More Money Than Month

One listener that stands out that I worked with recently was this older couple that was interested in refinancing. They reached out to a few different lenders and you know their credit wasn't the best. I know some of these other bigger banks, you just won't hear back from them, which I cannot stand. Not everybody has the 780 credit scores and never had any hardships in their life.

I'll walk you through what you have to do. How can you end up being able to do this refinance, whether it's two, three, six months from now? Back to that older couple, we worked with them for months and months.

to improve their credit. And we were able to get the loan done. We were saving them hundreds each month, thousands of dollars a year finally got themselves into a situation financially that they can handle and they could start saving money each month saving for retirement.

At the end of the day, they just could not be happier, which just put a huge smile on my face. We are United Faith Mortgage. Look up the word margin in a thesaurus and you get some great synonyms, surplus, extra, latitude, for example. When it comes to your finances, they all mean one thing, having more money than month.

I am Rob West. To get that margin, you need more income than outgo. I'll talk about that first today and how it impacts your life. Then it's on to your questions at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live. Biblical wisdom for your financial decisions. and often a commission on top of that. Transportation people have to get the product to the retailers and they need to be paid. Then the retailers have to mark up the product because they have bills to pay and need to make a living too. So you've got several business entities involved in getting that product to where you can purchase it. And at each step along the way, the manufacturer, trucker and retailer all need to have sufficient margin or profit to make it worthwhile for them or the product never gets to you.

Now, how much is sufficient? Well, it varies depending on the product and how much it costs to bring it to market. Other factors play a role as well. Competition, market size and volume. You see, the more units you sell, the smaller your margin needs to be. A new automobile has thousands of dollars of margin, but a lot fewer of them are sold than, say, cans of chicken noodle soup.

With soup, you may have 50 cents of margin, but if you sell 10 million cans, well, you're probably going to stay in business. So how do we apply this lesson to our lives? Well, the same principle holds true when it comes to our margin and not just for money, but for our time and energy as well. How much do we have left over after all of our obligations are met? You have your job, family commitments, chores around the house and obligations to your church.

You must also prepare for unexpected or irregular expenses like broken plumbing, car repairs. All of these involve time, money and effort on your part. Do you have time and energy left over to recharge your batteries and spend time with God?

That's another form of margin that we all need. To be clear here, I'm not lumping time with God into your other obligations. That's not just something to check off your to-do list. Time with God isn't something we have to do. It's something we get to do, and it's critical to living a balanced life with our time, family, service to the Lord and, of course, our money. Now, what does having margin with our personal finances look like? Well, it simply means having extra for the so-called rainy days, family emergencies, medical expenses above your deductible, or helping a visiting missionary or college student if God speaks to your heart.

The key to acquiring that margin is living on a budget or spending plan to help you decide in advance where your money will go. Did you know there are only three things you can do with money? Spend it, save it, or give it away. Every dollar you've ever made or will ever make goes into one of those three buckets. A budget is just a way of deciding ahead of time what goes where. By the way, this isn't the same as balancing your checkbook, for example. That's just seeing where your money went, not deciding in advance where it should go. By the way, if you haven't downloaded the free MoneyWise app yet, we encourage you to do so. It uses the envelope system, and it makes budgeting easy.

Get it wherever you download your apps. If you're not making those spending decisions ahead of time, it's almost a certainty that your income won't be able to keep up with your outgo. As you set up your spending plan, you may see that you have more month left over when the money runs out.

Well, then you've got to make some changes. Find a way to increase your income or reduce your outgo, your expenses. If you need help with that, go to MoneyWiseLive.org and sign up with one of our volunteer coaches. They can help you make your budget work. The key is learning to live on less than you make, having margin, having money left over at the end of the month. Without it, you'll slip into debt and never be able to save for the future. And when you finally get financial margin, you may find that you also have more physical and emotional margin.

You'll sleep better, feel more relaxed, and better able to use your spiritual gifts to serve God and help others. So that's the importance of margin. This key idea that we talk about often, living on less than you earn, is the foundation to every financial success. And that begins with a plan, more specifically, a spending plan. So hopefully this is helpful to you today and an encouragement for you to get started on that budget. Your calls are next.

800-525-7000. We'll be right back. Thank you for joining us for MoneyWise Live today. I'm Rob West, your host.

So glad to have you along with us today. In just a moment, we'll begin taking your calls and questions. We've got some lines open. Here's the number 800-525-7000.

That's 800-525-7000. Whatever's on your mind today, whether it's giving or debt, savings, or perhaps even how you can reduce your debt and improve your credit score. Whatever you're thinking about today, we'd love to tackle it, talk about it. Perhaps you're really struggling right now. I'd love to be an encouragement to you. Or maybe you have a surplus, wanting to know what God's heart is for handling more than you need.

And everything in between. 800-525-7000 is the number to call. Hey, before we get into your calls today, let me let you know about something that's coming next week. Next week, we launch our weekly MoneyWise Digest. This is going to be a weekly email that you'll receive free of charge.

There's no cost to it. And it's going to feature the very best content that we've loaded into our content library that week. So we have content coming in all the time from National Christian Foundation and Art Rainer and Gospel Patrons and Generous Giving and Soundmind Investing and Compass Finances God's Way.

All the leading voices in Christian finance are feeding content into our library every day at MoneyWiseLive.org. Well, we'll curate what you believe is the best content based on what's trending and we'll put it in our weekly digest so you've got it all in one place. If you'd like to have that delivered to your inbox each week, we'd love to get that to you. It's as simple as creating a free account at MoneyWiseLive.org. Just scroll to the bottom of the page. You can create an account in seconds and that will automatically sign you up to receive our weekly digest.

If you want to understand God's heart related to money, reading these articles, watching these videos, they're quick reads, you will begin to reorient your heart around God's way of handling money as opposed to the world's and I couldn't encourage you more to do so. Again, MoneyWiseLive.org is the place to go create a free account and we'll get that to you each week. All right, let's dive into some phone calls today. We've got just a few lines left, 800-525-7000. We're going to begin. And Chicago, Illinois, WMBI, Tanya, thank you for calling. How can I help? Thank you, Tanya, for taking my call.

I want to talk really, really fast. With the pandemic going on right now, sir, many churches closed, like for example, my church closed and so what happens is you end up going to other churches. And my question is, who do you pay your tithes to? I don't know if it's right to eat at Burger King and try to pay McDonald's. I mean, is it wrong to split your tithe?

And finally, who does the church money belong to? And you can disconnect me and answer the question so you can get us a call. All righty. Thank you, Tanya.

I appreciate your call. Well, you mentioned the tithe, so let's start there. You know, obviously a tithe, which by the way, the reason we talk about 10% as a tithe is because the tithe, the word, literally means a tenth. And so giving a tithe or a tenth of your first fruits to the storehouse, which in the Jewish days of the Old Testament, the Jews would give to the temple. And that was clearly a part of the Old Testament law. Now, there was multiple tithes, so it ended up being more like 23%.

But we certainly see that clearly. And that idea of the tithe even preceded the law. We see that with Abraham and Melchizedek. We certainly see reference to the tithe in the New Testament by Jesus and others. Now, a lot of folks will say, well, we're no longer under the law of Moses. And you'll certainly find differing opinions by pastors and theologians regarding whether the idea of the tithe is still the minimum standard for Christians today.

So what is our approach here at MoneyWise? Well, we take the approach that the bar has been raised for New Testament believers living under the grace of Jesus shed blood on the cross for mankind. So why not start where God had his people start throughout the Old Testament? The tithe is clearly a tangible expression of our dependence on God and our desire to put him first. Because when we give first fruits, as we read about in Proverbs 3, 9, we're saying we want to give our first and our best to the Lord because we recognize that everything comes from him. So I like to say, what if the tithe is the beginning point?

What Randy Alcoran calls the training wheels of giving. And then we try to go beyond that with free will giving so we can experience the full joy of being a part of God's activity in the world. Now, if we're going to do that, and I think ultimately that's between you and the Lord, clearly we read in the New Testament, we don't want to give out of compulsion, but we want to give cheerfully as the Lord leads. So it's between you and the Lord. But if you were to say, Tanya, I want to begin with the tithe, I want to give a tenth of my increase, whatever provision passes through my hands in a month, I'm going to build that right into my plan.

I'd say that's great. Now, where do you give that? Well, again, if we go back to the model from the Old Testament, the storehouse, the temple would be most closely aligned today with the place where God has planted us. Our local church, which was clearly part of God's plan to take his message to the ends of the earth until he returns to claim those who have trusted in him. And so I think we should be giving to our local church first, and then we should absolutely be giving beyond that as we align our passions with the needs in the world and where God is at work.

Now, you raise an interesting point. Well, what if I'm between churches or, you know, my church is closing and I'm looking for a new one? Well, we don't want to be legalistic about it. Again, it's about giving. It's not that God needs our money. It's about giving as something that we give out of a desire of our heart, out of obedience. It's an act of worship, and clearly it's to be a part of funding the work of the local church. So if you're between churches, I would say perhaps you break your tithe down to a weekly tithe, and maybe wherever you're worshipping on that Sunday, that's where you give your tithe. But at some point, we need to be planted in a fellowship with a body of believers that we can be committed to, to do ministry, to be gathered with the saints, to worship, and to grow in our faith. And whenever that time comes that you're planted somewhere, I would say give your tithe there. So hopefully that's an encouragement to you today. Again, we don't have to be legalistic about this, but I think we should orient our hearts to say we're going to give to the church first. Wherever God has planted us, and that may change over time, and then we'll prayerfully give beyond that. Here's the thing.

When you experience the joy of giving, I have experienced that you will begin to reorder your finances in such a way that you can do even more because it's just so much fun to give. So Tanya, thank you for your call today. You raise a great question.

Let's head to Indiana. Sue, thank you for calling. How can I help? Hi, can you hear me? Yes, ma'am. My question is, I've been in a relationship for a while, and in the beginning, my partner who became the Beyoncé wasn't making a lot of money. So what ended up happening is there became a situation that I was doing making the money in the relationship, and so what happened is I'm carrying the full weight of the relationship, so financially, it's exhausting and it's strapping me, and I don't know if it's a sound thing to continue to do because it's just going to weigh down. You're talking about two people, and now my income is basically going to be stripped and divided in two, basically, if we were to get married.

Yes. Sue, why do you believe that your fiancé is not working, earning anything that can contribute at this point? I believe he is, but the situation is his money is not enough to sustain the both of us at all. Well, clearly, as you think about and pray through God's plan for the two of you, you all need to be talking about all kinds of things as you were to prepare for that, both your spiritual walk and how God has prepared you and what it looks like to join together as one flesh, but that certainly needs to include your finances as well. Because keep in mind, when two become one, that doesn't include everything except the money.

It absolutely includes the money. And so when you bring your finances together under the Lordship of Christ as one flesh, you need to be prepared for that as well. And so there's a lot of discussion that needs to go on about what was money like growing up and how are we going to handle money and what lifestyle has God called us to, and what about the value of work and what is our budget going to look like and how much are we going to give and save and what goals do we have. And as you begin to talk about that, I think you'll begin to get a clear picture as to where you're headed in that area.

And there may be some things to work through here. I would want for you to understand what his plans are moving forward to be able to earn enough to provide. Now, you all may decide that you're both going to work or not, but you need to have a clear understanding of that going into it. And I believe you need to work it down to the level of actually having a spending plan to say, OK, what income sources are we going to have and what kind of lifestyle will we have as a result of that? Can we meet our obligations? Is he bringing debt into the picture or are you?

And are you going to be able to save for the future? I mean, I think having an understanding of all of these things, praying through that, talking through that together is critical to make sure that this is, in fact, a door that the Lord has open and leading you to proceed into. And at the extent that there's not an understanding and a meeting of the minds there, then perhaps we need to push the pause button and just kind of take your time to say, is this the right direction?

And are there other things going on that perhaps you both need to be aware of? Because remember, money is just symptomatic of our hearts. Ultimately, the money is the way we work out what's important to us, our values and our priorities. And so I would use kind of the money conversation and what you uncover there to really get down to the heart of the matter in terms of where God is taking each of you and then obviously together as a married couple, if that's the direction the Lord leads. So at the very least, I'd see some warning signs here. Perhaps the next step, Sue, would be to reach out to one of our MoneyWise coaches who could work up a plan with the two of you.

Somebody who's kind of a third party that could speak into it, teach you all some of these biblical principles we talk about here, but also help you put together a budget. And I think that will be revealing as well. So let us know how this turns out. This is MoneyWise Live. We'll be right back. Delighted to have you along with us today on MoneyWise Live. I'm Rob West, your host.

We've got some lines open. We'd love to hear from you today taking your calls and questions on anything financial. Here's the number 800-525-7000.

That's 800-525-7000. Hey, let me remind you, if you haven't downloaded the MoneyWise app, we'd love for you to do that. You can access broadcast archives of this program, not to mention all of our content, our money management system where you can track and plan your finances and then ultimately manage everything in a digital envelope system where everything's downloaded from your institutions. You can also post questions in our MoneyWise community and get answers from our coaches. You can find a CKA as well. It's all in the MoneyWise app. Get it wherever you get your apps.

Just search for MoneyWise biblical finance. All right, back to the phones. 800-525-7000 to McHenry, Illinois. Hello, Beverly.

How can I help? Hello. My question is this. I have four annuities and I have to take RMDs from those and my financial advisor said to take the total of my RMDs out of one account and he advised which account I should do that. And he did not tell me this account, so he wasn't totally familiar with the characteristics of the account. And when I did that, I suffered a $1768 penalty. And I was just wondering if he might be expected to make some financial amends for this. Yeah, I mean obviously I don't know all of the details as to how this went down and what the communication was, but clearly if his direction was as a result of not having a full understanding of what he was directing you to do and that resulted in penalties that you weren't aware what happened and perhaps he wasn't either because he didn't take the time to understand what he was advising you to do, then clearly he's at fault there. And I would at the very least make him aware of that fact and see how he wants to handle it. Most of these firms when there are errors like that, they have a way to make restitution and put everybody back on an equal footing. But it will involve you having to make that known to him and then perhaps write a letter that would then get passed on and the firm would then decide how they want to handle it.

So yeah, I think at the very least, Beverly, just given what you've described, it's worth a conversation. Have you given him a chance to respond to your concerns that you just described to me? Well, he did try to get the company to make some changes in their policy, but of course they can't.

And so that's what he did. Have you raised this idea of him or the firm representing him covering this fee on your behalf? No, I haven't yet. Okay. All right. I would do that.

You know, keep in mind, I mean, you could start with just a conversation. If you write a letter expressing your concern over the advice you were given that resulted in these penalties that were unknown to you and you believe also to this advisor when he made the recommendation. If you write that in a letter, it has to be passed on to the firm. That's just part of the rules and regulations where you have to make these complaints known.

And at that point, it would start a process to look into this to see what was actually advised, what's the documentation and whether or not the firm, the advisor and or the firm need to cover this. So I would probably start just giving him the benefit of the doubt and saying, listen, the more I've thought about this, the more concern I have that the advice that was given resulted in this penalty. And I believe I should be made whole. But I want to give you an opportunity to respond to that and just hear him out. And I think just ask the Lord to give you wisdom as to the next step, whether or not you want to raise this at a higher level or whether you just want to let it go.

And I think you'd certainly be entitled to do either. So we appreciate your call, Beverly. Let us know how that turns out. I'm sorry to hear about this.

I know it's probably been a frustration for you at the very least. So God bless you. We hope you have a great weekend. Folks, much more to come on MoneyWise Live. Here's the number 800-525-7000. Call us right now. Well, we're delighted you tuned in today to MoneyWise Live. Biblical wisdom for your financial decisions. We've got some lines open headed into a holiday weekend, and I suspect many of you are already ready to enjoy some time off. And that's why perhaps we have a few extra lines open today.

So if you've had a burning question, maybe something on your mind or your heart related to your finances, and you want to make sure that you're applying biblical wisdom and principles to those decisions, whatever they might be, we'd love to hear from you. 800-525-7000. We've got some lines open. 800-525-7000. Back to now Round Rock, Texas, actually. Donna, thank you for calling.

How can I help? Hi. My question is, I'm a single lady, and I'm about 60 years old, and I don't really have too much money saved up, but I'm getting ready to inherit a little bit of money. Probably not much. Probably $8,000 to $10,000. And I was just wondering if there's something really smart I could do with that.

Like, I don't know what, but... Yeah. Okay, well let me ask you a couple of questions first. So you said you're single, you're around 60, this inheritance you expect to be $8,000 to $10,000. The first thing, as we look at the priority use of this, Donna, even before we think about investing it for the future, I would want to know two things. Number one is, do you want to do any giving out of it? Secondly, do you have any consumer debt?

Credit cards or car loans? Do you have a mortgage? Anything like that?

Nope. And then what kind of savings do you have? What kind of liquid savings do you have before you receive this? Well, I was doing pretty good until the pandemic and it's really kind of hurt me. So I don't really have much.

I'm having to kind of rebuild and... Sure. Okay. And what would you say your total expenses are over a month's time? Are you talking about electricity and rent and stuff like that? If you were to, I mean, hopefully you have a budget, but if not, if you were just think, you know, generalities here, are you spending $2,000 a month, $3,000, $4,000? No, it's probably, you know, I've gotten it down to probably, say, $1,000 offhand. Okay.

All right. Well, let's say there's some things in there that come, you know, a couple of times a year and not every month, and then you add in gifts and Christmas. I mean, let's say it's $2,000 a month all in, you know, I'd love for you to have six months' worth of reserves in a liquid savings account. So if you've pretty much depleted your reserves, which is where you would go if the unexpected came, you know, not a planned expense with a routine maintenance on the car, but something that comes out of left field or something related to your house or medically, you know, something unexpected. That's where that emergency savings really is helpful because then we don't have to think about taking on any debt. And if you're planning to get $8,000 to $10,000, that's probably about what you would want to have in your liquid savings account just to fall back on. And with that, I would put it in an online bank savings account, a high-yield savings.

You're going to get about a half a percent a year, so not a whole lot, but it's going to be FDIC insured, protected up to $250,000 backed by the full faith and credit of the United States government. And you could link it to your checking. So if you ever needed that money for an emergency, you'd just transfer it and within a day or two, it would show up in your checking account. That's probably what I would do with this money, and then as you are able to save more over time, then perhaps, you know, we could start putting some away for the longer term and seeing if you could get a return on it by investing it. But I probably wouldn't do that quite yet since you've depleted most of your savings. But give me your thoughts.

How does that feel to you? Well, yeah, I didn't know if I should try to save it or maybe I should try to buy a little, you know, just buy a little trailer and rent it out. Then I would have some rental property and try to invest it in something where I would get a return.

Sure, and I certainly can appreciate that. I just wouldn't want you to put it to work somewhere, whether it's, you know, let's say you put it in stocks. And, you know, we hit a speed bump here and the market's down and then all of a sudden you have a major unexpected expense. You don't have any savings and now you're forced to sell these stocks at a point that's not productive because the market's down and now you've lost money. Or you go in and buy a trailer and try to rent it out, but then you need some repairs and some other expense comes up.

You don't have the money for it and you don't get a renter as quickly as you thought or they move out and they damage the property. You know, any time we do that, you know, no matter what we do, we need this financial base under us that really is going to protect us. Ultimately our trust is in the Lord, but having some margin or some savings is really critical no matter what you do, whether it's stock market investing or real estate investing because the unexpected will come. And if your money is tied up, you may be forced to sell it at a loss or take on debt, which I don't want you to do. So I think if I were you, I'd just use this to shore up your emergency savings and then see if you can work your budget in such a way that you could get a certain amount every month in excess that you could then start putting away, let's say, into a good high quality mutual fund or something like that.

So I'm going to encourage you to start there as opposed to trying to invest it given that you don't have much in the way of savings right now. But we appreciate your call today, Donna. All the best to you in the days ahead. Let's head to Fort Lauderdale, Florida. Barbara, thank you for your call. How can I help? Hi there.

Yes, hi. The reason for my call is my husband, when he turned 65, did not take Medicare Part B because he was told as long as he had full insurance without a lapse, which he did because he retired from the postal service, that he wouldn't have to take the Part B. And he didn't take it right then because I wasn't 65 yet, so he didn't want to pay the extra money. Well, now that I'm 65 and he's taken Part B and we even proved to them we had full insurance without a lapse, they're saying, oh, you did, but that's called retiree's insurance now, even though it was the same insurance that he had when he worked. So he's being fined $1200 a year, and we're trying to see if there's a phone number we could call to get somebody because the Medicare specialist in our area, along with the president of the Postal Union said, Ron, they even gave us letters, so he shouldn't be paying a fine. But Social Security makes a determination, and I've been appealing it for two years and they say he has to pay the fine because he wasn't working. And I never told them back then he had to be working. They just said he had to have full insurance without a lapse, and he did. He had the same insurance, and I said he had insurance, and they said, oh, well, now that's considered retiree insurance since he retired.

Yeah, I'm so sorry to hear that. I mean, you can file an appeal to have a penalty removed like the one you're describing if you make the case that the government gave you bad advice or is applying the rule incorrectly just based on your situation. I think that's probably the next step that I would pursue here as you think about moving forward. Clearly, if what's being applied shouldn't be just based on the fact that you had coverage elsewhere, and that's the key. You can opt not to get Medicare Part B during your initial enrollment period or within 12 months after. If you do that, you can avoid that penalty if you have coverage elsewhere.

And if you did, then perhaps that penalty doesn't apply to you. So I'd go just to Medicare.gov and look for the appeal process for you to formally file an appeal to have that penalty removed, which is going to begin a process to investigate this and determine whether, in fact, this was applied correctly. We wish you all the best.

I know this can be frustrating as you navigate the Medicare system, but just ask the Lord to give you some wisdom here and some favor as you proceed. We appreciate your call today. More calls to come just around the corner on MoneyWiseLive. Biblical wisdom for your financial decisions. 800-525-7000.

Lines are open. Give us a call right now. Thank you for joining us on MoneyWiseLive. I'm Rob West, your host, taking your calls and questions on anything financial. 800-525-7000 as we head into a holiday weekend. What plans do you have?

I hope something fun as you relax and enjoy your family and some time to do perhaps some grilling or something enjoyable with friends and family. Thank you for your calls today. We've covered a lot of ground. Let's go right back to the phones to St. Petersburg, Florida. Brenda, thank you for calling today. How can I help? Hi, Ron.

Thank you for taking my call. Is there a statute of limitations on fiduciary responsibility? You know, it does vary from state to state. Generally, I believe, Brenda, that that fiduciary statute of limitations on fiduciary responsibility is three or four years. But you will have to check with the state of Florida to see what it is in your state because that's handled at a state level in many cases. You know, in some cases, it may be handled by the Securities and Exchange Commission, depending on the nature of the situation.

But I would start with your state. But I think typically it's three or four years. Does that help? It does. So that would lead me to something. Another question, because it has been, I think, six years now when these investor, these well, advisors, they they caused me to lose my HD six. Are you familiar with the HD six annuity?

Yes. So Prudential, I caught it like what they did is they, well, I agreed, I signed all the papers in the event that my HD six wasn't what I thought it was. And they they told me it wasn't that there was no way they were going to that Prudential was going to double my monthly.

They never heard of anything like that. So they had me fill out all the papers and my husband was there. We were both there and we asked them to say, well, do the paperwork because you're here out of convenience, but don't turn it in yet.

We want to do a three way call with you on Monday morning because this was over the weekend and they didn't wait. They turned the papers in and Prudential when I because they had my signature, there was no way they were going to, you know, to reinstate that they gave me an HD five and didn't charge me, you know. But the company Ameriprise, the attorney there, he offered me two thousand dollars for poor customer service, but that that is no nowhere near what they caused me to lose. Yeah, yeah.

Well, Brenda, I'm so sorry to hear about your situation. Obviously, you know, this is ultimately between you and the brokerage firm related to the sale of this product. And, you know, what I will tell you is these firms, including the one that you mentioned, are very good typically at working with their customers who believe that something's been done inappropriately, whether it was just a misunderstanding or there was an intentional misleading here. And that would obviously be uncovered in the due diligence process that they would go about with the adviser. But they're very good about making restitution and, you know, accepting responsibility if there is responsibility to be taken.

Ultimately, annuity contracts are, you know, overseen by the State Insurance Commission, although variable annuities would be ultimately governed by the Securities and Exchange Commission. But the the firm is is the starting place. And I would do that in writing and just let them know what you feel like transpired and why you feel like that it was not handled appropriately and then work through that process with them. And if you feel like you need to retain some counsel to represent you in that, you certainly could do that or you could handle that yourself. But, you know, I think ultimately they're going to want to do the right thing to make sure that that you are satisfied as a customer, because I know that's in their best interest as well as yours.

So even though that statute of limitations perhaps has run out, you know, I think it's worthwhile to pursue this and just let somebody know that you feel like something was not handled appropriately. And we'll pray that the Lord gives you wisdom as you navigate that. And we appreciate your call today. Let's head to Chicago, Illinois. Kelly, thank you for your call.

How can I help? Go right ahead, Kelly. All right. Well, I don't think I hear Kelly's radio in the background.

Maybe we'll see if we can get Kelly to turn that down. Let's head to Miami, Florida. Jennifer, thank you for your call.

What can I do for you? Hi, I'm 52 years old and I have about, you know, a little bit more than $100,000 in the bank in the savings account. And I don't know what to do with it. I'm deciding, do I put it in a Roth IRA?

Do I put it in mutual fund? Because it's just sitting there in my savings account. I see.

OK. So tell me a little bit about your situation. Do you have is this kind of your emergency savings?

Obviously, it's quite a bit more than what you would need. But what's the purpose of this money? It's an extra job that I took on. And with that extra job, I was able to all that money get deposited in my savings account with my actual job. I use that money in my checking account to pay for things and have an emergency fund. But my job does not provide a 401k. So I know that and that I should put money towards my retirement, but I haven't been doing so. Another job, the other job that I told you that I had, they do provide a 401k, but I don't think they match anything. And I'm confused whether to put money in 401k that doesn't match anything or just the money that I am getting paid from them. Do I put it in? I don't know. Put in a Roth IRA and the mutual fund. I don't know what to do.

Very, very good. Well, I think there's a couple of things here. Number one is I would reduce that savings to just three to six months expenses. Keep that liquid. That's going to be your emergency reserves. Then with this second job, clearly you have quite a bit of margin. You have the ability to put money away because you built up this 100,000. That's a good thing, but we really want that growing, Jennifer, in a tax deferred environment because that's going to be most advantageous to you where the taxes aren't going to put a drag on the returns over time, which is either a 401k or some type of IRA. The benefit of the 401k is you can put more money away on an annual basis, even if they're not matching. So you can put quite a bit more money for 2021. You can put 19,500 in a 401k, whereas you can only put 6,000 into an IRA. So I think the benefit there is you can get more money working for you through salary deferral into that 401k, even if they're not matching. Now, you could also fund every year a Roth IRA, which would be great, but again, you can only put 6,000 in there. And because you've got quite a bit in that savings account, what you're probably going to want to do is max out what's going into that 401k out of your paycheck every month and then take what you need for your expenses that you're no longer getting because you're putting so much into the 401k and just live off of that amount that you need to pull into your checking that's coming out of savings. Does that make sense? Because you can't just drop that 100,000 in a 401k. So yeah, you could say take the full amount, 19,500 divided by 12 out of my check, and if that leaves you short, then you just supplement that out of your savings until it's all invested.

And then as you get it into the 401k and that new Roth IRA you're going to open, then it's just a matter of making sure you have the right investment mix for you, which if you're young and you've got plenty of time, you probably want to be fairly aggressive in terms of getting that money to grow for you if that's your risk tolerance and goals and objectives. Does that all make sense though? Yes, it does. Does MoneyWise have somebody they can recommend for me? Yeah, we don't offer any financial services. We just provide biblical financial education. However, there are some great advisors that have the designation that we recommend, which is called Certified Kingdom Advisor. These are men and women who have significant experience as financial and investment professionals. They've met high standards, but they also have been trained to provide biblical financial counsel.

You can find a CKA there in Miami by going to our website, MoneyWiseLive.org, and just click Find a CKA, and you can search by city, state, or zip. I'd interview two or three, find the one that's the best fit, and then that professional could direct you as to everything you need to know to get these accounts set up and select the investments in the 401k and then move forward from there. Thank you. So definitely once the money is already in the savings account, even though I came from that employer, I definitely cannot put it into the 401k because it has to be put in the 401k prior to it reaching me.

That's right, through a salary deferral, so it has to come out of your paycheck, but they can ratchet that amount up to the maximum, and then you can just supplement out of savings until you deplete those funds. Okay, I'll do that. Thank you so much for your help. Okay, Jennifer, God bless you, and thank you for calling. We're going to finish today in Moline, Illinois.

Cheryl, how can I help? Hi, I'm calling because my husband is 56 and I'm 54, and he never would qualify for a pension, but he does have a 401k with his company, and they've matched him. We've always put in the maximum, and right now we've got about, I think it's like $950,000 stocked away for retirement, and by the time he retires, we'll have that. So he wants to retire on a lake and go fishing every day, which is fine with me, except the state that he's chosen is one that taxes your retirement income, and since it's not a pension, I believe since it's not a pension, they're going to tax all that money should we look possibly in a state that doesn't tax your retirement income.

Well, it doesn't matter what state you're in. As you take a withdrawal from a 401k or if you roll it to a traditional IRA, the amount you take out in any calendar year is going to be taxed as taxable income. And so the idea behind the 401k and the traditional IRA is that money grows tax-deferred, so you get the deduction when it goes in, then it grows tax-deferred, and then when you take it out, you pay tax on it as income in the amount that you pull out, but the idea is that you're taking less because your lifestyle's lower, debt's paid off, and you're supplementing with Social Security. Stay on the line. We'll finish a bit off the air, but I think you've done everything right. You've saved quite a bit of money.

Yes, you'll pay some tax, but you just need to build your budget accordingly. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I want to say big thanks to my team today and thank you for being here. Enjoy your Labor Day weekend. Come back and join us next week. God bless you.