Budget Tricks

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Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. Today's version of MoneyWise Live is prerecorded, so our phone lines are not open. Looking for ways to squeeze just a few more dollars out of your budget? Sometimes just a single tip can help you save a tiny little sum each month. Bundle a few of them together and now you're really saving money.

Hi, I'm Rob West. The Bible teaches us to be wise stewards of God's resources and that starts with living on a budget. Today I've got some great tips to help you stretch your budget.

And we have some great calls lined up, but we won't be taking your live calls today because we're prerecorded. This is MoneyWise Live, where God's word is our guide to financial freedom. Well, you know, one of our favorite verses about stewardship and living a frugal life is Proverbs 21 20. Precious treasure and oil are in a wise man's dwelling, but a foolish man devours it. Now the word budget doesn't appear in the Bible, but it'd be difficult to live up to that verse without living on one. But we shouldn't stop there.

We need to always be on the lookout for ways to make our budgeted dollars go further. So here are some tips for you to do just that. All right. Number one, take advantage of your grocery store's option to order online. Now, why is that? Well, because when you order online, you always know exactly what you're spending. And if you go over budget, you can easily remove something from your digital cart. Some folks have reported saving over a hundred dollars a month that way. Plus it saves a lot of time.

All right. But let's say it's later in the week and you have to pick up an item or two, maybe on the way home from work. When you walk into the store, don't get a cart or a basket. I do this myself. If you have to carry the items to check out, well, you won't be able to make impulse purchases.

It might be too simple. Actually it works and you won't end up buying any milk either. Speaking of stores, don't go into places where you'll be tempted to overspend.

Hey, if you're on a diet, you don't want to hang out in donut shops. The same holds true for living on a budget. If you're tempted to overspend in big box stores, just don't go there.

Here's another simple trick. Keep your checking and savings accounts at different banks. If you can't see your savings account, you're less likely to tap into it. This is another reason to have your savings account in a higher interest online bank.

You can connect it with your checking account to transfer money, but otherwise saving is out of sight. All right. Now, are you struggling to pay off debt? Well, do it first. Don't wait to see how much you have left over at the end of the month. Budget an amount for debt repayment and transfer that money when it comes in and that way you know it's done. Now, our next trick is something financial teacher and author Howard Dayton always recommends and that's having a weekly budget meeting with your spouse.

Only he calls them money dates. Sit down and discuss how well you did the last week staying on budget and how you're doing it meeting your goals. And that leads right up to our next tip, which is having an accountability partner, probably your spouse for large purchases. Agree to consult the other person before spending say more than $50. By talking about it, you may discover the item isn't really necessary and many times just the thought of having to clear it with someone makes the desire to spend go away.

All right. Another neat little trick, one that you won't need once your emergency fund is sufficiently built up. But until then, let's say some unexpected expense crops up and blows your budget for the month.

Don't give up and say you'll try again next month. Instead, write up a temporary budget to get through the rest of the month or until your next paycheck. Cut out all unnecessary spending and try to stay as close to budget as possible, living on as little as you can. Don't let it become an excuse to overspend just because you hit that bump in the road. And for our next trick, make it just a bit more difficult to buy stuff online.

You know, these days with just a few taps on your smartphone, things automatically appear on your doorstep. It's so easy to overspend that way. But if you delete your credit or debit card information from online stores, it slows things down. If you have to get up and hunt for your wallet, maybe you'll think twice about making that purchase. Now let's say your cash only. Kudos to you, you're automatically spending less that way just from the psychological barrier of having to use real dollars. But did you know that it can save you money another way too? Let's say you have to make a major purchase and you've saved up cash for it. Well, ask for a discount because when you're paying cash, the store is automatically saving two or three percent by not having to pay that vendor fee. And they may be willing to pass that savings on to you.

Who knows? Every little bit helps and it doesn't cost anything to ask. And by the way, did you know you can often negotiate your medical bills? In many cases, a doctor, a hospital, a clinic. They'll give you a break, especially if you're paying with cash.

They don't have to go through the insurance company to get paid. Well, those are some tricks to help you stretch your dollars in your budget. I'm Rob West. This is Money Wise Live, where God's word is the last word for your finances. We'll be right back. Welcome back to Money Wise Live.

I'm Rob West. So glad you're along with us today as we unpack God's word related to your financial questions. What's on your mind today? Is it giving? Is it debt? Trying to repay that as quick as you can? Maybe it's the priority order of the use of God's resources. How do I save and give?

How do I pay down debt and give? Remember, we have limited resources, unlimited options in terms of how we spend our money. So it really often comes down to our priorities. And really, we should say God's priorities.

It's his money. The question is, how does he want us to use it? What's most important to us?

What are our values, our deeply held beliefs? Where is God taking us in the future? And how can money as a tool be aligned with God's heart as it relates to our lives? What lifestyle has he called us to?

And what goals should we be setting for the future? How much should we be giving away now? You know, as we go to our knees in prayer and ask the Lord, and then search the scriptures, 2350 verses dealing with money. That's how we find God's heart and we align our spending decisions with his word and joy and contentment and ultimately freedom follow.

At least that's my experience. We want to help you find that joy and freedom today. Again, the number 800-525-7000. Let's start in Chicago, Illinois today, WMBI. Gladys, so glad to have you on the program today. What's on your mind?

Hi, good afternoon and thank you so much for your ministry and for taking my call. The reason I'm calling, I have reached retirement age and I have the option of having my retirement money through my employer as a pension payout of every month, but there's no transfer to beneficiaries after I die. And the other option is to have it rolled over as a lump sum and I wasn't sure which would be the best way to get a lifetime stream with that lump sum if I rolled it over. Yes. Would it be through an annuity or would it be some other vehicle? Yeah.

Very good question, Gladys. Have you put together your retirement budget yet? Do you know what it's going to take for you to fund your lifestyle, all of your expenses in this season when you stop working? Yes, I actually have gone through an analysis with the company that my employer has for our retirement fund.

Okay, very good. It came up with a suggestion for annuitizing. Okay, and what do you think, I mean, when you look at your budget, you calculate all of your expenses, you know, if you're no longer saving for the future or at least, you know, maybe as much as you were putting away for retirement and, you know, you look at your expenses in this season of life, what do you think it's going to require you to have in the way of income each month from whatever source, whether it's this pension or an income stream from the lump sum rollover plus social security? How much do you think it's going to take for you to fund your lifestyle each month? Oh, about four thousand. Okay. Yeah, and what are you planning to receive from social security? Do you know?

Three thousand. Okay, and do you have any other income sources other than the pension? No.

Okay, so you're going to need to draw about a thousand a month, twelve thousand a year, either in the form of a monthly check that comes to you for the rest of your life, as you said, without any kind of carryover or pay out to beneficiaries at your death or by taking a lump sum and then converting that to an income stream, correct? Correct. Very good. What is the monthly amount that they said they would send you for the rest of your life?

With my employer? Yes. For my pension, that would be about two thousand. About two thousand a month. Okay, and then what would be the rollover amount? Have they given you that figure? It's more than three hundred thousand, I think.

Okay. All right, so let's say it's three hundred thousand. If we were to convert that to an income stream, we would typically use about four percent. So that would give you your thousand dollars a month, roughly.

You'd have to take a little bit more than that to cover, you know, the taxes that would be due. But let's say you could make it work by pulling out a monthly income stream that's going to get you what you need every month. The difference is, the idea would be you'd take that three hundred thousand, you'd turn it over to an investment professional and after a lengthy discovery process and exploring your goals and what God has for you in this next season, you all would together come up with an investment strategy that gives you peace of mind, gives you a bit of a growth factor, probably a smaller percentage in stocks that would give some growth to the portfolio. But the bulk of it would be in fixed income type investments such that you could pull four percent a year and never see a decline in the principal. And in those years, let's say we hit a recession a couple of years down the road and let's say the market's down for 18 months to two years. Well, the idea would be that if you had a decline in that portion and you would during that period of time in that portion of the portfolio that was in stocks, you wouldn't pull any of that money out. You wouldn't sell any of those investments.

You would hold them, wait for them to recover, which historically speaking, that always has. We expect it would in the future. And then that would again, once the market started growing again, provide some growth, a growth engine, if you will, for the portfolio. The difference though, Gladys, in what I'm describing here is the idea would be you'd never touch that 300,000 and at your death, you'd still have $300,000 if all this works out like I'm describing, which could then be given away to ministry or charity, could be passed on to your heirs as an inheritance or both. But the idea would be you'd still have that principle. The other benefit of that is if you had a major expense down the road, let's say you needed some long-term care, you needed some in-home care, assisted living, something like that, you'd have the asset to then use for that purpose as opposed to just the pension payout, which is that monthly income stream.

So I'm thinking that might be the best approach, but you know, there's a lot of kind of finer points you'd need to explore. So I'm going to recommend you connect with one of our Certified Kingdom Advisors there in Chicago, do some planning, look at all the numbers and the finer points of the details on exactly what you'd get in the lump sum versus the pension, talk through it all, and they'll help you make that decision. But I'm just thinking at least based on what I know today, I kind of like the idea of you getting the full payout and then having somebody convert that into a portfolio that will generate the income you need to cover your bills, but you still have access to the principle. Does all that make sense?

It does. But one question that was recommended to annuitize part of it, and when you talk about a fixed income, are you not talking about an annuity as part of it? Because the plan was, well, this is what was offered, was portion of it to be annuitized and the rest to be managed in a growth fund. But when you say a fixed income, what were you speaking of? Yeah, well, I'm talking about a classification of investments. So I'm talking about fixed income type investments, but they're still marketable. So bonds, let's say government or corporate bonds, short term, long term durations, but these can always be sold and you could pull your cash back out. It's just that they're going to generate an income for you through that debt instrument that you'd buy, perhaps in a mutual fund or something else where you get good diversification. But it's not as risky of an asset class as, say, stocks are when you buy stocks in growth or income type companies. But you're also not locking it up in an insurance product either. You still have access to your money at any point because you could sell those bonds or sell those stocks. So I think that's the difference is do you want to put the risk on the insurance company and just take the check every month and you don't have to worry about what the market's doing?

Or do you want to take that lump sum payout, hire an investment professional and then actually have access to your money, but take it and invest it in such a way that you can produce an income for yourself while you're allowing that portfolio to continue to grow. Does that make sense? That does now. Thank you for explaining it like that. You're very welcome. So I'd connect with a certified kingdom advisor, maybe two or three. Maybe you take, if you're married, of course, your husband.

If you're not a friend or a family member along with you, just go to our website, MoneyWiseLive.org, and click Find a CKA and you can get connected there in Chicago. And we appreciate your call today. So excited for this next season of life and all that God has for you around the corner.

Folks, we're so glad you're along with us today. Up next, we're going to be talking about how you build your savings, perhaps where you should put it. We'll be talking about investments in coins. We'll even talk about perhaps where to put your stimulus check and whether Bitcoin's a good investment option.

All that's to come right around the corner. This is MoneyWise Live. Welcome back to MoneyWise Live, where we apply God's Word to your financial decisions. Just before the break, we were talking about connecting with a certified kingdom advisor. These are men and women who've earned a professional designation, certified kingdom advisor that really builds on an existing base of competency as evidenced by at least 10 years in the business, perhaps a CFP or a CPA or a CFA designation. And then they go on to earn this specialized designation, CKA, which has everything to do with their character, their references from pastors and clients, their integrity, as well as a regulatory review. And finally, a university-based 50-hour course on specializing and bringing God's Word to bear in professional financial advice. So these are men and women who are committed to giving you godly counsel that's both competent and wise. And they're all over the country. More than 1,500 professionals have earned the CKA designation. They're at firms all across the country, independent, big wire houses. And you can connect with one in your area by going to our website, MoneyWiseLive.org.

Just click Find a CKA. We've got some great questions coming up on a whole host of issues, including whether Bitcoin is a good investment. We'll get to that with Gloria in just a moment. But first to Indiana, Jean Ann, we're so glad you're on the program today.

How can we help? Oh, thank you for taking my call. I am in my 80s. In 2016, I changed banks local to a different local bank to get a lower rate from like seven or 8% down to 3.89%. But in looking at my mortgage loan statement, as of this month, my principal having been paid in for this year is $796. And the interest is $655. I pay my own taxes and insurance. So how could this be called 3.89?

Yes, very good. Well, it's a great question. And I can understand your confusion. Here's what you're paying on. It's called an amortized loan. And that's a fancy word that just simply means it's a type of loan with scheduled periodic payments.

And so they're fixed payments. So just like you pay the same amount every month. And the interest rate that 3.89% is applied to the loan's principal balance. So at the beginning of each period, they look at the balance, they apply that interest rate to it. And that determines how much interest is owed for that period, that 30 day period, and that interest is paid first. So whatever that interest is based on the balance of that mortgage, the beginning of the period that comes out of that fixed scheduled monthly payment, and then what's left over goes to principal, well, then the next month, the next period, they look at that balance, which should be lower, because there's a portion of it, even though it's a small portion that went to principal reduction to pay down the balance, then they calculate the interest again, that's again paid first, and the remaining portion goes to the balance. So what that does Jean Anne is in the earlier years of the loan, the majority of that fixed scheduled monthly payment is going to interest and a lesser portions going to principal, but that reverses in the second half of the mortgage. Because if you just continue paying those scheduled payments, you're going to end up with a lesser amount over time going to principal excuse me, interest and a larger amount going to principal. So that's the way it works. Now, when you pay extra, so something over and above your scheduled monthly payment, that's going to go right to principal, which is going to reduce the amount of interest that's owed in the next period, because the balance is lower, you should have gotten and if you don't have it, you could request this something called an amortization schedule, that just simply says, in every period between the first month of the loan to the last month, when it's paid off, here's the portion, if you just simply make those payments that are scheduled every month, here's the portion every month, that's going to go to interest, here's what's going to go to principal, and you're going to see a series of periods over the life of the loan, whether it's a 15 or a 20 or 30 year mortgage, and it'll show you every month from beginning to end. Now, the only way that would change is if you send extra.

If you send something to reduce the principal, then they'd need to run you a new amortization schedule that says, okay, based on the balance today, through the payoff, whenever that is down the road, here's exactly what's going to go to interest, here's what's going to go to principal based on your scheduled monthly payment. I know that's a lot. Does that make sense to you? Yes, sir.

And I thank you for your explanation. Okay, I'm glad to do it. Hey, don't hesitate to call your mortgage company.

Tell them Rob West said you need an amortization schedule and that maybe will give you the information you're looking for. We appreciate your call today. Hey, let's head to Gage Park, Illinois. Troy is up next.

Troy, what's on your mind? Yeah, thanks for taking my call. Sure. I'm retired and I have a savings from a great grandson. I like for him to go to college, but I like for him to be in the best saving account you can have for going to college. He's 12 years old now. And I have about $2,000 in coins that I need a numismatic, numismatist to check to see if it's worth any more so I can put that in with you. Good.

Well, I'd do two things. I'd go to the American Numismatic Association and look for a searchable list of coin dealers, or you could go to the Professional Numismatists Guild and look for a directory there. Either of those could be searched for online, American Numismatic Association and Professional Numismatists Guild. Find one in your area to give you a value, then use a 529 plan to invest it.

The website you'll want to go to to find the best 529 for you and your grandson is savingforcollege.com. If you missed any of that, hold on the line. We'll give it to you. You're listening to an encore presentation of MoneyWise Live. You can find out more information about the topics we're talking about when you visit our website, moneywiselive.org. Today's program is prerecorded, so keep that in mind. We're going to pause for a brief break, but we'll be back in a moment with more MoneyWise Live. Welcome back to the program. I'm Rob West. So glad you're along with us today.

Today's program is prerecorded, so I would encourage you not to call in, but I will tell you we have some wonderful calls all lined up in advance that I know you will enjoy. Hey, we started the program talking about budget tricks. How do you stay on budget and what are some tips that you can employ to do that more effectively? In fact, that was our question of the day on Facebook. Can you share a trick you've learned for staying on budget? Let me mention one. Janet responded and said, my checkbook ledger. Now, some people still use those and that's a good thing.

Whatever works for you, right? She uses her checkbook ledger to put every purchase, even her credit card purchases in it. When the bill comes, she checks off each item, so she knows it's covered. So she's got a running balance of what's left in her funding account, which would be her checking account. She also says at the beginning of the month, I enter my budgeted utilities, insurance, and house payment. And then if she has any money left over the end of the month, well, it goes into savings. And so Janet, thanks for sharing your tip.

I love it. By the way, you can do the same thing in our MoneyWise app. That's right. If you download it for free in the app store, the Google play store or the Apple app store, just search for MoneyWise biblical finance. When you download it, you can connect it to your institutions that would require a pro subscription, but 11,000 institutions can be connected. You download your transactions automatically and they'll come in. You can put them in your envelopes. And that way you're always reconciled between what's available in your checking and other funding accounts and what's been moved down into your envelopes. As your transactions come in, they go into the envelope.

So you can always see in real time what's left. What's in my restaurants category? How about my vacation category?

And Oh yeah, what about the clothing category this month for me and little Johnny and little Susie? It's all there in the MoneyWise app. So download it today. And by the way, while you're in the app, jump into our community tab where you can post a question and get a response from one of our MoneyWise coaches and our discover tab where you can see the best podcasts and content in biblical finance. It's all in the MoneyWise app.

Just search for MoneyWise biblical finance. All right. Phone lines open today. Looking to hear from you, whatever's on your mind or your heart, giving, debt, savings, investments. We want to hear from you. We have open lines, 800-525-7000. That's 800-525-7000.

Let's go to Port Charlotte, Florida. Angela, you're next on the program. Go ahead. Thanks for taking my call. I listen at you just about every day.

And I have a question. I know one of the things that you say that we should do is always have three months of bills and stuff put up. So I've been saving for that. But I have some credit cards and accounts that I have enough money to pay off. Should I just not pay them off and go ahead and save the money for the three months of emergency fund or should I pay them off and then stop building the emergency fund?

Ah, yes. So the bills you're asking about whether you should pay off from these dollars that you've been saving for emergencies. And by the way, glad to hear that you've been listening and that you're saving for that emergency fund. That'll come in really handy the next time you have an unexpected expense. Angela, did you say those are credit cards?

Is that right? Yeah, most of it's credit cards and some student loans. Okay. How much do you owe on the credit cards in total across all the cards roughly? Probably total all of the cards about $9,000.

Okay, very good. And how much have you saved up for your emergency savings? Right now, I have about $7,000 total. About $7,000.

Okay, very good. You know what I would do, if you have credit card debt, I'd be comfortable unless you can see something on the horizon that's coming that you know you're going to need that emergency fund for. And by definition, you know, you shouldn't be able to see it coming because anything that's planned would typically come out of your budget.

This should be for the unexpected. But if you knew just as you're getting all of this working properly, you know, the washer dryer was just hanging on by a thread or, you know, you knew you were going to need new tires on the car, you don't have that saved up, I'd back that amount out. But if there's none of those that you can see immediately, then I'd be comfortable with you dropping that emergency savings down to $1,500 and take the rest of it, which would be about $7,500, or no, excuse me, you have $7,000 saved, so about $5,500, and put it toward the balances that are the smallest. Start with the smallest balance, pay that one off, then the next smallest balance, pay that one off and move right down the line until the $5,500 is gone. Then keep saving every month and you should be saving more at that point because you are no longer sending the minimums to those cards you just paid off, but you're sending the credit cards you just paid off, and let's keep attacking the credit cards until all $9,000 is gone. Then take 100% of that money you were sending to credit cards and let's get that emergency savings up to three to six months expenses at that point. I think that's the best bet, but here's the key to all of that, Angela, you've got to be living on a budget because what I don't want is for you to take the savings, put it on the credit cards, and then the credit card because you're living beyond your means. I don't think that's going to happen because you told me you just not too long ago heard the program and started saving and now you have seven grand.

So it sounds like you're very disciplined, so I'd be comfortable with you following this approach of keeping $1,500, putting the rest on the cards, staying with it until it's all gone, and then jump back to the savings. Do you follow that? Yes, that sounds really good because I want to be like the Bible. I want to owe no man but the loving. I love it.

I love it. Hey, I want to send you a gift. So you stay on the line today and we're going to send you Ron Blue's book Generous Living because you sound like a generous person who'd be encouraged by reading some of the scriptures.

You know what? Actually, here's what I want to send you. I want to send you the Stewardship Bible. This is a beautiful Bible and every passage on money has been highlighted in green.

It was done by our friends at the American Bible Society in partnership with Compass, and I think you'll really enjoy it. So we're going to send you a copy of the Stewardship Bible, Angela, as our gift to you to say thank you for listening and calling and sharing with us today, and we appreciate it very much. You stay on the line. We'll get your information. Let's head quickly to Bellevue, and that's you, Gloria.

So we've got about a minute left. You go right ahead. Okay. Actually, I was just wanting to make your money, make money. Have your money, make money. So with this stimulus, would it be a good investment to put it into Bitcoin, or what would be a good investment for it? You know what? I wouldn't. Bitcoin's value has been historically volatile.

I mean, get this, Gloria. In a three-month span from October of 2017 to January of 2018, the volatility was just off the charts. You know, the volatility is twice the volatility of typical investments just for that 30-day period. And so it's because news events scare Bitcoin users, and it's the perceived value versus a fiat currency where there's a central bank, and the fear that Bitcoin can be hacked, not to mention that it's a lot of speculators in there. So the volatility has just been really high, and I think for that reason, it's not the right investment for God's money. I think Bitcoin and cryptocurrency is here to stay, just not for your investment dollars.

So I'd stay with the tried-and-true approach with a diversified stock and bond portfolio, and that's always going to win, in my view. It's great to have you with us on MoneyWise Live today, but unfortunately, today we're not live. We're prerecorded and therefore won't be taking your calls. However, we've lined up some calls in advance that we think you'll find helpful. So stay tuned and enjoy the rest of the program. This is our final segment of a broadcast we previously recorded. Thanks so much for being with us today, and we hope you'll stick around and enjoy the rest of today's program.

Welcome back to MoneyWise Live. So glad to have you along with us today. Let's go to Cleveland, Ohio. Jim, you're next on the program. Go ahead, sir. Hi, can you hear me all right? I sure can. Yes, sir.

Okay, good, because I'm in the car driving, so I didn't want to be holding the phone. Okay, so I want to lend, not lend, I want to give somebody money to pay off their house, and I was thinking of just, you know, it's quite a bit of money. It's over $50,000, and I don't have a problem with that. God has blessed me, but I want to be sure I'm doing this right.

Do I need to call the lender myself and take care of this, or say, hey, listen, I need to know the, you know, the principal balance on this loan, or, you know, it's, or should I have them do it, or should I pay off like most of it and then say, okay, there's only like, you know, $2,000 left or something? Sure, sure. Well, yeah, no, first of all, I appreciate your generous heart. I'm not sure the circumstances behind this desire, but I'm confident it comes from a place of real generosity where you're just trying to help in a, what might be a difficult situation, regardless of the circumstances.

This is incredible. And I appreciate, Jim, that you want to do it wisely. Do you have concern about whether the money would get to the right place if you were to not pay it directly? Well, I just, I was listening online and they said, well, you got to be sure it goes towards the principal and not towards the interest. And I, how do I know, you know, if I just send a check in to them, they're just not going to do the right thing.

Right. Now you don't want to do that. You want to have all the documentation. The good news is because you're paying it off, you just need just that.

You need a payoff. The challenge is just going to be that the lender is not going to give you that information. You're going to have to work with the account owner, with the homeowner, because they're, you know, that's the person that the lender is going to speak to.

Even though you're attempting to pay the debt in full, they're just not going to be able to provide you that information. So here's what I would recommend. I think you're going about this the right way.

You want to be wise. You also want to make sure that the gift that you're making, because you intend it to pay off the mortgage, you don't want to just make it to the individual and, you know, it may end up somewhere else. And so as long as the homeowner is willing to work with you, the recipient of this gift, basically what they're going to want to do is they're going to want to call the mortgage company, tell them that they have the authorization to speak to you and provide you with the mortgage payoff balance, and that you want the instructions on how to send that money directly to them with the specific dollar amount of the payoff, and then you'll want to, you know, send that to them with it to their attention with the proper loan number on it and documentation, so that when they receive it, then they'll mark it paid in full and send that canceled mortgage back to the homeowner and everything should be good there. But you're going to have to coordinate. Doesn't mean you're gonna have to give the money to the homeowner, but you're gonna have to coordinate with the homeowner to allow the mortgage company to communicate with you so that you can get that payoff balance and the instructions to carry out your wishes here.

Does that make sense to you? Yes, and I could probably do that. I mean, I have actually helped them before over the past 10 years, and so I can just go to their house and do this. Yeah, I would just call them and say, listen, you know, the Lord's led me to do this, I have a desire to do this, whatever it is, and say, here's how I want to handle this. I'd like to pay off this home. I'd like for you to be free and clear and not have this expense any longer, but I'm going to need your help to do it. Are you willing to take the gift and help me get this paid off?

And I assume they'll say with tears in their eyes, yes, thank you. And at that point, you'll want to then coordinate that conversation with the lender to get that balance and the instruction so that the payoff can take place appropriately. Okay, I need to call the lender with them there, and they can actually call and give them a purchase to get me. Okay, I get it.

Correct. Yeah, you may not need to be there. I mean, you could do a three-way call, or they could call and add your name, you know, as somebody who's an interested party, and then you could call separately.

I mean, there's a number of ways you could go, but that's the bottom line of what has to happen. Hey, Jim, call us back, would you, when all this is done and let us know how it turned out? I really am just interested and excited about what you're doing here, my friend. All right, well, thank you very much. All right, God bless you, Jim. Appreciate your call today.

Let's go quickly to Winter Haven, Florida. Ross, you're next on the program. What's on your mind, sir? Hi, Rob.

I want to say thank you for what y'all are doing on the program. And my question is, is I am 23 years old. I am married. My wife and I just bought a house, so we are just now, you know, taking on payments and stuff like that. I have a couple home improvement projects, but my question is, I am kind of somewhat self-employed. I work for my dad through our business, and there is no retirement or anything set aside for me or any way for me to do that through our business.

So I'm wondering kind of what would be the best way for me to get something going as far as a retirement in that sense? Yes. Are you paid, Ross, as an independent contractor or are you paid a salary? I am paid by the hour working for my dad, but my dad is paid as a contractor. Yes, sir. Okay, so are you getting a 1099 or are you getting a W-2? Do you know? I believe I get a W-2.

Okay, all right. So you're not considered self-employed, so you've got a couple of options. Number one, do you and your dad plan or does your dad plan to hire more people? Does he have other employees and is he looking to increase that over time?

I am the only employee and I think he is maybe in later on in the future as if we decide to grow the business. Okay, well you know one of the things that would be a real blessing to you and would be something that would be desirable on the part of future employees would be a retirement plan. 401ks can be expensive and somewhat complicated to set up and maintain. Something though like a simple IRA, you could google that. Fidelity would be a great place or Charles Schwab to open one of those, could even use Vanguard. Fidelity makes it really easy to open a simple IRA and it would essentially be without all of the annual filing fees and complexity and without a lot of cost, just a real easy way to start a retirement plan for you and future employees for the company and that would be a real blessing to you to be able to put money in there on a salary deferral basis. So I would ask your dad about looking into starting a simple IRA and I think that would allow you to put some good money away. This year you can put in, I believe it's $13,500 which would be a great start. Beyond that, I'd look with you being a young guy married, regardless of what your dad does, you can put away $6,000 a year in a Roth IRA. You wouldn't get a tax deduction but that money would grow tax free for the next, let's say, 40 plus years between now and retirement and if you just did nothing more than put that $6,000 a year away for those 40 years, you'd have a bundle when you're done.

But I'd love for you to do both. As long as you're giving, as long as you don't have any credit card debt, you've got your emergency fund, I'd go ahead and start funding retirement. Even if you can only put in 5% of your salary, I'd love for you to get that up to 10 to 15% over time.

So talk to your dad about a simple IRA and then open a Roth IRA for you and your wife and you guys can put in $12,000 between the two of you even if she's not working because she can have a spousal IRA. We appreciate your call today. Kathy, you're going to be our final caller today.

What's on your mind? This is for my granddaughter. My daughter was asking me about getting a custodial IRA and we wanted to put $100 a month in. She's three and we're hoping to have money grow for her so when she's in her 20s, she can use that money any way she wants to.

Her college is paid for so we don't have that concern but we're just wondering how do we go about it, which one should we get? Roth's traditional and is $100 a month a good amount to put into that? Yeah, the challenge, Kathy, is that you, the child, even with a custodial IRA where the custodian, typically a parent, is holding it for the minor and then it becomes their account at the age of majority in your state, even with a custodial account, the child has to have earned income and I suspect your three-year-old does not quite yet have earned income, correct?

That is correct. Okay, so you know, I mean we're starting them early these days but probably not that early so it's not going to be an option. Now, I love the idea of starting an IRA early. You know, there's a great article on our website right now MoneyWise.org from Art Rayner. Actually, he did a whole podcast on a 16-year-old that already has a Roth IRA and he's funding it every year. Man, if you just do that between now and retirement, you'll have a lot of money and you can, you know, build that up, see the power of compounding work but it does require that you have earned income. Now, oftentimes, you know, you might work for mom and dad's business as long as it's legitimate, meets the IRS rules and regs, you know, and gets a paycheck for real work once you get to the appropriate age, that's great. Or if she does some part-time work down the road, that would be a great option. You've already funded college so I think the next option is probably to just build an investment portfolio that's separate, that's in you and your husband's name, probably a joint account that's taxable where you could just start making contributions, systematically investing it, probably use Schwab Intelligent Portfolios or Betterment, one of the robo-advisors and you'd earmark it so that all the growth stays in the account and then when the appropriate time comes, you can give it to your daughter.

That'd probably be the best bet for the way to save and invest for her to have something for the future. So we appreciate your call today, great idea and I love that you're starting her early. Well, folks, that's going to do it for us. So glad that you were along with us today.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Let me say thank you to my team today, Deb Solomon, Amy Rios, Jim Henry, our amazing call screeners today. We're so thankful you were along with us today as we applied God's truth to your financial decisions. Listen, we're going to be back tomorrow to do it all over again. I hope you'll join us. In the meantime, may God bless you. See you tomorrow.