Managing COVID Debt

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Hi, I'm Rob West. Millions of jobs were lost in the U.S. due to COVID, and not all have returned, not by a long shot. That's pushed many folks deeper in debt. John Jodka with Christian Credit Counselors tells us the best way to manage that debt today. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial journey. Our guest, John Jodka, is an account supervisor with Christian Credit Counselors.

He leads a team of trained specialists who help people manage debt responsibly, according to biblical principles. And John, a real treat to have you with us today. Thanks, Rob.

Glad to be here. John, as we often say, you folks at Christian Credit Counselors are on the front lines educating and helping folks whose debt has gotten out of hand. In your view, just how bad did things get with the COVID pandemic? Yeah, Rob, I think it's hard to overstate how bad things got. During the pandemic, over 20 million jobs were lost in the United States, and household debt ballooned up to $14.6 trillion. Now, as restrictions are lifting, millions of Americans are getting back to work, getting back out in the workforce, but are unable to deal with the debt that they incurred during this time just to keep their heads above water. And what makes that struggle with debt even more difficult is being unsure of where to go for help or how to evaluate the different options that are out there. So, what I wanted to talk about today are the pros and cons of the most common strategies that people may encounter. That sounds like a great plan.

John, where do we start? Yeah, the first strategy that many people use is dealing with their creditors directly. They are in trouble, and they give their creditors a call.

And what is really beneficial about that is that it's straightforward. They're getting help directly from their lenders. Generally, they're able to keep their accounts open and in good standing. Now, the downsides here are that any help that you might get from your creditor is usually short-term, between six and 12 months. And these might not be the most favorable terms that you could get. Yeah, and I would imagine this is naturally the most common strategy people use, John.

But what happens if that approach doesn't solve the real underlying problem? Well, at that point, a lot of folks turn to debt settlement, which is something that we never advise at Christian credit counselors. Debt settlement seems attractive at first because there's the potential to pay back less than the full balance owed. And the client doesn't have to deal with the credit card companies or creditors directly. The downsides of debt settlement are numerous.

These are for-profit companies that charge extremely high fees. And before the process even starts, these accounts have to go to collections. They have to already not be paid. There's no guarantee that a creditor will even successfully negotiate a settlement.

And collection activity might continue during that time, up to and including lawsuits. Finally, debt settlement causes severe damage to the credit score. Aside from bankruptcy, it is the most negative way accounts can be reported.

Yes, John. Clearly, that's not the approach to take. The other approach that we see many folks take is debt consolidation. I'm not a fan of that approach either.

I know you're not as well, John. Talk about the downsides of debt consolidation and how that differs from debt settlement. Yeah, Rob, with debt consolidation, when one obtains a loan to pay off the other debts that they have, there are downsides that come along with that, too. Again, it seems like a great option on its face. But debt consolidation loans often have high interest rates and terms that aren't very favorable. So, when you think that you're getting a loan that's going to get you out of debt and get you into one monthly payment, what you find is that you're coming into a situation where you're going to end up paying even more in interest to the banks in the long run. And that's why I'm not a fan of it.

We don't recommend it. Yeah, I completely agree. You know, even if you're lowering the interest rate with a debt consolidation loan down from the high-interest credit cards, often extending that term out and having a lower monthly payment is going to cause you to pay more in the long run. Plus, I know you've seen this, John, what I experience is that folks end up getting the pressure taken off with that debt consolidation loan. They haven't solved the underlying issue, which is overspending. And so then, six months or a year later, the credit card debt's back, and now they have the debt consolidation loan on top of it.

So, bottom line, none of these approaches are very effective. But we've got one that is, and it's using a debt management agency, specifically Christian Credit Counselors, with a far more effective approach. We'll talk about that just around the corner. Joining us today is John Jodkow with Christian Credit Counselors.

Stay with us. More to come on MoneyWise Live. Welcome back to MoneyWise Live.

So glad you're along with us today. The pandemic has really caused some financial challenges for many Americans. In fact, millions who have lost jobs, seen a reduction in pay, perhaps been furloughed. And as a result, credit card debt is at incredibly high levels. So how do you approach that?

Well, we went right to the source today. Joining us is John Jodkow, account supervisor with Christian Credit Counselors, an underwriter of MoneyWise, and a great partner in ministry. John, just before the break, we were talking about some of the ways that we don't advise folks go about getting out of credit card debt. We don't advise consolidation loans. We don't advise you to use credit or debt settlement, which will destroy your credit and often cause you more harm financially and expense in the long run. We even don't recommend you just try to go it alone, because often those solutions are temporary and will not ultimately result in you paying off the debt. So there must be another alternative.

I know there is. Tell us about the most effective way, in your view, to start to tackle this. Yeah, Rob, you know, the strategies we talked about before, like you said, don't address the underlying issue. And we think that the best strategy that does that is what's known as debt management. I think it's the best strategy to get out of debt and stay out of debt. And the reason why is that under a debt management program, the debt management agency works in direct partnership with the credit card companies to reduce the monthly payments and the interest rates. The benefit of this is that you're working through the agency directly with the creditors. The accounts remain in good standing.

This does not harm your credit. And because the balances are paid in full, clients will come out of the debt management program in a better position than when they went in. The other benefit of the debt management program is that the accounts are paid off more quickly than using any other method. With the direct partnership with the creditors, the interest rates and the monthly payments are reduced and the client is able to get out of debt and stay out of debt in the long term. And under debt management programs, the client gets one-on-one counseling with a certified credit counselor. That means that not only are we addressing the math issue of the credit cards, the payments, the interest rates, the dollars and cents, but we're also addressing all of the financial concerns that led to getting in that position in the first place and building a better position for the client when they leave the program.

Yeah, there's no question about it. Of course, Christian Credit Counselors is a debt management operation, and this is the process that you follow, walking with God's people, helping them to set up these plans, address the interest rates, get on a payment they can afford, work with them to set up the spending plan, and as we know, help them get out of debt, on average, 80% faster. I know it's founded on biblical principles as well, John, and that's really a big part of this, is you see this as a ministry.

You and your team coming alongside folks in these situations. Talk about that aspect of what makes Christian Credit Counselors different. Yeah, Rob, absolutely.

So, you said it. The biblical principles of financial management are what drive our business and, I think, set our clients up for success. One of the things that we think about here and I think about when I'm talking to my clients directly is, how are we being good stewards of what we've been given? And I'm reminded of Proverbs 21.5, the plans of the diligent lead to profit as surely as haste leads to poverty. And to me, what that says is, when it comes to your finances and when it comes to your money, being diligent about making a plan and making the best choices will lead to the best outcome. And that's why when we work with our clients, we apply those biblical principles because we believe and we've seen that that generates the best outcome in the long run.

Yeah, that's very good. John, walk us through the process. When somebody calls with debt problems and you greet them on the phone for the very first time, what happens next?

Absolutely, Rob. When someone gives our office a call and takes that first step to get in touch with us, the first thing that happens is that they get a no cost, no obligation consultation with one of our certified credit counselors. Our counselors will sit down with the client or over the phone or by email and go over their situation in detail, not only the debts, but also the budget, the spending plan, and talk to them about their situation and get a real personal connection to what's going on in their lives and what's bringing them to our ministry. The credit counselor is then going to be able to work with the client and the creditors to put together the plan that's going to reduce the interest rates, reduce the monthly payments, and in the end, get them out from under the burden of debt.

Yeah, that's great. After that, obviously, they will look at each of their creditors and determine what those new interest rates will be. All of that then results in a consistent monthly payment that's built into their spending plan. Is that right?

That's exactly right. The benefit of the debt management plan is that there's one monthly payment that's going to address all of the debts, and it's going to be lower than the client can imagine. And even at that lower payment amount, get the client out of debt 80% faster on average. And the power of that is in the reduced interest rates, which on average, John, if I'm not mistaken, offer a significant reduction from what they're experiencing with their prevailing rates.

That's right, Rob. As we come out of the pandemic, what we're finding is that interest rates are starting to increase on credit cards, on mortgages, on all kinds of things. And credit cards have some of the highest interest rates in the lending market already. With debt management programs, interest rates can be reduced by as much as 50%. And so, what the client sees then is that every dollar that they put down towards their debt goes immeasurably further than it would at the higher rates that they were paying. Yes. John, this is really helpful.

We've got just about a minute left. I'd love for you to share a story, perhaps an individual, no names, of course, but someone that illustrates what Christian credit counselors can do for folks struggling with debt. Yeah, Rob, I had a client just complete the program recently here in 2021. Now, he enrolled with us in 2016, and he had just over $81,000 in credit card debt, across 15 credit cards. So, quite a bit of debt, a lot of cards. And what his goal was, was to get out of debt before he retired. Now, the way that he was paying before the program and the interest rates he was paying at, it would have taken him 124 months. That's 10 years to get out of debt and get out from under it. And in that time, on that $81,000 debt, he would have paid an additional $118,000 in interest charges. Now, through the program, we were able to get him paid off in 60 months, exactly five years from the date he enrolled. And he paid just $13,000 in additional interest. That means we saved him over $105,000 through the program. And he was able to get out of debt and to retire debt-free.

Wow. Well, I can imagine. I mean, the burden that that lifted from this gentleman. I mean, talk about the freedom and the joy that comes from, first of all, just having a plan that he knows is going to result in getting out of debt. But then, when he finally gets to that point, tell me about that. That, for me as a credit counselor, is the best part of the job, is when the client completes the program, when they get out from under that burden of debt, and you can hear it in their voice and see it in their face, the relief that comes along with that, the freedom to pursue what they want to pursue and to live their life according to God's mission. I love it.

Well, that's all the time we have today. But John, appreciate you stopping by very much. Rob, it was an absolute pleasure.

Thank you. John Chodkin with Christian Credit Counselors has been our guest. You can find more about managing debt wisely at christiancreditcounselors.org. That's christiancreditcounselors.org. More to come on MoneyWise Live.

Stay with us. Delighted to have you along with us today for MoneyWise Live. I'm Rob West, your host.

This is the program where God's Word intersects with your financial life. We'd love to hear from you today. We have some phone lines open. We're taking your calls and questions on anything financial. We started today talking about credit card debt in the wake of the COVID pandemic. So many with reduced hours, really struggling, perhaps a job eliminated. If you find yourself in one of those positions right now, perhaps wondering what the path forward looks like, we'd love to hear from you. 800-525-7000. But perhaps you have another question.

You've been wrestling with how to save for college or retirement or how to get your credit score turned around or maybe it's what's the right lifestyle or how do you give more effectively. We'd love to tackle whatever you're dealing with today. Again, lines are open. Here's the number 800-525-7000. We're going to begin today in Homerville, Ohio. Beth, thank you for your patience.

How can I help you? Oh, hi. My granddaughter has been added to her parents' checking account as an authorized user. Any one of the three can sign. If the account got overdrawn, would her credit be affected?

It's a great question, Beth. And what you have to recognize is that with checking accounts, because that's not a loan of any kind, it's your money and you access it with a debit card, you're not borrowing for anyone. And for that reason, checking accounts are not included on credit reports. So even if they were to overdraw that checking account and it incurred an overdraft fee, that would not appear on the credit report. Now, there is a separate system apart from the three credit bureaus, Experian, TransUnion and Equifax, that's called checks systems. And this is, you might think about it as a credit bureau specifically for deposit accounts with banks and credit unions. They do track your activity, including overdrafts and bounced checks and unpaid negative balances and other issues related to checking and deposit accounts. And what it's used for is when you go to open a new bank account, not a take out a loan or a credit card, but a new bank account, you could be denied if your check system report shows a history of repeated irresponsible account use. And as an authorized user, that information would be reported to your granddaughter's checks systems report. But it would have to be a pattern. And again, it would be limited to a future checking account, which is not insignificant, but it doesn't mean and in fact, it wouldn't be reported to the credit report, which is what you and I typically think of that generates your credit score that's used for the purposes of determining whether or not and at what rates and terms to extend you a loan or a credit card of some kind.

Does that make sense to you though, Beth? I think so. Well, she already has her own checking account, which is probably good. Now, all banks have this check system. Yeah, it's an independent repository that the banks look to when someone is opening a banking account, a deposit account of some kind. And so they all go to check systems as one central place for that type of account activity that's tracked related specifically to deposit accounts, savings and checking accounts. So that's where that would be reported because as an authorized user, that information flows to her as well.

But again, that's different from the three major credit bureaus that we typically think of specifically that relate to loans like credit cards and mortgages and car loans, things like that. Okay, I believe I understand. Okay. Thank you very much.

Absolutely. And may the Lord bless you. Thank you for calling today. Phone lines are open 800-525-7000, 800-525-7000.

On to Austin, Texas. Phillip, how can I help you today? Hi, thanks for taking my call.

I had a question. I am 44 years old. I finished paying child support about five years ago. Since then, we've started a business, my wife and I, and we've been able to save a substantial amount of money a year, about around $30,000 to $35,000 a year with our business.

It's done well, thanks to God. I know if we just continue to save for the next 20 years, that's not going to be enough to retire on. And I know Roth IRAs, we can only put so much in annually. I just wanted to know what the best way for us to save or invest our money so we could possibly retire by the age of 60-65. We have about 85 in savings right now that we've just been putting in over the past couple years after we bought our first home two years after starting the business.

So three years ago, we bought our home, our first home. All right. Yeah. So what type of retirement accounts have you opened?

Just Roth IRAs for you and your wife? None. Oh, you don't have one at this point. Okay.

All right. And what kind of surplus do you have? I mean, I realize as a small business owner, you know, that's not necessarily consistent like it would be if you were a W-2 employee. But if you look over the past year and you think about, you know, once the bills are paid in the business, hopefully you guys are able to pay yourself, one or both of you, a salary. And then perhaps you're building up, you know, profits that can be then distributed to you. You know, when you look at that over the last 12 months after the bills are paid, but before any retirement contributions, what do you think you could put away on a 12-month basis?

Every year we've put away between 30 and 35 thousand after bills and taxes are all paid. Okay. And where have you been putting that? Into our savings. Okay. So what has that built up to at this point?

About, we're close to 90 between 85 and 90. Okay. All right. And do you have that earmarked for anything other than long-term savings retirement? No, what we thought was paying off the house early and paying off the house within less than 10 years and trying to buy another home and snowballing that and paying it off quicker and buy another home and retire off a couple of homes, but we just don't know if that's the way to go.

Yeah. I mean, I don't mind that it's another asset class, real estate performs well, but I do like you building up a base of a retirement account with stocks and bonds. And for you all, I think you'd probably want to look first to the SEP, I-R-A-S-E-P, where you can put away 25% of compensation or $58,000 for this year.

It's easy to maintain, very inexpensive. We've got to hit a break. Stay on the line. We'll finish just after this MoneyWise Live. We'll be right back.

Stay with us. We're grateful that you've tuned in to MoneyWise Live today. I'm Rob West, your host, taking your calls and questions. Here's the number 800-525-7000.

We have lines open 800-525-7000. Hey, before we get back to Phillip, who's been holding patiently, let me remind you, we can only do what we do here on MoneyWise Live each day through your generous support. Our partnership with Moody Radio and you allows us to bring you this program every day, along with our MoneyWise coaches, our certified kingdom advisors, the MoneyWise app, all of the content at moneywiselive.org. It's all available because you partner with us financially to allow us to serve you through this ministry. And if you would prayerfully consider supporting MoneyWise, a 501c3 tax deductible organization, we would certainly appreciate that. And we can certainly continue our great work because of that support. Here's where you go. Just head over to our website, moneywiselive.org. Just click the donate button and whatever the Lord would lead you to give, we'd certainly be grateful.

We're going to head back to the phones. Phillip has been holding patiently in Austin, Texas. Phillip is 44. He's got some resources freed up just having completed child support. He and his wife have a small business and have been regularly able to put away about 30 to 35 thousand dollars in surplus each year. But just getting started really in saving for retirement.

Good news, Phillip, is, you know, you've got still time on your side. You're not 20 anymore, but I would imagine you still have about 20 years to put some money away. And hopefully as the business revenues grow and you limit your lifestyle, cap your spending, you would have more and more that you could give with, but also save with. Now with that 30 to 35 thousand a year, I do like the Roth IRA, but as you said, you're going to be limited to 6,000 a year for you and your wife. So that's 12,000.

Beyond that, I would look to the SEP IRA, not really any kind of administration involved. So it's very low cost. And again, as I mentioned, you can put away for 2021, 58 thousand dollars or 25 percent of compensation. So it gives you a bit more room to save.

You'd get an immediate tax deduction and then that money could be invested in mutual funds or exchange traded funds. I like that as a base. Now, if you said, Rob, we also are interested in real estate.

We've done our homework. We know what it takes to be a landlord. Once we pay off our home, we'd like to accumulate a few pieces of property over time that we could rent out and over time, own free and clear and create an income stream. I have no problem with that. As long as you go into it with your eyes wide open, you have the proper reserves in place to weather a storm where somebody, you know, you don't have a renter for a while or you have some damage or, you know, you have some major repairs that you need to take care of to keep the property up to par, then I would say perhaps what you think in terms of, uh, Phillip is splitting that surplus where, you know, you have the regular contributions, 12,000 a year going to the Roth, perhaps even another five or 10,000 a year going into the SEP and then take the other and either accelerate the mortgage payoff on your primary residence or begin building up that reserve account, which maybe you start to tap the money you've already put away about 90,000, uh, to go ahead and buy that first piece of property.

But I would just go slow again and make sure you have a good financial base under you and you know what you're getting into and you have the time to commit to what goes into a more active investment like, you know, real estate investing versus a passive investment like stocks and bonds. But tell me your thoughts. Uh, I, I really appreciate, uh, all the information. Uh, I'm going to look into the SEC. I've never heard of that before. Uh, yeah, it's SEP. It stands for self-employed pension.

Yeah, but go ahead. SEP. And also I didn't know that my wife and I can each put 6,000. I thought we were limited to 6,000 since we filed married joint. No, no, it's, it's, uh, you know, an IRA is for an individual.

So there are no joint IRAs. And so, yeah, you would each with a spousal IRA plus, uh, your own, uh, you would each be able to put that 6,000 away in a Roth. Okay, great. And we'll, we'll look into that, uh, into splitting it. And also I'm going to look into the SEP and, uh, we'll, we'll just continue to do our homework and pray, uh, about real estate, um, owning. Yeah, I think that's a good plan. You can't go wrong as long as you keep the debt at a minimum and you make sure you have plenty of reserves under you, but I think you're on the right track.

Uh, so keep it up and, you know, the key is going to be for you guys to really control spending and, uh, you know, cap your lifestyle so that as you get more and more in the way of profits and ultimately distributions out of the business, you've got the ability to, you know, to save even more pay down debt and build your assets for the future. So Phillip, thank you for your call today for listening. May the Lord bless you in the days ahead on to Brooksville, Florida. Deborah, thank you for calling and holding today.

How can we help you? Uh, yes, I, um, have always taken out disability insurance on loans, credit cards, um, and even at work, uh, and paid, you know, on the policies faithfully. But what I'm finding is now that I am disabled, um, they're not willing to go ahead and honor these claims on the credit cards. Um, I mean, even with my disability for work, we went with short term. When that ended, they refused the long term and I have been certifiably in, uh, uh, through social security, uh, numerous doctors certified as disabled.

So where do I turn to try? Cause I'm even paying now for the insurance on these credit cards that they're refusing to honor the insurance policy. And what is the basis under which you're getting these repeated denials for this disability claims? Um, they're just challenging the medical portion of it.

And these doctors are, especially with COVID now, but even before that, the last thing they want to do is play around with insurance companies on forms. Um, yeah. Yeah. Well, I wouldn't give up. I mean, there's, there's nothing, uh, you know, this is really disheartening because obviously you paid good money for this. You'd make, you took the extra step to have a policy like this in place in case you needed it. And now when you need it to get a denial, obviously it's frustrating unless there are carve outs in the policy that, you know, you're not meeting the requirements for to, you know, be considered disabled.

I'm not saying you're not disabled, but to be considered disabled by the insurance company. Uh, did you buy these on your own through an agent, uh, Deborah, or was this through your work or where did you get these? Um, yeah, one that I had was offered to my company and I worked for a fortune 500 company, but these are separate insurance company, uh, just to throw names out, um, Hartford Liberty mutual, they're a big company. And, um, the policies were offered, you know, as third party insurance companies, but usually like with one of my visa cards, the visa company itself has put out this policy for you to pay for each month.

Sure. And so I'm paying premiums of up to $20 on these policies. And yet it's been a year and I still can't seem to be able to go ahead and, um, get these cleared now on the company's reliable to anybody insurance commissioners or, Oh, sure.

Yeah, it would be, you're exactly right. The insurance commissioner of each state, uh, would be ultimately where they're responsible too. And so you could certainly contact them, but I do a little bit more legwork and I realized, you know, you may have already feel like you've exhausted every option, but I'd contact, you know, the, the representative, every insurance company has a representative that, uh, you know, sources these policies. So who is the agent for the company, um, that, you know, was the one to bring these policies in and make them available. And you need somebody who can represent you and, uh, you know, act as your advocate, uh, who understands the nuances of the policy, what are the requirements, what are the triggers to allow these to be paid out and can help you navigate the system.

So I'd call the company and find out who you can talk to that can help you navigate this and let us know how it turns out. We appreciate your call. More to come on MoneyWise Live.

Stay with us. Thanks for joining us today on MoneyWise Live. I'm Rob West taking your calls and questions. In fact, in just a moment, we'll go back to the phones, but before we do it's Monday, which means here in this final segment of the broadcast, we're joined by our good friend Bob Dahl. Bob is chief investment officer of Crossmark Global Investments where investments and values intersect.

And Bob, great to have you back with us today. It seems like, uh, jobs were back in the narrative this past week. Tell us what's going on in the US employment scene. Yeah, I mean, amazing results, uh, Rob, back to the strengths that we, uh, saw earlier 943,000 and in at payrolls added in July and an upward revision in June just shows the payroll growth is, uh, picked up again. I think if we were to pick, uh, on the report, it was that average hourly earnings year over year cross the four handle more than 4%. Now that's good for the worker, but it also says there's some inflation in the system. You and I know that wage rate inflation is the most insidious of inflations because it's hard to get out of the system. So I come back that you and I have talked about in prior weeks. I'm not so sure this inflation is transitory.

Yes. Well, the Fed would have us to be believe this perhaps is going to be short-lived. As you've said for several weeks now, there certainly are signs in the data that, at least in sectors of the economy, if not on a more broad-based basis, it's going to be around for a while, uh, perhaps above their 2% target. Uh, what do you think over the next 12 months? Where do you think we'll be 12 months from now with inflation and hopefully below the four number I've just mentioned, but certainly above the two that the Fed shooting for low. So let's call it three to split the difference. 3% inflation in the long run.

Rob, you and I know is not the worst of all worlds, but it's not zero to two like it used to be. And therefore, what does that mean for investors? It means that 10 year treasuries at, uh, you know, one 18 or wherever we close today is too low, which means rates have to go up and bond prices struggle.

And it probably also means it has a headwind effect on the PE ratio, the valuation of stocks that's somewhat offset by the greater things had, but it becomes a bit of a headwind if we really have inflation more embedded at 3%. Bob, you've said this economy is incredibly strong. You mentioned earnings season, which 90% of those are behind us. Any new data there? And what are we learning about the consumer as of late? So, uh, yes, when it comes to earnings, we're almost finished with second quarter and astoundingly 90% of the companies beat in revenues and 90% beat in earnings.

They are records. Uh, but, but that's known by the market is part of the reason the market's done so well off the pandemic low. Let me throw a little, uh, um, uh, a fly in the ointment, if you will, third quarter earnings, as good as they're going to be versus last year are likely to be down from the second quarter and 2022 estimates seems like a long way off, but it's not that far or actually starting to come down a little bit as analysts have gotten too exuberant. So the, the path of least resistance for the economy and earnings is still strong, but my points are, it's not a one-way street anymore. And that's why, as you know, Rob, I've been arguing that the market's going to get bumpier and choppier. They're not cold words for a bear market. Uh, I don't think we're going to have one as long as the economies are this strong, but it's probably not going to go up at the pace we witnessed in the first half of the year. Yeah.

Yeah. Well, you, you've been saying that for several weeks now, the global economies transition from accelerating to more moderate growth over the next six to 12 months means muted returns for stocks. It doesn't mean we pull out of the stock market for any reason. We're still long-term investors with a properly diversified portfolio, but we need to be tempered in our expectations and you still maintain that position, right?

Exactly. And just be aware of the valuation of the portfolio you hold. You don't want all high PE growth stocks, the ones that have done so, so well. Again, not code word for selling. It's just saying, make sure you're not inordinately, have a more balanced portfolio is probably a better way to say it.

Have some international stocks, have some value stocks, have some cyclical stocks, just have that diversification that in most environments pays off. That's great, Bob. Well, we always appreciate you stopping by folks.

If you want to know where your investments and your values as a believer can intersect, head over to crossmartglobal.com and check out the portfolios they're building there and the incredible work they're doing to find value in their investments, but also make sure your values are reflected as well. Bob, good to have you my friend. We'll see you next week.

Thanks, God bless. All right, bye-bye. And back to the phones we go. By the way, we do have some lines open and I'm going to stay after a few minutes today. I've got a few extra minutes before I need to be home and so I love to take questions and we'll do a few off the air while I'm here in the studio.

The number to call 800-525-7000, Selma, Indiana. Brandon, you've been incredibly patient today. How can I help you? Yeah, I just wanted to call in today and share that we got some good news. My son's had an off to college here a week from this Friday and I've been listening to you guys. I was just reflecting as I was sitting here waiting that when I got out of college way back in 98, I picked up a Larry Burkett book on budgeting and that's where I started to learn how to budget. And so I've had different jobs over the years and kind of got behind on retirement saving just because our income wasn't where it needed to be over the years until the last few years. So I've been trying to really catch up on retirement, not been able to have a lot of extra to put towards my son's college fund.

And of course, you've always said it's easier to build up your retirement fund. There's other ways to fund a college education. So we took that to heart. And over the last year, his senior year, I just had him, I just challenged him. I'm like, you need to apply for all the scholarships that you can and go from there and see what God will do. Because I've heard your stories about your wife's college education was paid for through scholarships.

And so that was encouraging to us in our situation. And so he did that, and the school he's going to is out of state. So they were able to give him a lot of money through the school, which really knocked his tuition and room and board down to where it would be if he was still in state. And then he applied for several local scholarships here in our community, and was able to get those and got it within a few thousand dollars and got word the other day that he had been chosen for a scholarship. But then it also said at the very bottom, if you also had received this other scholarship, you're no longer eligible.

So it was kind of a bummer. But my son being he's not shy, he's very humble. And he follows after God. And he's like, and he's like, well, I'm gonna call him, I'm gonna see this is actually the bank that we belong to a scholarship to there. And he's like, I'm gonna call them and just see if I'm still eligible or not, you know, that's kind of a bummer.

He's like, because if I am, I'm going to be able to fund my entire freshman year. And so we did and he got back with him this morning. And they said, Yeah, we'll still give you the scholarship since you can still use it. Wow. That's incredible. And that was just him taking the initiative to make that call, right? Right, right.

Incredible. Well, you know, the bottom line is, you know, if you're willing to put in the time and the work, you know, you've obviously you've got to do your part and you know, getting through school with some good grades. But, you know, as you alluded to, Brandon, my wife, they turn their family room into a college scholarship factory applying for every grant and scholarship that was out there. And there's some wonderful books and resources that you can avail yourself of on Amazon and the library. But the key is you've got to do the hard work to go out and find it.

And there is money available. And you're certainly a testimony to that. So hey, tell your son congratulations. We're proud of him and excited for this new chapter of his life that he'll be starting. And we appreciate you sharing your testimony today. Very much.

Quickly to South Side, Chicago. Michael, how can I help you? Michael, are you with us? Hi. Yes, I am. I apologize for that.

Okay. So I'm being a servant here and I'm trying to help my mom out. She's a retiring position. She's way past the age of retirement.

And so she has a 457 plan and she's trying to kind of decide what's the best way to manage that. She still has a mortgage in her home. Can she pull money out, pay out the mortgage and get rid of it?

But will she be dealing with penalties because she's pulling it out? And if she does reinvest it into something like real estate, is there any way from a tax perspective, does that work for her? And so those are some of her concerns. And then she has enough kind of monthly income between the 57 plan, social security and everything that she qualifies for that she feels like she has a decent amount of flow coming in. But her concern is what's going out. And that's why I had made some suggestions around, let's kill the mortgage if we can. And it's her dream house. So she still wants to maintain it, even though it's a lot of house. So I just wanted to get your thoughts.

Yeah, very good. You know, I think that certainly is an option. I think getting that house paid off and reducing lifestyle and living expenses would certainly take some of that pressure off. You have the option absolutely to take out of the 457. This is a tax advantaged retirement plan specifically for state, local government, some nonprofits. And, you know, when you pull the money out, if you're beyond fifty nine and a half, you'll do so without a penalty. But it will be taxable. So she just needs to plan for that. And depending upon how much she is pulling out, she may want to talk to her or she should talk to her tax preparer, CPA about the best way to do that, to minimize the tax liability, specifically, you know, thinking about putting that over two calendar years so that she doesn't push any portion of that up into a higher tax bracket inadvertently. But that's certainly an option.

I think given the number of things moving around here, it probably would behoove you and her to visit with a certified kingdom advisor who's a financial planner just to look at all the pieces and parts and bring some advice on how to best put it together. Well, we appreciate your call today, Michael Teller. All the best in the days. That's going to do it for us today, folks. On behalf of my team, Amy, Dan and Jim want to say thank you for being here today. Thank you for listening. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media.

This is the program where God's word intersects with your financial life. I hope you'll come back and join us tomorrow. Lord willing, I'll be here. We'll see you there. Bye-bye.