. How can we help you today? Hello. Thank you for my call, and I apologize it's not on your subject, but we have seven grandchildren, newborn to 11, and we recently retired within the last year, and just wanting to put money away for college.

What is the best option to do that? So, Joy, I'm just curious. It sounds like you all have plenty to do with newborn to 11-year-old grandkids. Are you busier now than you were when you were working?

Absolutely, and we don't know how, but yes, we are. I love it. I'm sure you're having a ball.

You know what? Here's my favorite tool for saving for college, Joy. It's called the 529 plan, and basically think about it like a Roth IRA, but for college-related expenses. You don't get a deduction when the money goes in. You can put in up to $15,000 a year per account. In some cases, you can even put in more than that, and when you do, the money will then grow tax-deferred or, excuse me, tax-free, so long as you pull the money out for qualified educational expenses. So, the money gets invested when it gets into the 529 among the various mutual funds inside that particular plan, and then as the money grows, obviously you don't pay taxes on it.

Then when you pull it out, there's some benefits. Number one is it's treated as an asset of the parent, which if for this particular child or any of them happen to be able to qualify for federal financial aid, it would impact them at a much lesser degree as an asset of the child versus an asset, excuse me, asset of the parent versus an asset of the child. The other thing, Joy, is that if one child didn't need all the money, you could transfer it to another, or if they got a scholarship or a grant, you can pull the money out on a pro rata basis without any tax implications. So, it's a great tool, and where I would head next is a website, savingforcollege.com. They have the best tool out there where you'd essentially submit the scenario, all the kids and the kids' ages and what state you're located in, and it would help you do some planning both in terms of how much to contribute, but also helping you determine which 529 plan.

Are you better off in the state of Tennessee, or are you better using another state's 529 plan because the performance is better, and it's going to look at the tax considerations as well as the overall investment performance looking back historically. So, I think that's the savings vehicle of choice. Does that make sense? Yes, it certainly does, and I appreciate your advice. Thank you very much. All right. Yes, ma'am. Thank you for calling. Thank you, Joy. Must be fun to have that many grandchildren. I have a few, and I love mine to death. All right, you're listening to MoneyWise Live.

He's Rob West. No grandchildren yet, but they'll be coming along a little bit later, I'm sure. I'm Steve Moore, and we'd love to hear from you. 800-525-7000. When we come back, we'll say hi to James in Ohio. James, if you're listening, don't go anywhere. We'll be right back. This is MoneyWise Live.

In 1 Corinthians, we read, all things are lawful to me, but not all things are profitable. This is MoneyWise Live with Rob West. I'm Steve Moore. We're taking your calls today about anything financial, no specific topics, so anything financial that you may be wondering about or struggling with or wondering if God's Word actually addresses it, let's look into that together. 800-525-7000.

Spokane, Washington. Hi, Ed. Thanks for holding, sir. How can we help you? Well, thank you for taking my call, first of all. Sure. Actually, my question is not so much a counseling question as it is an informational question.

I just need some information. And that's this. My credit score is quite high.

It's in the mid-800s. And that's because I've been out of debt for 30 years, my home, my car, everything. But I do have credit card debt that I pay off every month, in full.

When I ask this question, no one can give me an answer, and that is this. Over the last year, my credit score has gone down by 19 points, and nothing has changed other than the fact I have more assets than I had a year ago. No debt, nothing has changed. Ed, are you losing sleep over these 19 points, buddy? Well, no, but I'm a financial planner, and I kind of wonder, how could it be any different? And so I ask, no, no, I'm not losing sleep.

No, God has taught me very well that I'm to be a steward of everything that he gives me. And I wonder, well, how could I have been any different over the last year for it to go down? And I don't know. No one can give me an answer. Well, I've got the answer for you, Ed. You've come to the right place. Now, here's the thing.

A couple of things. Number one is, keep in mind, you probably charge of varying amounts, unless it's just one consistent charge that you have on this credit card that you pay off every month. If you're just using it for various expenses throughout the month and then you pay it down, you invariably have some months where you charge more and some months where you charge less, right? Absolutely. I mean, it varies by several thousand, but every month I pay it off in full.

Sure. But what's being reported is not that zero balance. What's being reported is the balance during the month when the payment is due before the payment hits. And so that's causing your credit utilization to vary slightly, but it still varies from month to month because at any given time it's reflecting the balance prior to you making that payment and being reported as on time. The other thing that's going on here, Ed, is keep in mind this is not a static formula that determines these credit scores. The algorithm is always changing, right? They're tweaking it and changing it and they may highlight one particular aspect of it that was to a lesser degree in the past and now it's a bigger part of the equation and so it tweaks it. And so you're going to see these kinds of changes as the credit scoring formulas change.

You know, among the FICO score there's been several different versions of it and even then, depending upon which, you know, institution is actually pulling it, they may look to one over another in terms of the versions of those algorithms that are being applied for the score to be generated. Bottom line is I'm not surprised. You may find that in the next 12 months it's 19 points higher than where it was, you know, before this started and that's just going to be a change in some of the variations that occur along the way. But the bottom line is I wouldn't be concerned about it.

I know you said you're not and I certainly can appreciate that. You're going to qualify, if you ever wanted to borrow anything, and I suspect you probably won't, you're going to qualify for the very best, most competitive rates and terms and so this is never going to work against you, always in your favor because you're up sky high above 800. But I think, you know, at the end of the day trying to figure out exactly why the score that you get is generated is a losing proposition because nobody knows what goes into the finer points of that algorithm behind the scenes. Ed, we're glad that you got through. You're the kind of financial planner we want.

Someone who really dives into the numbers. You lose sleep. You can't drive. You have to pull over. It's those 19 points.

What on earth is going on? If you live in Spokane, call Ed. Right. Call Ed.

Yeah. God bless you, Ed. We appreciate that. This is MoneyWise Live. We'll be back live to take some more calls right after this. Welcome back to MoneyWise where we do our best to find God's plan for your financial life according to his principles. Give us a call if you'd like. 800-525-7000.

Hartville, Ohio. Hello, James. Welcome to the program and what's on your mind? Hey, thanks. I appreciate you guys' show. Sure.

I have a question. I have an employee sponsored retirement plan. I can either put money in a traditional IRA or a Roth IRA and we started fostering and adopting several years ago.

And we've had three adoptions and most likely another one this year. And with our deductions and credits, basically I've filed tax exempt because I was getting too much money back. So I consulted with our accountant and I've filed exempt.

So again, this year and probably next year. My question, I've been putting in mostly into traditional. Should I take advantage of the Roth? And I'm not sure where the tax, do I get that back at the end of the year then with my credits? I just wondered if I should be investing more in the Roth now that I am the tax exempt status first for maybe a couple of years. Yeah.

Yeah. I think that makes a lot of sense, James, because obviously with the traditional, you're getting the tax break now, but that tax bill is going to have to be paid later as income. And so you'll pay income tax as you pull that money out. Whereas the Roth, you don't get the benefit, but you're getting benefits on tax deductions in other places. And so to be able to maximize that opportunity to put it in now on an after tax basis and then let it grow between now and retirement, and then be able to access those funds without a required minimum distribution and with no tax to be paid on all of the gains between now and then is a wonderful opportunity. And so you're getting the best of both worlds.

You're not necessarily foregoing the tax breaks because they're coming from other sources and you're still getting this money working for you on a tax free basis as it continues to grow. So I think that would be the logical choice for you moving forward. Okay, James, that makes sense. I appreciate it. Yeah.

Sorry. No, I was wondering if that worked for you. Sounds like it did. Did you have a follow-up?

I did. I was just wondering, so these children are younger, between six and one years old right now. And I know the 529 is the go-to for planning, but do you have information?

I don't know. I just heard last week, I think it was that adopted children are able to get a lot more scholarships or even paid tuition for colleges. Is that, do you have any information on that? You know, not specific, but I will tell you, there are all kinds of scholarships and grants for specific people, whether that's, you know, special attributes or, you know, nationality or particular skills or a degree you're seeking. There are scholarships for just about everything. And I would absolutely concur that there are specific scholarships for adopted foster and orphan children going off to school.

So I think looking into that with intentionality makes a lot of sense. I will tell you, my wife grew up in a single-parent home. Her mom made it very clear she needed to pay for college. She got over a hundred thousand dollars in scholarships.

Now, it wasn't without a ton of work. They turned their living room into a scholarship application factory. They did the research, they applied for every scholarship under the sun, and she was rewarded very, very well and graduated completely debt-free. So I think absolutely I would look into this. Amazon has some wonderful resources, some books that you could order on this topic.

Look for the ones that are the most highly rated from the readers and specifically search out scholarships in this category. James, we wish you and your children the very best as you go forward. Thank you very much. Winchester, Indiana. Hi, Randy.

What's on your mind today? Hi, I am pastor of church and so wanted to build some of my retirement fund and I purchased a house for seven thousand dollars to remodel. Took me about three years to remodel it. Have about thirty thousand in debt on it. And the electric company is going to purchase it for me to put a new substation in. And so my question is, they're also giving me some on it to help on the capital gains tax, but is there a way to avoid the capital gains tax? Well, are you looking to stay in the rental property business, Randy? Yes, I've got three other rentals at this time.

Yeah, okay. Well, I think the I think the question would just be whether you want to look at a 1031 exchange. The only reason perhaps you wouldn't is if you want to go ahead and have them pay the capital gains. Now, even if you roll it into a new property, they may be willing to still give you whatever portion of the capital gains offset they were going to give you in the form of additional purchase price. So it may not be of any concern to them whether you push it forward.

So I think the best of both worlds would be step one, make sure they're pairing you a fair amount. So get, you know, either a broker's price on it where you'd contact a real estate broker and have them offer a professional opinion on what it's worth or get it appraised just to make sure that they are, in fact, giving you at least fair market value if not paying a premium for it. And then go ahead and get in writing whatever they're willing to pay for the capital gains offset. You then get all of that. And then as long as you select another property in 45 days and close within 180 on a similar type property, and there's a pretty liberal definition for what similar property type is as long as it's an investment property, then you can, in a sense, push that capital gains bill forward, keep a hundred percent of the proceeds working for you. And at some point down the road, you'll have to pay the capital gains on it. You just wouldn't have to recognize that right now. Does that make sense? I think so.

And what's it called? A what number? A 1031 exchange is where you, 1031, and you'd want to work with somebody who has some experience in this area to help you make sure everything's done properly. So work with a tax professional who can help you identify that property in the proper window. Make sure you close in the proper window and make sure that it's handled from an IRS reporting standpoint properly. But that's going to push it forward.

It doesn't mean you still can't get paid by the county or whoever is making the purchase for both the fair market value plus whatever capital gains offset they're willing to give you. They're paying me well. We've agreed to a good sum. Great. Great. I suspect that's true. Congratulations.

That sounds like a win-win all the way around. God bless, Randy. Thanks. Have a good Sunday coming up, sir. Rob, quick emails from Billy. This is a little different. Is it okay to buy lottery tickets if I promise God to give even more than a tithe if I win?

Yeah, Billy, I appreciate the question. You know, remember, God doesn't need our money. He wants our hearts. And I don't think he would encourage you to violate biblical principles. You won't find the word lottery in the Bible, but the principle is that we should be steady plotters, not hasty speculators. That's pretty clear in the Bible, and I would put the lottery ticket in the hasty speculation category. So regardless of your promise and your intent on what you'll do with the money, I think violating the principle in the first place, when again, God is not looking for money.

He's looking for our hearts to be aligned with him and to really lean into and follow his principles and his word, then I would stay away. Randy, we appreciate that. Thanks, buddy. And if you have a question for Rob that you'd like to send, if you'd like to email it rather than call in, that'd be great. The address is questions at MoneyWise.org, questions at MoneyWise.org. When we come back, we want to tell you a little bit about the MoneyWise app. It's something that Rob and the crew have been working on for a long time.

We think it's world-class. And if you'd like to find a high-tech way of addressing the old-fashioned envelope budgeting method, this is exactly what you need. And we'll come back and tell you some more about that and take some calls right after this. And as I was saying, we're really excited about the new MoneyWise app that's a biblical and digital approach to managing your money, basically budgeting, saving, spending, record-keeping. It automatically connects to all of your bank accounts if you wanted to, and there's even a part of it, Rob, a community part, right, where you can actually interface and talk with other people if you choose to. You're not sharing your financial information, obviously, and you hang out there once in a while. That's a little scary.

That's exactly right. Yeah, it's the MoneyWise app. It's the best digital envelope system I've ever used.

Download your transactions, automatically categorize them into your envelopes, have it in the palm of your hand, share it with your spouse, know exactly where you stand in every envelope at any given time. And yes, a community section where you can share ideas, ask questions, get tips, and I weigh in there sometimes on your questions. We're also introducing, and you could go and download it now so you'll be the first to know, in the next two weeks we're introducing a brand new Discover tab. Here's what we've done. We've gone out to the best content providers all across the biblical finance space. So think Compass, National Christian Foundation, Gospel Patrons, Generous Giving, all of the best of the best. We've brought them all together. All of their content is going to feed into our app in the Discover tab, and so you'll be able to go to one place, the premiere destination, to get all the best content related to God's heart as you manage his money. And we're so excited about it. It's all rolling out in the next two weeks.

So if you download the app now in your app store, the Apple App Store or the Google Play Store, you'll be ready when we introduce this new section to the app to get all that great content. And if you are in the community section when Rob happens to log on and you want to talk basketball, that's the way to get his attention. That's right. Throw that out there. Okay.

Skokie, Illinois. Hey, Karen, thanks so much for holding. We know you've been out there for a bit. How can we help you? You've got an interesting question, huh? Oh yes, I'm wondering if you can explain what happened with GameStop and hedge funds.

Maybe explain the concept of them. Yeah, absolutely. You know, this GameStop frenzy has been unbelievable. And basically what happened is a very large group of young day traders have basically squared off against the Wall Street establishment. They're using something called Reddit and a particular page in Reddit, which is kind of like a social media platform, if you will, a discussion board. The page is called Wall Street Bets. And basically, they've been identifying troubled companies that are targets of hedge hedge funds that are short selling it, meaning they were essentially saying that the stock was going to decrease. So they were shorting the stock. So as the stock declined, they make money.

These were the professional traders. Well, the reason that this particular company is out of favor is they operate brick and mortar companies or shops that sell video games, physical video games. The problem is brick and mortar is losing popularity.

But bigger than that, video games now are mostly downloaded, not put in on a disk. And so this company has been heading down for a long time. Well, they got behind it and basically started buying the stocks. These youngsters started coming in there and just buying big time. And it caused the hedge fund shorts to have to cover. So when they do, that means they have to start buying to cover their positions. And like my dad used to say, when when he was a professional money manager, if there's more buyers and sellers, stocks going up, and this stock went up big time. In fact, last check, it was up, I believe 400% on the week. Now, it's been fascinating to kind of watch because there's been a lot of things moving at the SEC and with the particular trading platforms. There's actually today announced a class action lawsuit against Robinhood, one of the more popular platforms for trading among millennials, they're limiting your ability to buy the stock. In fact, today they place a restriction, I understand where you could only buy one share of either any of these companies. And the traders are not happy about it.

Where is this going to end? Well, the thinking goes that, you know, the GameStop shares will stop climbing either because most of the short positions have given up and are no longer forced into buying the stock to cover their losing positions, or because of the brokers or the U.S. market regulators intervening. And then as the stock starts falling, human nature is going to kick in because these retail investors will watch their paper profits that they've gotten.

Remember, I said up 400% this week. They'll watch those paper profits start to evaporate and the natural impulse will be they're going to start selling, selling, selling. And this bubble, which is exactly what it is, is going to pop and there's going to be a lot of people that lose money. So here's the bottom line.

Don't violate biblical principles because you get caught up in something that seems to be working when in fact it never works. We've seen this happen time and time again and there will be a lot of people that lose a lot of money. Karen, great question. We know it's been in the headlines a lot.

It seems kind of cool, kind of neat, kind of fun. We could all become billionaires overnight. Not likely to happen for most people, but we hope you appreciate Rob's assessment of that and we're glad that you called today. Thanks very much. Boca Raton, Florida. Hello, Debbie. How can we help?

Hi. I have about $15,000 to $20,000 sitting in a checking account and I know that's horrible, but it needs to stay liquid. I'm 71 and I'm self-employed and I actually was thinking that, you know, because it's in my checking account, I don't pay a monthly fee. So I'm trying to figure out, does it even make sense to move it out of there because the minute I do, they're going to start charging me for my monthly checking account. So I'm just in a quandary about it. I don't really know what to do.

Yeah, it's a great question, Debbie. And what I would recommend is that you look at perhaps an online savings account. So you could look at something like Marcus or Capital One 360 or Ally Bank. These are FDIC insured banks. They're online banks, but they still have the FDIC insurance. And the benefit is they'll pay about a half a percent a year.

Now, what is a half a percent on $20,000? Well, that's only $100. So you're going to want to make sure that the fee that gets imposed on your checking account is less than $100 a year.

If it's not, you're actually better off there. But I might start looking for another option for checking as well because you should be able to find a fee-free checking option unless you have some particular affinity to this bank, either because of where the banks are located or the ATMs, that kind of thing. But if, in fact, it's less than $100 a year, or you move to something that's free, then that online savings account is going to do a couple of things for you. It'll allow you to earn a little bit of interest, not much, a half a point, but a little bit. And it's going to get it out of your checking account, which I think is a better approach because when it's sitting there and checking, it's a little easier to spend it. Whereas if it was in an online savings account, even though it's linked and you could electronically move the money for free in two to three days through the ACH transfer system, it still takes the transfer, which means it's a little harder to get to and that's not a bad thing. So I think I would evaluate the fee side.

You're right to look at that and then compare that to these other online savings accounts as another option. Debbie, God bless you. Thank you so much for calling in today. Let's see, one more before we put a bow on it today. Tampa, Florida, and Roberta, do you have a question?

Yes, I do. Basically, my husband is no longer able to work due to medical issues, so we've been struggling. I love the job that I'm at, and I know God has always provided, but as it is, it would probably take me five years before I'm not completely struggling. I have an opportunity, because of the COVID crisis actually, to take a different job.

I'd have to travel, though, and it would double my income. I've been getting mixed messages from a biblical standpoint. What's the right thing to do?

Yeah, yeah. Well, as you evaluate this, there's obviously the financial side, Roberta, and then there's the non-financial side. So as you look at that, obviously, the non-financial side, I think you need to begin with and just say, what are the implications of that? What is it that you feel like, you know, taking this new job would mean for you and your husband and your family? It means that I wouldn't always be there, and I may have to travel out of state, most likely would have to travel back and forth out of state. Yeah, and do you have a sense of how often you'd be gone?

How many nights a week? Have you gotten to that level of understanding? Oh yes, I would probably be gone majority of the time and may be able to come back one or two weekends a month, depending. Yeah, yeah. And obviously, that would be really challenging, I'm sure, you know, on you, on the family.

Yes. Are you able to make, have you really done a deep dive into the budget based on your current income, just in terms of what might be able to be tweaked on a temporary basis, what expenses you can eliminate, what assets you could sell, just to kind of weather this storm until your husband finds work? Yes, I have, and I don't know that's going to be possible because one thing is I'm not sure if he's going to be able to work anymore. Oh, okay, very good. And how short are you on a monthly basis? When you run that budget and you look at kind of where you're at with just your income only, what kind of shortfall do we have?

With just my income, I can barely survive now, but when I have to start paying student loans and mortgage again, I'll be about $2,000 a month short. Wow, okay, yeah, I understand. And when is that? How far away is that period of time?

It depends between, sometime between March and June. Yeah, okay, very good. Well, here's the thing, you know, the Bible is not, it doesn't have any specific career advice. What you need to look at is, you know, at the end of the day, you need to live within God's provision, and so I think you all need to come back together on your knees saying, Lord, give us wisdom here, James 1-5.

If we lack wisdom, we should ask God and he'll give it to us, and that's step number one. I'm sure you've already done that, but let's continue to do that. Next step is to say, you know, Lord, we're going to just trust you, you're going to provide something right here, and then start really going after it and seeing if something else doesn't come available. And then at the other side of the equation is, what long-term changes could we make in our spending that are hard decisions, and are we willing to do that to right-size the budget?

Do we need to sell the house? You know, are there things we need to do so you can still be there, plugged into the family, not gone all the time, and cover your bills? And then I think, you know, compare this option, which is, you know, certainly a blessing to all of that, and let's see if the Lord will give you some wisdom on where you go from here. Hang on the line. Let's talk some more. Thank you, Roberta. Stay with us. This is MoneyWise Live. Thanks for listening. We're a partnership between Moody Radio and MoneyWise Media.