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Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. Developing a budget isn't difficult if you know how much money you have to spend. But what if your income keeps changing? Then what do you do? Hi, I'm Rob West.
Companies are using more contract workers these days, and that often means irregular hours and pay. Well, budgeting on a variable income isn't hard if you know a few tricks. I'll share them with you 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 future. So first, let's talk about budgeting in general, and we like to call it a spending plan, which is actually a more descriptive term. You're planning what you'll spend. And here's why we do that, because spending less than you earn is the key to every financial success.
It's the foundation that everything else is built upon. It's nearly impossible to stay out of debt and save without a spending plan. This is a plan for your money.
It gives each dollar a job, and directs the flow of money in and out of your accounts. You'll never be able to maximize your giving and saving without a spending plan. And as a steward of God's resources, I think you have a stewardship responsibility. And this applies to everyone, whether you make a little or a lot. And it's really imperative for the Christian that you wisely manage the resources God has entrusted to you.
Proverbs 27-23 reads, Know well the condition of your flocks, and give attention to your herds. For us, that means knowing how much we have coming in and going out, and where those monies are directed. That's the key to this idea of the spending plan. We'll each have to give an account someday for how we manage money, so we need to have a plan. Now, the format you choose for your spending plan is up to you. You can use pencil and paper, or you can take a digital approach, and for that, we recommend you check out the brand new MoneyWise app in your app store. It will help you set up your budget using the tried-and-true envelope system. The MoneyWise app also has the best financial content from a host of Christian authors like Shanti Feldhahn, Art Rayner, and Randy Alcorn.
Download the MoneyWise app wherever you get yours, but I digress. No matter which approach you choose, begin by tracking your expenses for 30 days. Capture every expense, no matter how small. Then, think about the non-recurring expenses and add them in with a monthly amount needed to have what's necessary when that expense rolls around.
This would be quarterly insurance payments, annual homeowners association fees, vacation expenses, and your Christmas fund. Then, take that 30 days of actual spending, plus the non-recurring expenses I just mentioned, and build a budget by category. Again, the MoneyWise app will make quick work of that for you.
Once you take a first pass, you'll need to make a first pass. You'll need to do the hard work of bringing the budget in line with your income and making sure that your spending reflects your goals and priorities. If it doesn't, that's where you need to start cutting back and making changes. By the way, if you choose to use the MoneyWise app, you'll find its envelope system particularly helpful for controlling the flow of money in your discretionary categories, which are the typical budget busters because they vary from month to month. These are things like eating out, shopping for clothes, gifts, and entertainment.
You get the idea. You'll also have to decide who manages the budget going forward, husband or wife. Well, as you know, we all have different gifts and talents. Sometimes the more detailed, organized person is the wife. Sometimes it's the husband.
You've got to figure out what's the best approach for you. You can have one person being the bookkeeper, and I recommend that you do, but both spouses need to be in on the plan and the commitment to sticking with the plan. This is why we recommend and Howard Dayton, the former host of this program, recommended for many years that you have a weekly money date. This is where you come together each week to review the spending for the last seven days, make course corrections, and address the unexpected.
And of course, the unexpected is always going to happen. So we've covered the variable expenses. Now here's what to do about the variable income.
Start with what you do know. What was your average monthly income for the last six months? Can you reasonably expect to earn the same amount in the next six months? The goal is to arrive at a budget that can be covered by the average or slightly below average amount you expect to earn each month. In the months that you earn more, keep the excess in savings to fund the lean months. You may also want to consider depositing all of your income into savings and then transferring only a set amount each month for living expenses. Then every six months or so, reassess your average income for the period to make necessary changes to your budget.
And that's how you budget on a variable income. All right, your calls are next 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial future.
Delighted to have you with us on MoneyWise Live. I'm Rob West, your host, taking your calls and questions. Here's the number. We have lines open 800-525-7000. That's 800-525-7000. Whatever's on your mind today, financially speaking, we'd love to tackle it. We'll do it through a biblical lens. Again, 800-525-7000. We started the program off today talking about budgeting on a variable income, which certainly can be challenging when you can't count on a consistent amount coming in every month. We asked that question on Facebook. That is, what advice would you have for someone trying to budget on a variable income?
And got some great responses. Charlotte said, figure your lowest month and start off your budget based on that, covering necessities. As your month progresses, you can make adjustments to accommodate the other things you want to fund as the money comes in. That's similar to our idea that you'd take six to 12 months of previous income coming out of, let's say, a small business. You'd want to try to pay yourself at least a conservative minimum every month and then build your budget on that. As you make distributions over and above that, then that's the opportunity to fund other items like longer-term savings buckets, I would say vacations and things like that. James says six months reserves is key to budgeting on a variable income, and I think there's good wisdom in that. Gives you a little bit more flexibility since your income is obviously not steady.
So this can be a challenge, but it's not one that we can't overcome. Hopefully you got some good ideas today. And again, the MoneyWise app can help you with that.
Download it in your app store. Just search for MoneyWise Biblical Finance. All right, we're going to begin to take your calls and questions today on anything financial. Again, we have some lines open. Here's the number 800-525-7000.
We're going to begin in Wausau, Wisconsin. Beth, thank you for calling today. How can I help you? Hi. I just was looking for a second opinion about taking on a mortgage against a home that is debt free and investing that money. The financial person had told us to do that, that they would in turn pay the mortgage monthly, and then it would make us more money depending on what the interest rate is than it would cost us, and it was a great way to invest. Yeah.
I can tell you I'm not going to be a fan of this strategy, but let's get a little further into the details, Beth. What is your age and stage of life? Are you all working? Are you retired? We are semi-retired. I am 55.
My husband is 53. We currently have sold a business, so that was our plan to have stocked away ahead, and now we are just doing part-time jobs here and there as we want. I serve at a school, and we still both work for the previous business, but just kind of what we want when we want. Yeah, great, and through these part-time activities with the previous business and other things you're doing alongside that, that's enough to cover your lifestyle on a monthly basis? Correct. Okay, and what were you able to put away from the sale of the business, roughly? Currently we have about 1.5 put away. Okay, 1.5 million, and you own your home free and clear, and what's that worth? Correct. I would say probably about $750,000 for all the property. Got it.
Okay, and all right, very good. What do you all spend on average on a monthly basis? And I'm trying to establish, you know, when you're not working anymore, what you're going to need each month over and above social security, or let's start with the gross amount. Of what we need monthly? Yeah, based on what you're currently spending today, and then we could take a percentage of that.
Boy, I would say probably maybe $1,500 to $2,000 a month. Wow, that's it. So you have a fairly modest lifestyle, huh? We really, we really do try to. Yeah, okay.
Well, I guess here's the question. I mean, I'm not a fan really of this strategy at any point, but especially in your situation, I mean, you guys are really in a great spot where you should be thinking about or have the opportunity to be thinking about dialing back your risk, because we don't want to take any more risk than we have to. We want to take what you've been able to amass through hard work and the sale of a business, plus the diligence with which you've exercised using God's money to be able to pay off this home and own it free and clear. Through your modest living, you require very little on a monthly basis, and you're certainly probably covering that and putting some away just through these odd jobs that you have. And when you stop working entirely, which you could actually do right now, you could fairly easily throw off 50 or 60,000 a year from the 1.5 million and, you know, way over subscribe what you need for your monthly budget. So adding a level of risk by taking on a mortgage only to turn around and invest that when I think you should be dialing back the risk level and answering the question, how much is enough right now, I think is entirely the other direction. Now, I'm not saying your investment advisor has the wrong motivations, but you do also have to consider that when he or she gets the portfolio of this massive mortgage that he or she would be deploying for you, they're going to earn a fee on it.
So there's an incentive for you to do this. And I just think the loss of the peace of mind and flexibility, not to mention trying to outpace the interest rate with a stock market that's probably going to see much tempered returns, you know, over the next couple of years because of where we've come from, how high the markets are right now. And given some of the headwinds we have, notably inflation, most experts are saying, you know, equities are still the place to be, stocks, but we're not going to see the gains we have seen. And so those modest returns compared to the interest on the mortgage, not to mention the fact you're taking on a bunch of debt unnecessarily, I just don't see the risk reward paying off. And again, I think you all could be looking at an opportunity to stay very conservative if you want to have a risk portion of your portfolio for some growth because you all are still young.
That's fine. You have plenty of resources out there to do that as a portion of the 1.5 million dollar portfolio. And there's no need, in my view, to take on any debt just to try to get an extra one or two or three percent a year over and above, you know, the interest rate on the mortgage. So, I mean, react to that and give me your thoughts, but I just don't see any upside.
Well, that was my gut feeling. That's what makes me nervous because when you've been debt-free for quite a while, and I'm the bill payer, yeah, I just was very nervous to get back into any kind of debt even if they're saying they're going to pay it, you know. Well, right, but basically they're going to take a, yeah, they're going to build a portfolio with the proceeds of this mortgage and there's going to be a portion that'll be in, you know, very conservative stable investments or even money market or cash and they're just going to set an automatic draft right out of that account into the, you know, to pay the mortgage. The other thing you have to factor in is this is going to be a taxable account. So, all the gains or any gains that they get are all going to be taxable, which is going to further erode any kind of, you know, upside you have. And again, I think you need to be so conservative in this point in your lives just given where you're at and you don't have a need to be aggressive that, you know, we're not talking about a whole lot of margin there for you all to realize.
We are talking about you taking on a considerable amount of risk beyond what you are right now, having a home free and clear, and perhaps the only winner is the advisor that's charging the fee on, let's say, five or six hundred thousand dollars a year. I just don't like this and I really would question even the recommendation personally. Okay. All right. All right.
That definitely answers my question and gives me what I'm looking for. Good. Well, we appreciate your call, Beth. If you want to kick it around or your husband does at any point in the future, tell him to give us a call.
But God bless you. Thanks for listening and we appreciate your time today. We've got some lines open today, 800-525-7000, but we're going to go ahead and pause and take just a brief break. But again, whatever's on your mind today, we'd love to tackle it. Maybe it's savings or investing as Beth wanted to talk about.
Maybe you're considering prioritizing paying off the home mortgage or thinking about giving wisely. Whatever's on your mind today, give us a call. We'd love to talk about it, hear your story, and see if we can pull some principles out of scripture to answer your question. 800-525-7000. We'll be right back. Thanks for joining us today on MoneyWise Live. I'm Rob Lass, taking your calls and questions.
We've got some lines open, 800-525-7000. Hey, let me take the opportunity to remind you, if you're a part of the MoneyWise family and you've not given to MoneyWise, we would certainly love your prayerful consideration of donating to the ministry. We do what we do each day, bringing you this program, our coaches, our app, all the content on the web at MoneyWiseLive.org, and our CKAs through your generous support. It requires our listeners supporting this not-for-profit ministry. And so beyond the giving to your local church, if you would consider a monthly or one-time gift, we'd certainly be grateful, whatever amount you might be able to do. Just head over to MoneyWiseLive.org, click the donate button, and I'll say thank you in advance. We're going to head back to the phones today.
JC is in Miami, and JC, what's on your mind? Well, Rob, let me first thank you for your program and segue the giving comment that you just made. I was able to work with TD Ameritrade and to get them set up from my RMD, an automatic monthly check, to the radio station, to MoneyWise, and it's working out well, working out very, very well. The reason I'm calling is, it's one of those maybe too-good-to-be-true ads in the local paper. A financial institution is purporting to pay 2.76 for a six-month CD. I called the organization, basically they're CD brokers, and they shop the country for CDs and probably have a markup and then sell them, if you will, or exchange them. So I didn't know if you had any experience with so-called CD brokers.
Yes, and I'm a fan of these in the right situation. I mean, basically these are CDs, but as you said, they're purchased through a brokerage firm or broker, and they're similar to traditional CDs, but they're sold and bought on the secondary market. So one of the benefits is that that means you don't have to wait until the stated period of time ends for the CD because that secondary market allows a buyer and seller to come together, which means once you've purchased into these brokered CDs, you can also get out. So they have liquidity, which we don't typically think about in terms of CDs. The other thing you'll see is often, not always, but often you will have higher rates, but you do have to shop around. You can also get a bit more FDIC insurance if you're wanting to put a good bit of money.
Typically you'd get $250,000 per deposit or per bank, but because it's in a brokerage firm using perhaps multiple banks, you can get that number up and still have everything in one account. Now, they could potentially lose money because of the secondary market. So if, you know, is if you go to sell it, there's a chance that you could sell it for less than you paid. So it's, you know, ideal to keep it until its maturity rate to avoid that. You do also have to check JC the fees because although you wouldn't have an early withdrawal penalty in these brokered CDs, the fees for selling them can eat into the interest savings. So although the face value rate that you're being quoted, you know, may not include the fees that go into it, you know, into it. You also have to look at whether they're callable. So in other, you know, in some situations these CDs can be called back before their maturity. So I think you just need to understand what you're getting into, understand what the fees are and how that's going to impact the return you're being quoted and why you're doing it.
Because if you're not going to hold to maturity, again, this idea of it being sold on the secondary market puts you in a position where potentially, you know, you could lose money even though the underlying investment is protected by the FDIC insurance, that secondary market creates the potential for loss even though it would be on the more conservative end of the risk spectrum. Does that answer your question though? Yep, it does. And it does help me evaluate the risk factor and the cost factor and the markup factor. But I'm going to pursue that and see where it goes. I just want to comment as well I've been using the Larry Burkett Money Matters CD-ROM for about 10 years.
And the envelope, the envelope system, you know, using the even the CD on the computer, it works just fine. But I may explore your app and see where that takes me. Oh, I'd love for you to. And here's the thing, we've got a lot of folks. It's been amazing. We've been connecting with dozens and dozens of old money, not that they're old, but the software is old Money Matters CD-ROM users that are saying it's not supported anymore.
We love it, but it's antiquated. And we'd love to walk with you in that process. We do 30 minute workshops, three of them a week. And we could actually help you understand where it's similar, where there's some changes and actually help you migrate over at the very least just to test it out, JC. So if you download the app in the App Store, be sure to sign up for one of those free 30 minute sessions.
Tell them you're a Money Matters user, and we'll walk you through everything you need to know so you can see how it really is a modern version of what you have been accustomed to there all the way back to Larry Burkett, okay? That's great. Thank you very much.
Yeah. Hey, one other thing, you stay on the line. We'll give you a six month pro subscription. Amy will get your information and we'll get that for you just as our gift for you to get started and check out the MoneyWise app.
There's an automatic automatically a two week free subscription trial period, but we'll extend that JC for you up to six months. And thanks for your call today. Thank you for your giving to MoneyWise Media. We're certainly grateful and using a qualified charitable distribution is a great way to go. Folks, if you haven't checked that out, it's an opportunity if you have a RMD every year to do your giving, satisfy the RMD and have no tax, which means you get a bigger deduction and God's work through the ministries you're supporting ends up receiving more money.
It's a beautiful thing, a qualified charitable distribution. Taking your calls and questions just after this break, 800-525-7000. Stay with us. We're grateful you've joined us today on MoneyWise Live. Rob West taking your calls and questions today, applying God's wisdom to your financial decisions.
We'll be going to Julie in Hollywood, Louisa in Miami, Pam is in Indianapolis, but first Glenda is just north of me in Nashville, Tennessee. And Glenda, how can I help you? Can you hear me? Yes, ma'am. Okay, so I have 26,000 in savings and it's in a credit union and I'm thinking there must be someplace else, it could be earning some additional dollars instead of just sitting there in the savings account. Sure. Glenda, would you consider this 26,000 your emergency fund or has it been earmarked for some other purpose?
It was not. Well, about 3,000 of it is actually growing, a growing account and one separate account that when my, one of my grandsons just graduates, he'll be able to use. But it's based on monies that I put in there every month. And then the remainder of it is my emergency. I see. And I'm retiring in September. Very good. All right, and do you know what interest rate you're earning annually there in that CD?
Oh my goodness, no, I actually don't. Okay, I would check that out. You know, the credit unions and I said CD, I meant savings account at your credit union. Credit unions, you know, typically have higher interest rates on their savings over and above the traditional brick and mortar banks. I prefer just because nationally the credit unions, you know, are in different regions and pockets and, you know, one might have a phenomenal rate and another might be lower. So I tend to recommend here on the program the online banks just because, you know, you can access them no matter where you're at. And so, for example, Marcus, one of my favorites, marcus.com, which is the retail arm of Goldman Sachs, they're paying half a percent, so 0.50 percent. So, you know, that is not a huge amount, but it's better than, you know, 0.02 or 0.04 that you might see at a traditional brick and mortar bank. And those rates will be moving up as interest rates move up. So I would look at either Marcus, Capital One 360, or Ally Bank. You'll typically get about a half a percent, maybe a little bit more, with any of those three. There's no fees.
They have a great, you know, great website. You can link them to your checking account and it's going to be FDIC insured, so it's protected. But the starting point, Glenda, is just to see what you're already getting at your credit union because if it's the same or more you might as well just stay there with what you have.
But if they're not paying a whole lot, then I might consider moving to one of the three online banks that I mentioned. Does that make sense? Yeah, and so also, as far as this show is concerned, is there a repeat of the show online somewhere? Yes, ma'am. The program, if you just go to our website, MoneyWiseLive.org, you know, within a couple of days this program will be back up. And if you give your information to my producer, Amy, I'll make sure you get a link to this as soon as it's available. We can send you an email.
Does that work? Okay, that's great because I'm in the car. Okay, yeah, no problem. We'll get that information to you.
You just give us your name and an email address and we'll get it right out to you. And Glenda, thank you for calling today. You drive safely.
To Indianapolis, Indiana. Pam, thank you for holding today. How can I help you?
Hi, thanks for your ministry. I had two questions. First one is just something I heard on the radio about needing title insurance. And it sounded kind of scary, like identity stuff and they get your title and can mortgage your house and you don't even know it.
So I haven't looked into it. I just thought, do you know about that kind of thing? Yeah, now title insurance is something that you absolutely have to have.
And if you, you know, you typically got it when you bought your home or took out the mortgage, which you're probably referring to is something that we've seen a lot of advertising for lately, which is title lock insurance. Does that sound like what you were hearing? Yeah, that's what I'm hearing. Yeah. Okay.
Yeah. So that's different and completely unnecessary claims to protect you from someone signing a false deed transfer at the county courthouse. But here's the thing, you can't lose your property that way because the transfer is invalid. If the identity thief takes out a loan on the property and the lender attempts to foreclose, which they probably wouldn't even try, it wouldn't stand up in court because it would be unlawful foreclosure because you're the rightful owner and you didn't sign anything. It was transferred fraudulently.
You could also check with your county because a lot of times that information is available online so you can monitor that yourself. But this idea that you need someone and that it's even possible to, quote unquote, lock the title to your home is really a faulty idea and paying for that service on top of that, I strongly discourage you from doing. So I would just respectfully pass.
But title insurance that protects someone from challenging your ownership or preventing you from access or using your property through other means, such as denying an easement, that type of thing. Absolutely. You need to have it, but you probably already do. Does that make sense? Yeah, that makes sense. Do you have time for my second question? I sure do.
Yeah, go right ahead. The other one was I owe $12,000 on my house. I'm 64. I want to get it paid off as soon as I can. I could cut down my hours or retire. So I see advertisements for zero fees to refinance. Usually, you know, they want to you to borrow more than $12,000. But I thought I could borrow it, turn around, put it back on the mortgage. I haven't looked into all the details.
I didn't know what to look for. And should I even worry about that? What is your current interest rate, Pam? It's like $2.9.
Yeah, yeah. No, I don't think you're going to want to do this. You're not going to save enough in the interest. Number one, the balance is so low, it's going to be problematic for you to do it for probably any less than $50,000. And there's going to be a period prior to which you can even pay that down, you know, in some cases. And you're going to be paying interest on that. And your balance is low enough and that interest rate is phenomenal that you're just not going to see the benefit. So I think your opportunity right now is just to focus on obviously getting that mortgage paid every month, but then to the extent you have a surplus, just adding that to the monthly payment, getting that principal coming down, you'll get that paid off in no time.
But the cost and complexity and really the challenge with the size of your mortgage that you'll face in even getting that refinanced is just going to be cost and time prohibitive. Okay. Okay.
That relieves some worries. I just want to make sure I'm doing the right thing. It sounds like you are, but I appreciate you checking with us. And I think you're certainly headed in the right direction. We appreciate your call today. Well, folks, we've already covered quite a bit of ground today, really looking at a host of topics from refinancing to saving and investing, paying down that home mortgage.
And that's what we do here on MoneyWise each day. We have some lines open. If you have a question you haven't gotten through today, we'd love to hear from you.
800-525-7000. Hey, before we head to our next break, let me just remind you quickly, we do have MoneyWise coaches available that would be delighted to serve you. These are men and women who have been trained to really help you develop a spending plan, teach you some of the biblical concepts around money that we talk about here on the program. It's their ministry. They love this and would be delighted to journey with you and answer your questions. Just head over to our website to connect with a coach. There's no cost for the coach's time.
It's their ministry to you. There may be a small charge for the workbook, depending on what your needs are, but just click connect with a coach when you go to MoneyWiseLive.org. Again, MoneyWiseLive.org. Hey, stay with us. Still much more to come on this edition of MoneyWise Live. We'll be right back after this break. Stay with us. This is MoneyWise Live. We're so glad you're with us today.
I'm Rob West, your host. This is the program where we believe God owns it all. The earth is the Lord's and everything in it. We're stewards or managers of God's resources.
And we're told in scripture that we're to be found faithful in that. And money then becomes a tool to accomplish God's purposes. It's not an end. It's a means to an end.
And guess what? When that end is something other than us, it's an incredible opportunity for us to be a pipeline into God's activity. So God's provision doesn't stop with us. You know, in this program, we also recognize that God's word is replete with wisdom that we can apply to today's financial decisions. There's incredible timeless principles in those 2350 verses that tell us we should spend less than we earn, that we should live with contentment and avoid debt, that we should have some margin, precious oil and treasure in the house of the wise, that we should set long-term goals. And perhaps above even all of that is that we should give generously. And as we live that way, it brings freedom and joy and contentment and peace of mind. That's what we're after here today so we can serve the Lord more fully. Thank you for joining us in that journey. Let's head back to the phones today.
In Miami, Florida is Louisa. How can I help you? Yes, thank you for taking my call. I am 68 years old. I was intended to retire and I changed my mind and I'm going back to work full-time. And then I received money from Social Security, about $2,600 a month, plus I have $40,000 on my IRA at work. And I'd like to know, since I'm 68 and I'm receiving my Social Security, is that a problem if I continue to work full-time? No, it isn't, Louisa, because the rule says that your benefits, your Social Security benefits, are only reduced if you sign up to receive them before your full retirement age.
And then you have to earn above $18,960 a year. At that point, your benefits would be reduced by a dollar for every $2 you earn. But none of that applies to you because you've reached your full retirement age. There's also a second benefit here by you continuing to work. If you earn enough to impact what's called your high 35, meaning your highest Social Security eligible wages during your highest 35 years of your working life, then you're going to replace some of those years among the 35 that you earned less. And by doing that, you'll actually see a bump in your current Social Security check. Now, if you're not earning an amount annually that would be higher than any one of those highest 35 years of earnings you have from the past, then it's going to stay right there the same.
Certainly won't be reduced, but you actually have the benefit or the opportunity to increase it if what you're earning over a 12-month period is higher than any of those high 35 that were used to calculate your current benefits. Does that make sense to you? Yes. Okay. But the bottom line to your original question, you can continue to work no problem. So I can continue to work with no problem? Yes, ma'am.
Okay. And the money that I saved from work that the work saved for me, the $40,000, do I take it out or leave it there? Where is it currently? Is it invested or is it just in a savings account?
Where is it? No, it's with my job, IRA. Oh, it's in an IRA. Okay. Is it in investments? Yes.
Okay. You know, it just depends on where it's invested and whether the investments that have been selected are appropriate for your age and risk tolerance. So I would either have somebody at your job who is a plant administrator, somebody who works in HR, who could connect you to a representative from the brokerage firm that's holding this that could advise you. If not, you could connect with a certified kingdom advisor there in Miami and ask that they review it. I don't have a problem with you leaving it there. In fact, if you don't need the money, it'd be good for it to continue to grow. But I'd love to have somebody look at it and say, is it appropriately invested for somebody 68 who's still working and do we need to take less risk and get more conservative? That would be the question that I would want somebody to look at.
So if you need a certified kingdom advisor there in Miami, just go to our website, MoneyWiseLive.org and click find a CKA and we appreciate your call. To Cleveland, Ohio, WCRF Ed, thank you for your call today, sir. Well, thank you, Rob. Basically, it seems like you're really busy today.
But my question is, I try to make it quick. One of my credit cards was hacked. It was Citicard.
I don't know if you can say the brand name or whatever like that. But basically, they notified me immediately. They did a great job. Now, there was about $3,100 in fraudulent charges that were obviously, were caught because they asked me if I made them and I said no.
And they were bombed. Okay, so my question is, can the merchants who are like out of services and money, can they take any action against me? And will this affect my credit rating?
No, this shouldn't have any impact on you. You were notified of it. You confirm that they are, in fact, fraudulent. Sounds like that was done on a timely basis.
And in just about every case, that's all you need to do. The issuer will investigate it. And once they're satisfied, the charges will be removed from the account. In the meantime, they would obviously, and I'm sure they already have, issue you a new card with a new number. Shouldn't have any impact on your credit score or your credit report. You can also go to identitytheft.gov to report the hack and get more information.
But you probably don't need to. It sounds like your credit card company did exactly what they needed to do. And you responded on a timely basis, which is the key. Well, thank you. And there's no action that the merchants can take against me?
In other words, can they say they want the money regardless? Okay. No, no, not against you. That's really between the credit card issuer and the merchant.
The fact that this was done fraudulently and there won't be any impact on you whatsoever. Have a great afternoon. All right, Ed. Thank you for calling today. God bless you, sir.
Let's head next south to Hollywood, Florida. Hi, Julie. How can I help you? Oh, good afternoon.
Thank you for taking my call. I'm 63 years old and I have some extra money added to the CD, but the percentage was so much. So I received whatever, but now I have between five to 10,000. I just want to put it, not no more savings. I want to put it somewhere that I can earn a little bit more. I know a lot is not.
Yes, it is not. Well, what would you advise? Yeah, the challenge is in order to get more than, you know, you're and I realize why you're not satisfied with what you're seeing with CDs or savings accounts, but in order to get more, you're going to have to add a layer of risk to this. And I think in order to do that prudently, you need to have a time horizon of seven to 10 years. You know, if you want to avoid losing, you know, the potential of losing money again, it doesn't mean it's guaranteed even if you wait seven to 10 years. But we typically don't want to invest on a basis shorter than that because in any given period of time, we could have a recession, the market could be down quite a bit and you could lose money. So I guess that would be my first question is, is this five to 10,000 over and above your emergency reserves? And secondly, are you willing to lose money? You know, are you willing to take risk and invest this with the right time horizon?
I don't mind taking life you definitely have to hurry. But at my age, I retired prematurely. I'm on disability.
And I just have to know, you know, I'm very conservative. So I have to take a risk. A lot of my principal is not being touched.
That's my big thing. Yes, well, the problem is that the only way you can guarantee the principal is not going to be affected is by staying in something that's FDIC insured like a savings account or a CD. Is this really the extent of your emergency savings? Or do you have an emergency reserve in addition to this five to 10,000? Yes, I have some emergency because with the the FRS, Florida retirement, and then I have a 403D that, you know, so those, you know, that's just a little extra in case, you know, a rainy day or, you know, something that I don't have to really keep going into. Well, if all of your reserves though, Julie, are tied up in a retirement account, I'd really rather you keep this. I mean, we typically say, you know, six months, at your age and stage of life, I'd love for you to have at least six months worth of expenses in a liquid guaranteed account, which is really just a high-yield savings account. So that's going to be my best advice for this money given that the rest of your money is tied up in retirement accounts and probably already invested. So I'd use Marcus Capital One 360 or Ally Bank. You'll get about a half a percent a year. It'll be protected.
You won't lose any money on the principal. You won't earn a whole lot, but it'll be there if you need it and that would be my preferred approach. Quickly to New Berlin, Wisconsin. And John, we just have a few minutes today.
How can I help you? I just wanted to ask you, Rob, your advice. I've got two deferred annuities and I'm looking at those to reduce costs. The plan is to hold those ultimately for charitable because the amount of deferred income tax. But do you have any suggestions for any low-load funds? I'm currently with Transamerica and Fidelity. And just by switching within Fidelity, I see I can reduce my mortality and expense ratio from 0.8 to 0.1. So any other suggestions that you would have?
It's a great question, John, and I think you're headed in the right direction and asking, you know, the right questions. Unfortunately, I can't give you any specific recommendations for annuity contracts over the year. So what I would encourage you to do there in Wisconsin is connect with a certified Kingdom advisor, perhaps a couple of them, and ask them to give you some other alternatives to look at as you look at reinvesting these annuity contracts for the future. I think, you know, they could give you some great ideas.
Just go to our website MoneyWiseLive.org, click Find Us CKA and connect with at least two that would give you an opportunity to have some other alternatives. We appreciate your call today, John. I apologize for not having more time.
That's going to do it for us. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I want to say thank you to my team, Eric Tidwell on phones today, Amy Rios producing, Dan Anderson engineering, and Jim Henry providing excellent research. Thank you for being along with us today. I trust you found some value here and you'll come back and join us tomorrow. Lord willing, I'll be here. I'll look for you then. May God bless you. Bye-bye.
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