Steps to Saving Money

This is Doug Hastings, Vice President of Moody Radio, and we're thankful for support from our listeners and businesses like United Faith Mortgage.

Let's call it the couch cushion dash. This is the moment when you need a tip for the pizza man, a few bucks for your kid's lunch, or you can't say no to the sweet eight-year-old and her Thin Mints. But you've got no cash and no other options but to tear apart the house searching for hidden money. It's Ryan from United Faith Mortgage, and it's funny how we can usually find a way to scrounge together a few bucks hidden around our house. Shame on you if it's from your kid's piggy banks. For many listeners though, there's enough money sitting inside your home to buy a swimming pool full of Thin Mints. Home values have gone up across the country the last few years, leaving many of us with a good chunk of equity tucked inside our homes that we could cash out to use for life.

If you'd like us to help, we are United Faith Mortgage. When you think about it, shouldn't saving money be easy? After all, isn't it just the practice of not doing something, namely spending? Well, if it were only that simple. Hi, I'm Rob West. The real challenge to saving, of course, is overcoming the temptation to spend money. But there are steps you can take to make it easier, and I'll talk about those first today. Then it's on to your calls and questions at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, where God's principles inform our every financial decision. So a recent bank rate survey showed that only 40% of Americans had enough cash in their bank accounts to cover an unexpected expense of $1,000.

Considering the range of financial calamities that can strike when we least expect it, it's no wonder so many people go into debt using credit cards to cover money emergencies. It's also no wonder that the Bible tells us that saving is wise. In Proverbs 10, we find lazy hands make for poverty, but diligent hands bring wealth.

He who gathers crops in summer is a prudent son. And while it's wise to save, we also have to be careful not to put too much trust in our bank accounts, because it can never replace our ultimate trust in God as our source and our provider. And there's good reason to trust the Lord. Luke 12-24 reads, God has his part in our provision, and we have ours.

We're to save because his word tells us to. And if you think you can't save because the temptation to spend is too great, take comfort in 1 Corinthians 10-13. It says, Why then is it so hard for some people to save money?

Well, for some, it can't be avoided. There are people whose income is far lower than their outgo, basically those below the poverty level. And while that's a real concern and not one to be taken lightly, most people we hear from make enough money to save.

In their case, self-discipline is the main issue. It comes down to living within your means. You see, God wants our lives to be in balance. He wants us to enjoy his bounty and provision. But Christians are also supposed to take care of their families and come to the aid of others in the church from time to time who may have needs. That's difficult to do if you have no savings. Remember, everything you have belongs to God, not just what you put in the offering plate.

All that we have comes from him and belongs to him. We're supposed to be qualified managers to handle it. So here are some steps you can take to start in that process. First, of course, you need a plan.

Without one, you're just spinning your wheels with no idea where you're headed or when you'll get there. Your plan should reflect your values and priorities. Be specific and make sure you connect meaning to the money you save.

You see, the sacrifice it requires will be difficult unless the goal is something that's meaningful to you. Now, all savings should begin with your emergency fund. I'd start with a goal of $1,500, then one month's living expenses. Keep building on that until you have three to six months saved up. After that, your savings goals can change to things like buying your first home, taking a trip to build family memories, or giving to your favorite ministry. The next step is realizing that you can't go it alone. If you're married, you'll never be able to save if your spouse isn't on board.

It has to be a team effort. So the goals we talked about make sure they're common goals and celebrate milestones of progress along the way, always within your budget, of course. Initially, you have to cut spending in some areas. You won't be able to save if you maintain your current lifestyle. So look for things you can cut from the budget. At the same time, don't try to do it all at once. Establishing savings doesn't mean you have to live on beans and water for every meal.

If it hurts too much, you'll never stick with it. So be realistic as you cut your spending. Next, make a resolution that you'll save something from every paycheck. In the beginning, establishing that habit is more important than reaching the ultimate goal. You want to develop the discipline of saving. As time goes on and you're successfully putting something away each payday, you can begin to increase your savings. The last step involves prayer.

Lots of it. Pray earnestly that God will give you self-control and a contented heart. Developing the habit of saving will dramatically improve your life, your relationships, and your ability to be used by the Lord. All right, your calls are next. 800-525-7000. I'm Rob West. You're listening to MoneyWise Live, where God's financial principles inform our every decision. Thanks for being with us today on MoneyWise Live.

I'm Rob West. We'll be taking your calls and questions on anything financial in just a moment. Here's the number. We do have lines open. 800-525-7000.

That's 800-525-7000. You know, we started today by talking about saving. How do we break through perhaps what's been holding us back from setting aside a portion of God's provision today for the future, for tomorrow? Looking down the road, recognizing that Proverbs is replete with encouragement that says, well, there's precious oil in the house of the wise, but the foolish man swallows it up.

God gives us more today than we are to live on today in most cases. Now, you may be in a desperate financial situation, and you're just trying to keep food on the table, and if there's utilities, keep them on, and I get that. But for most of the people in the listening audience right now, and we all find ourselves in different seasons, we have the ability to save.

But what do we need to do to actually dial back our spending so we can live within our means? And I think this idea of connecting meaning to our money, to God's money, is really key, because you see, when we start with our values, what's most important to us as an individual or as a married couple, and then allow those values to inform our goals. That then leads to short-term sacrifice so we can save in a way that actually has some meaning to it. You see, when our goals actually flow from our values, that which is most important to us, where God is leading us in the future, then short-term sacrifice is much easier because we have a why.

And when we do this as husband and wife, then money can actually become an instrument of peace in the marriage, not discord, and perhaps you'll finally be on the same page, working toward a common goal, and money then is the tool to accomplish it. So what's most important to you? Is it to be able to give to those in need around you? Well, dialing back your spending now, sacrificing in the short term, will allow you to build up resources to do that. Is it providing for your families in ways you haven't been able to, or creating memories together by traveling or doing things that are enjoyable? Maybe it's providing an education. Whatever it is, think about the values that then lead to goals so that when we begin to sacrifice and cut expenses, we know why we're doing it.

And at that point, it does become a lot easier. Give it a try and let us know how it goes along the way. All right, we want to get to your calls today. We're going to ask you what God's doing in your life financially, look at those issues and questions in light of Scripture, and see if we can move forward together. Here's the number, 800-525-7000. That's 800-525-7000.

We're going to start in the beautiful state of Montana. Mark, thank you for your call today. How can I help you, sir?

Hey, Rob. First, I just want to thank you for your faithfulness in following God's call in your life. You're blessing a lot of people and you're blessing His Kingdom, so thank you. Well, thank you, Mark. That's very kind of you. So to start right off, my mom went home to be with the Lord in April, and it's very sad, but also I can celebrate because I know where she's at and I know that I will see her again.

So with that, the financial end of things, we're working our way to that. But she gave me a wonderful gift. She left me 20 acres with a small house on it, and it's just outside of this popular ski resort town here in Montana. So I understand that this is a gift from God and from my mom, and I want to manage it properly. I want to use it for His Kingdom. I want to do the wisest thing I can with it. It's a huge responsibility for me, and I have a few concerns.

I'm concerned that possibly we're in some sort of real estate bubble, inflation and everything, and I'm wondering, I'm considering selling it to reinvest it elsewhere, or whether I should start plans to develop a plan to generate income on the property, or exactly what I should do with it, because it is worth a substantial amount. Yeah. Well, I can imagine it is. Does it happen to be near Big Sky, or is it a different ski resort? Yeah, a different ski resort, but very, very similar.

Okay, very good. Well, some good friends and I used to make an annual trip out to Big Sky. We haven't done it in several years, but it is beautiful country, so I can only imagine how special this is, and I'm so sorry to hear of your mom's passing, but I share your celebration in the hope of heaven and rejoicing that she's with Jesus, even though I know she is sorely missed. And I appreciate the responsibility, Mark, with which you're approaching this gift, because you are now the steward of these resources. It's always belonged to the Lord. It still belongs to the Lord, but the stewardship responsibility has passed from your mom to you, and you want to be found faithful in that. You've made it clear you want to do the wise thing with regard to the financial side, but you also want to honor the Lord and build the kingdom, and those are all the right goals.

And so I think, you know, you're certainly approaching this in the right way, getting wise counsel, but also making sure that you're real prayerful about this. You know, I always like to start by just saying, you know, this is an asset, so let's not focus on what type of asset it is at the moment, but let's say as an asset that you're now charged to manage, how does this fit into your overall financial plan? I mean, do you see this as a key piece of what will ultimately allow you to retire someday when you can no longer work and be a funding source of lifestyle?

Is it something that you want to do some giving out of or a combination of the two? Is it to generate an income, as you said, now, to supplement other income sources? Give me a sense of how it fits financially into your overall picture.

You bet. So I run my own small business. I have for about 10 years, and I am debt-free except for my personal residence, but I really don't have any retirement to speak of. I put everything into my business, and I'm working a lot. I'm working, you know, 70 hours a week is a standard week for me. So I'm looking at this as in that with what I make, I make about $70,000 a year.

If I had this amount of money that the value of the home and the land is worth in the bank, would I go and buy a trophy piece of property in a resort town? And, you know, the answer is no, that I'm not in a position to do that. So I'm kind of looking at this and saying, okay, how can I make this grow for my children, my children's children? And maybe I can back off my work a little bit and get down to 50 hours a week in the process, too. Well, I would certainly encourage you, especially if you have children, but just for your own health, working 70 hours, that's a lot of hours you're logging every week. And so being able to back off and take a breath and ask the Lord what He has for you, just to get some more rest in your life and some other disciplines, I think is always a good thing.

And I'm talking to myself at the same time. You know, I think as you approach this, Mark, really, you know, we need to determine is this something we want to be income generating now or in the future or both? Do we want to try to retire debt? And what kind of giving do we want to do out of it? Obviously, the first question, you know, that really a lot of this hinges on is do you want to sell this property that you've acquired? And I'm not going to be able to give you an answer to that. You're going to need to get some wise counsel on that with regard to, yes, nationally, the real estate market is, you know, sky high. And, you know, this is probably not just a typical piece of property, as I'm hearing you describing it, it's 20 acres, small piece of small improvement, a home near a ski resort.

So it's a little unique. And so you're going to need to get somebody who really understands this market, who can help you understand. And you probably have a good sense of this already. How is this market done for this particular type of land and its specific location? What are the prospects for the future? But just generally speaking, you know, home values nationally are about five and a half percent overvalued right now, indicating we're not really in a bubble and that the reason for that is the actual demand for housing is very high.

Inventory is very low. So it's a supply and demand issue. Millennials are trying to move out of urban areas into suburbia and beyond. And so, you know, what most folks expect is not any kind of housing bubble like we saw in 08-09 that was real systemic in nature in terms of its problem. More of a cooling off, a tapering off because these growth rates are not sustainable.

And we may see, especially in certain pockets of the country, a dip, but probably not any kind of major collapse. What about land values? Well, a slightly different asset that would need to be considered.

And again, I think that's where getting some wise counsel makes sense. So that'd be as to whether or not to sell it. The second thing is diversification. Ecclesiastes talks a lot about diversification. You are obviously highly concentrated in this particular parcel of land, which is one asset class, but it's also in one specific location. Whereas if you were to liquidate it and invest it in marketable securities, some combination of stocks and bonds and maybe some real estate investment trusts, things like that, you could be very highly diversified. And so I think that's something to consider. You're not putting all of your eggs in one basket in terms of the performance of real estate in a very specific location in Montana.

Thirdly, I think, is just looking at this in terms of the income that it can generate and what it's going to take in terms of effort on your part to generate that. So you could be very passive in terms of the income it generates or the growth that you experience through a stock and bond portfolio versus active participation where you're actually, as you said, are you constructing new residences on this parcel that you're then going to rent out? Well, now all of a sudden you've gone from a small business owner working 70 hours a week to I don't know what as you get really hands on in running a real estate business with rentals. So I think you've got to think through, pray through all of that. I'd start with that real estate professional who really knows the area and can counsel with you.

And I suspect, given the goals that I'm hearing from you, going ahead and selling it, enjoying the fact that real estate prices are very high, and then redeploying that into a stock and bond portfolio makes sense. We're going to pause for a brief break, though. We'll be back with much more on MoneyWise Live. Stay with us. We're so glad you've joined us today on MoneyWise Live. We've got some phone lines open, taking your calls and questions on anything financial, looking at your issues and questions from a biblical perspective.

Here's the number 800-525-7000. Just before the break, we were talking to Mark in Montana. His mom passed away in April and left him a piece of property near a ski resort in Montana, 20 acres plus a small home on it. And he's just wanting to know, through a biblical lens and really in light of his goals and objectives, what's the best path forward? Does he sell it? Does he keep it?

Does he improve it? And before the break, Mark, I was sharing my thoughts on that in terms of getting some counsel, just this issue of diversification, because right now, all of your eggs, so to speak, are in one basket. Give me your thoughts on just what I was sharing, and let's see if we can come up with a game plan on where you go from here. Absolutely. Thank you. I really like the idea of diversifying, you know, because as I said, this is my retirement. Everything else is in my business, which, you know, my business is just me.

So it's really not worth a lot. So this is it. I want to grow this for the kingdom. And, you know, of course, I'm a tither, so right off the top, 10% of everything I make is going to go right back to the Lord and to his kingdom. After that, I do have two children that are special needs that are probably going to need my help the rest of their life. So I'd like to take care of them. And I just feel like diversification and creating a portfolio that is going to grow, and maybe I can take a little bit of income to offset the amount of hours that I'm working in the meantime, but continue to grow that portfolio.

I think that would be great. Yeah, I think that's the right approach. And the only reason I say let's make sure you talk to a professional there is I just wouldn't want you to overlook something that, you know, you and I might not be aware of.

Is there a major development coming in that's going to, you know, be a game changer in that specific locale in a very short period of time or something on the horizon that alters whether or not this is the right time. But apart from something just glaring, I think that's wise counsel and wise thinking in terms of you going ahead and selling it, moving toward a portfolio that makes sense. Perhaps you pay off your home first, you know, and then begin to invest it in a way that's going to generate some income or at least have some appreciation while you're continuing to work and then have, you know, resources there for your future. You may even want to consider a special needs trust where these assets go in there and can be available for lifelong dependents where you can give certain stipulations as to how the money is used even, you know, beyond your life or if you were incapacitated for the benefit of the kids. And so looking at that from an estate planning standpoint with an attorney, I think would be really important. And then the last thing I would say, Mark, is perhaps talking to our friends at the National Christian Foundation, ncfgiving.com, you may want to consider giving a portion, just even a small portion of this land away to a donor advised fund prior to the sale, you know, for giving purposes. Now, because of the stepped up basis, it may not make sense or be necessary because there shouldn't be much in the way of tax here, if any. But at least just thinking about what's the best way to do your giving, given that you're going to have a major transition here and a sale of a pretty significant asset, it's worth a conversation.

So I think you're on the right track, my friend, seek out some wise counsel, perhaps a certified kingdom advisor to navigate this with you. And we appreciate your call today very much and wish you the very, very best. This is MoneyWiseLive taking your calls and questions. We've got a few lines open, 800-525-7000.

We're going to head to Greenwood, Indiana. Valerie, thank you for your patience. How can I help you today? Hi, I have a car. I just retired in January, and I have a car payment.

I've already paid off two vehicles. My husband passed away. I'm sorry. But thanks for taking my call.

I couldn't believe just my first time I got it. Anyway, $420 a month. Let's do this. I want to make sure we give you plenty of time to voice your question, Valerie. I apologize. We've got just a moment left.

I'm going to ask you to hold the line. And when we come back from this break, we'll dive into your question and get you an answer. This is MoneyWiseLive, where God's Word intersects with your financial decisions.

Stay with us. Much more to come just around the corner. Thanks for joining us today on MoneyWiseLive, where God's Word intersects with your financial life. Just before the break, we heard from Valerie. And Valerie, I understand you've been paying off some cars.

Great work at that. I'm sure that means you've been really limiting your lifestyle and trying to save as much as you can to pay off debt. You said you had $13,000 in your emergency fund.

And what is your question about your next move? Well, I have one more vehicle to get paid off. My husband and I used to have horrible credit. So I'm working really so this loan has huge, just like 17 percent interest. I took the loan out for like six years. I still have two more years to pay for it. Anyway, what I'm wondering is, should I take my money from my emergency account and pay off the car?

Or should I keep paying the payments? Sure. How much is left on the car? About $7,000. About $7,000. Okay. And how much do you have in your emergency? Did you say $13,000? Yeah, about $13,000. Okay.

All right. And what are your total expenses in a 30-day period, over one month, roughly? About $3,000.

Okay. So if you were to pay off the car, you'd have $6,000 left. You'd have two months' worth of expenses still in the bank. How much margin would you have every month over and above your expenses once the car is paid off? Are you right up to the edge and so you'd only have the equivalent of that car payment? Or do you have a little bit extra every month?

No, there's not much extra. I retired in January and I'm thinking I'm kind of bored anyway. I might go back and work part-time to make enough money to spend.

Okay. Well, I would probably not pay it off right yet. Just because what I'm hearing is that you've got two months' expenses, but there's not a whole lot left over. If you can fit the car payment into the budget, I'd prefer you maybe accelerate this car payment, but I'd want you to hang on to at least three months' expenses.

So that's going to be, let's say, $9,000. So perhaps you take $4,000 of it and pay against the car, leaving three, and then add a little bit more to every payment. And let's try to shorten that payback period, but I don't want to get you in a situation where you're living right up to the edge every month and you've only got two months' expenses, and then something major comes out of left field. So I think if you were to do either hang on to all of your money and then let's just add something every month, and that's going to require that you go back to that spending plan and either increase income, as you said, by going back to work, or decrease expenses by really getting focused on what can you cut back on. And then when you do that, the goal would be to free up margin to add to that monthly payment every month.

So I think that's going to be a better option than you just kind of wiping that out and being left with not enough in the way of reserves. Does that make sense, though, to you, Valerie? Yes, it does. Thank you so much. You are so welcome. Listen, congratulations on the hard work you've been doing, and we appreciate your call today very much.

To Indianapolis, Indiana, Renee, thank you for your patience. How can I help you? Hi, thanks for your time and your expertise.

I appreciate it. I have more retirement accounts than I would like to have. I had two jobs concurrently for quite some time, and each one has two accounts associated with it. One of them is pensions, and so I cannot roll that over, but I have these three other accounts, not a huge amount of money in any of them, but I cannot contribute to them any longer.

I have a new job with a new 401k, and I also have a Roth, and the fees are low on the accounts, but I don't know what I need to consider in determining whether or not I roll them over. Okay, so give me a rundown quickly of the account types that you have. One is a 403b, and it probably has 80,000 in it, and then the two from the other job, it was a faculty position, and I think, I'm not entirely sure, but I think one's a 401k, the other one was a maritime, but they were run through through fidelity, you know, company, but I don't know exactly the type.

Okay, no problem. So with the 403bs and 401ks, yeah, once you separate from service, you can roll those out. I would absolutely consolidate those into one IRA, one traditional IRA. That's going to just create some simplicity, it's less accounts for you to keep up with, it's going to be a little easier for it to be managed either by you or someone else, because you're not having to do that across multiple accounts, and once you separate from service, the fees can increase in those retirement accounts. If you have other IRAs, as long as they're the same type, they can be combined as well, but for instance, you can't put a Roth into a traditional, so you'll probably end up with the annuity, which you have to leave, or the pension, and then the traditional IRA, which is going to be the recipient of all of those company sponsored plans, and then if you have a Roth, you'd still have a Roth. At that point, you have to decide how to manage it, Renee, who's going to make the buy and sell decisions, and you can either do that yourself through mutual funds or exchange traded funds with the help of perhaps Soundmind Investing at soundmindinvesting.org, or you could hire an investment professional to actually make those buy and sell decisions for you, you could look for a certified kingdom advisor, there's many of them, more than 30 I believe in Indianapolis, you could visit with two or three and find the one that's the best fit, but the idea of combining them makes a lot of sense to me, and will really just simplify things, okay? Can I roll them into my new jobs account, or do you still think a traditional IRA is more?

Well, yeah, that would certainly be an option, you'll have to check with your plan administrator to make sure, but usually you can, and so you would roll the, not the IRA, but the 401k and the 403b into your new 401k or whatever that is, and that's going to, again, put everything in one place, so you've got a better control over it, and then as you select the investments inside the plan, which you would probably do yourself, you would obviously just do it for all of the assets inside of the account, so I would call your plan administrator, ask that question, and if they're allowing you to do that, then I think there's nothing wrong with that, you could certainly take that approach, or roll it to an IRA, either one would work just fine for me, and we appreciate your call today. We're going to stay in Indianapolis, Edner, thank you for your patience, how can I help you? Yes sir, good afternoon, how are you doing?

Very good. Yes, my question is, because I just got married, and then I am a firm believer in Christ, and my wife also is, but the issue is, because before we got married, she used to go out with her family every Sunday after church, but now that we married and we're trying to save a little bit of money, and I'm trying to convince her that we don't have to go out to eat every Sunday, but she believes, because she used to fellowship with him every Sunday, that we should continue that. Yes, well I certainly can appreciate that, Edner, you know I think there's a couple of things here, number one is we have to recognize that the way we handle money is largely influenced by our upbringing, watching our parents, and how money was handled, and what money was used for, and in the case of her family, it was used for celebration, and to make memories, and to build family relationships.

At the same time, as husband and wife, you all are now stewards of what God has entrusted to you as one flesh, so you've got to make a plan based on the resources that you have, so I'd encourage you to start with the budget, and if that's something that's really important to her, see if you can fit that into the budget, because if it's a planned expense, then it fits with everything else. If it doesn't, perhaps there's an opportunity for a compromise, maybe it's not every Sunday, maybe it's every other. You hang on the line, let's talk about it a bit more off the air, we're going to pause much more just around the corner. We're so glad you're with us today on MoneyWise Live. Just before the break, we were talking with Edner about, he's a new husband, they're a new married couple, just trying to navigate finances, realizing we all bring different money backgrounds and personalities to the table, we value different things, and as the leader of the home, he's trying to navigate the finances, but they need to do that together, right? Sitting down saying, what is God doing in our lives financially, and how can money be used to accomplish his purposes in our lives together, and what is our shared vision now as one flesh for that? Well, his wife values every week going to lunch with her family, but Edner's saying, I don't see the resources, we've got credit card debt, we've got to solve for it. Well, we had a great conversation off the air about the next conversation they're going to have about perhaps meeting in the middle and understanding that they can't do everything, and so clearly they need to get out of debt, they want to be able to give, they want to be able to meet their needs and provide for their family, but they also value, and certainly she values, he does as well, time with family and perhaps around a great meal. And so perhaps they're going to do that not every week, but maybe once a month to celebrate what they've been able to pay off on those credit cards.

I think that's really the idea. Let's come to the table as husband and wife with an open mind, an open heart, and really seek God's best for us as a family, and then make decisions accordingly, and we'll certainly be praying that that conversation goes really well. All right, let's head to Fort Lauderdale, Florida. Lana, thanks for your patience. How can I help you? Hi, Rob. Can you hear me okay? I sure can. Okay.

I have a question for you. I have retired last year, and I find that I am going to be needing some oral surgery, and it's hard to get dental insurance when you're retired, that covers things. I did find out that I have, well, first of all, I do have my three months plus a little bit of savings for emergency, but it would take my entire emergency fund if I used it. I don't want to do that. I do have an annuity that I found out that I have. It's not much. It's $35,000. It's gained about $10,000.

I have it in stocks. Now, the question is, should I take some money out of that? I'm going to need about $10,000, and pay dearly for it because I found out that $10,000 would cost me $4,000 to take it out.

Or should I just look for another option, first of all, for the surgery? Second of all, is there anything else I can do with an annuity? Yeah, well, it's a great question, Lana, and I understand the predicament. I'm glad to hear that you've got that emergency fund. You've got some margin there, and this annuity's been performing for you. Certainly, ideally, we wouldn't want to take out from it because we'd want it to be there to have down the road.

I don't like the idea of borrowing from it, and we could get into that if you'd like. But the idea that you would perhaps pay for this out of cash flow would be the best case scenario. I realize oral surgery is not cheap. I would encourage you to at least contact the medical provider to see if they'd be willing to take payments for the procedure, perhaps give you a cash discount if you're going to be paying for this out of pocket.

That would be the best case scenario. What other options have you considered, Lana? Do you have a home with some equity in it? What else have you been looking at? I do have a home, and I do have equity, but I don't really have enough to use that.

And I really don't have a lot of debt, but I don't have a lot of extra at the end of each month either. Yes. Okay. And what is the cost of the surgery?

The cost of the surgery is close to $10,000. Okay. All right. And have you approached the provider to see if you're a cash payer, whether that could be reduced substantially, and if so, could it be paid over time?

Not to reduce the cost, but she is willing to take payments, but it's a pay-as-you-go type of thing. I see. Okay. All right. Well, I think that's the best case scenario.

There are various options like healthcare lending solutions, United Medical Credit, Prosper Healthcare Lending would just be a couple of them. So you could look at an option like that. Because this is a medical procedure, if it's necessary, we obviously need to get it done. And so that would be option one. I don't like the idea that you'd take a 40% haircut on a $10,000 coming out of an annuity.

That just is going to kind of put that as a last case scenario. I think the best option would be, other than borrowing, just see if you can get your provider to work with you and pay-as-you-go, out of pocket, really dial back your spending. And let's pray that the Lord just provides in this situation and that through those payments to that surgeon, that perhaps as long as it doesn't cause any further problems, that it could be done in stages where you could actually fund it out of cash flow.

Perhaps you look for some additional work on the side to bring in some additional income. But I think your fallback is clearly that annuity. And I'm sorry to hear you're having to wrestle through these hard decisions, Lana, but we'll ask the Lord to give you some wisdom there. We appreciate your call today. Let's head next to Cleveland, Ohio. Karen, you've been incredibly patient.

How can I help you? Hi, thanks for taking my call. Several years, not several, a few years ago I was talked into getting an annuity and I didn't know anything about them really.

And I've heard nothing but bad news about them since then. But I was just wondering if I could withdraw that all at once or do they require you to do it monthly or I don't even know how they work exactly. Yeah, so basically an annuity is an insurance product that allows you to put money in. It's a combination of insurance and savings. And there are certain guarantees depending on what type of annuity you have. Either it's going to give you a portion of an underlying index, meaning some investments like the stock market, or you'd get a portion of the upside usually with some downside protection, meaning it can't go below a certain level. Or that's a variable annuity with a guaranteed annuity, there would be a stated rate of return attached to it.

The reason we don't typically like them is because they are expensive, they're complicated, there's a lot of fees, and a lot of times you're giving up potential upside as compared to just investing directly, let's say, in the stock and bond market. You can annuitize, which means you convert that asset to an income stream for the rest of your life for you or you and a spouse. And they would be able to tell you, if you're able to annuitize, what that amount is that they would be able to pay out to you. Or there may be a surrender value that you could just take out a lump sum. It would be a number less than the face value of it. And so I would probably make that my next call, is just to understand what are your options now that you've got this annuity. If you converted it to a monthly payout, what would that be? And then compare that to your overall goals and objectives. And then secondly, what would it look like for you just to surrender it altogether? And then compare those two numbers, perhaps get some counsel from a certified kingdom advisor there in Cleveland to help you make that final decision.

But it's a blessing that you have it. Now let's find out what the wise thing is to do moving forward. And I think once you make that phone call and get that information, it will become clear. We appreciate your call today, Karen.

Let's head next to Joliet, Illinois. Phil, how can we help you? Hi, thank you for taking my call. My question is pertaining to LERP, Life Insurance Retirement Plan. I currently, I have a Roth, I maxed out every year. I'm in a union, I have a pension plan. And meeting with my financial advisor, talking over goals about age of retirement on the projection based upon the monthly amount I gave per month that I would need, it came up that I would end up running out of money in the long run. So she has suggested a LERP option as another way to fund retirement.

And I'm just curious as to your opinion on it. I've been doing a little bit more research on it and I'm just a little confused if that's the right way to go trying to be a good steward and do the right thing. Well, I think the key here, Phil, is just the need to catch up and contribute more than what you have the ability to put in in other vehicles. The LERP, as you said, is a life insurance retirement plan where you use the cash value from your whole life policy to fund your retirement. You know, the benefits of them are, to her point, there's no limitation on income that can be contributed and no limitation on contribution. So you have really an unlimited amount you can put in and the growth is tax deferred and then ultimately can be tax free when you're withdrawing because you take it out in the form of loans. But there are high premiums for the insurance portion and the interest rates on those tax free loans, if you withdraw more than your cash value, can eat away some of this. And then failing to pay back the loans will reduce your death benefit in the end.

So you need to make sure it's accomplishing the purpose for which you took it out. So, you know, they're complicated. They're not for everyone, but in certain situations they can make some sense, especially where you're trying to put away more than you'd be able to outside of an insurance product for retirement. And I think that's where, you know, that's what she's getting at. There's enough complexity here that I wouldn't want to give you a definitive in just the couple of minutes we have together on one way or the other as to whether or not this is right or wrong.

But I would say it's not an automatic no for me by any means. And I think, you know, what I'm hearing makes sense, but I'd probably get a second or a third opinion. So perhaps, Phil, what you need to do next is go see a certified kingdom adviser or two there in Joliet just to run this by them, show them your complete financial picture, show them the product that's being recommended, and then find out if they concur that this is the right move for you. Appreciate your call today.

Let us know how it turns out, and we're grateful that you want to seek God's heart in managing His money. Well, folks, that's going to do it for us today. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I want to say thank you to Deb Solomon, Amy Rios, Jim Henry, and Gabby T. today. I want to say thank you to you for being here and listening. I hope you come back and join us tomorrow. We'll do it all over again. This is MoneyWise Live. We'll see you then. Bye-bye.