Opt Out of Child Tax Credit?

Uncle Ryan is going to talk about how hot, hot, hot cash out refinances are. That sounds fun.

I sound like a broken record. I've been doing this for 18 years. I have never seen a market like this in my life. Home values have generally been skyrocketing the last couple of years.

And with interest rates being some low, I've actually seen refinances where people are able to cash out that newly found equity in their homes, do home improvements, whatever it may be, and still save money per month compared to what their prior mortgage payment was. So it's worth a shot just to give us a phone call. And one thing I can promise at United Faith Mortgage is we will not be pushy.

It's one of my biggest pet peeves. I can promise you we will not be that way. I like to see it as my job is to present you with a few different options.

I step back, I let you decide, and I'll let you call me when you want to move forward. We are United Faith Mortgage. When is free money not so free? Well, maybe when it's part of expedited child tax credit payments from the IRS. It's all part of the American Rescue Plan passed by Congress earlier this year.

I am Rob West. Millions of American families have received these expedited payments in July and August, but some may have to pay the piper for them next year at tax time. I'll talk about that first 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 decisions. Well, we want to give a hat tip to consumer expert Clark Howard for alerting us to this potential problem.

Here's the background. Congress passed and the President signed the American Rescue Plan into law several months back. While the legislation is no doubt helping cash-strapped Americans still suffering from COVID shutdowns, there's a provision that could be a problem for many families when they have to file their 2021 returns. As a part of the law, the child tax credit for 2021 was increased to get more help to more families. The credit increased from $2,000 to $3,600 for each child under age 6. For each child ages 6 to 16, the credit increased from $2,000 to $3,000. And for the first time, the law also makes 17-year-olds eligible for the $3,000 credit. Who's eligible for these tax credits? Married couples earning up to $150,000 a year can qualify for the full $300 monthly credit per child. And single parents filing as head of household are eligible if they make up to $112,500 a year.

So far, so good. But the problem is that in July, the Treasury Department began sending out monthly payments that by the end of the year will equal half of the total 2021 tax credit that eligible families would receive next spring when they file taxes. Those payments will be $250 to $300 per child depending on their age. Now I know you're thinking, what could possibly be the problem with receiving this money ahead of time?

Well, it's this. All of these stimulus payments Americans have received over the last year and a half have been very confusing for a lot of people. How much will I get? Do I have to pay taxes on this money? And so on.

You've probably asked those questions yourself. Well, this new twist on the child tax credit brings that confusion to a new level. Many families are likely to think that these monthly checks are like the previous stimulus payments.

They're not. These payments will be subtracted from the amount eligible families would normally receive when they file their 2021 returns. So in a sense, it's like they're taking out a huge loan from themselves that will have to be repaid at tax time. That's compounded by the fact that many people have heard that the child tax credit is going up this year, way up, and they'll be looking for that big increase next spring. In reality, the amount they'll be able to claim will actually be less than they could claim on their 2020 return because they've already received half of the 2021 payments. And some families may not be able to claim anything at all depending on their situation. Worse, the IRS says that depending on income, it may demand reimbursement if a family receives over payments for the child tax credit.

How might that happen? Well, eligibility for child tax credits depends on your income. A single filer with young children can earn up to $75,000 a year, married couples up to $150,000 a year. But that's based on your 2020 return. If you make more than that in 2021 and receive the monthly payments I talked about, you'll potentially have to pay that money back to the IRS.

So it's a bit of a mess. You do have a couple of options. Even though you've probably received payments in July and August, you can still stop the remaining payments that you'd have to refund the government next spring. You just need to contact the IRS and tell them to stop the monthly payments. They've set up an online portal for you to do that, or you can call the IRS at 800-829-1040.

We'll have the link to the online portal and that phone number in today's show notes. The other option is to just continue receiving the payments, but don't spend them. Instead, put the money in an out of the way place like an online savings account where you can still earn a little bit of interest.

I like Ally, Marcus or Capital One 360. So that's the long and short of it. Any money you receive now in the form of child tax credits will be deducted from what you normally receive on your 2021 federal tax return. I think the moral of the story is to always take a second look at what you think is free money. It often has strings attached and it's always wise to be prepared and safe. All right, your calls are next. 800-525-7000.

That's 800-525-7000. I'm Rob West and this is MoneyWise Live. We'll be right back. Thanks for joining us today on MoneyWise Live.

So delighted you're along with us. Taking your calls and questions in just a moment on anything financial, we'd love to hear from you. Is it saving or giving? Perhaps it's retirement that has you perplexed or teaching your kids God's principles of managing money. Whatever it is, we'd love to tackle it today from a biblical perspective. That's what we do here on Moody Radio and we'd love to have you join us.

Lines are open. 800-525-7000. By the way, if you haven't downloaded the MoneyWise app, we'd love for you to do that wherever you download apps. The MoneyWise app will let you take MoneyWise Live on the go, listen to broadcast archives, all of our incredible content from the leading voices in Christian finance, plus our digital envelope system, which is the best envelope system I've ever used in your pocket. You can share it with your spouse and stay on top of your spending. That is the key to every financial success, living well within your means. Go download it today.

Just search for MoneyWise Biblical Finance when you visit your app store. All right, the lines are filling up quickly, so let's head to the phones today. We're going to begin in Spokane, Washington. Marie, thank you for your call. How can I help you?

Yes, hi Mr. West, or Pastor West, I should say. Thank you for taking my call. I have a home that I've had for about a year, and it's not financed. And I have a motor home that is financed, and I believe I should sell the home to pay off the motor home. And I'm just wondering if this is a good financial decision.

I am retired and on a fixed income, and it just makes sense to me to pay off the home. Yeah, Marie, it's obviously an important consideration because it's not only financial, but because this involves your residence where you will live, it's more than just a financial decision. If this was purely just a question about maximizing an asset, we could approach it that way.

But we've got to deal with the other side of this as well. Where do you want to live? What fits into your budget? What about location? And is there any sentimental value here? And what are your longer term plans?

And how might that affect this decision? I mean, clearly, clearly, in most parts of the country, if not nationwide, we're in a very strong housing market. It's cooled off slightly, but still a seller's market, which means you should be able to maximize the value of this home.

But I think as you consider that, you also have to look at, okay, what would you replace it with? And if you're planning to move into the motor home to downsize, perhaps lower your overall expenses, you could clearly take the proceeds minus any taxes that might be due. And we'll talk about that, pay off the motor home if you were going to live there, and then perhaps have some leftover that you could use to shore up your savings or even look toward a longer term investing.

But tell me your plans. If you were to sell this home, Marie, what do you think you would do in terms of a living situation? Well, I bought the motor home to travel in, and then I got stuck in COVID. And then I had to live in it. So I could live in it again, but I would like to do some traveling. I'm from Washington, and I love Washington and Oregon, and there's so much I want to see.

And like I said, I got stuck in COVID, so I didn't really get a chance to get out there much. So I'd like to do that. And in the meantime, I think I would put my name on list for low income apartments, and then see if I could get into something like that, because I'm retired and I'm low income.

So that would work for me. Well, I was just going to say because of the home that I have, I own it or almost. And so the overhead, taking care of it might be a little bit much for me, especially with the motor home. And I tried to sell it, the motor home, and it's just not going to sell.

There's just too much of a payoff. So I see kind of my bad decision. So you're upside down on the motor home, meaning you owe more than you believe you could sell it for? Oh, definitely.

I tried to sell it. That was my plan was I bought the home to sell the motor home. You know, since going through COVID, I'd rather be in a home than in the motor home at that time. Yes, I see. Okay.

You know, I am certainly following where you're at. And because you're upside down in the motor home, selling this home would give you an opportunity, obviously, to satisfy that loan. And because you can live there, you have before and you're actually looking forward to perhaps using that to travel a bit in the Washington area.

That makes some sense to me, which would also buy you some time to figure out is that a long term plan or do you want to look for, as you said, an apartment and perhaps if you could qualify for low income type apartments that would not put a strain on your budget, that would be great. How long have you lived in your primary residence? I've only been here a year. Okay. And do you believe you could sell it for more than you paid for it? Oh, most definitely, because homes have gone up and yeah. Yeah.

What do you say? It's a mobile home. Okay. You said you don't owe anything on it. What do you believe the value of it is? Well, I don't actually own it outright. I owe a small payoff to the people I bought it from. They're carrying the balance with no interest, so I don't have any interest on it. And if I put it up for sale in April of 22, then I will owe $17,000.

So I'd have to take that off at the top as well as the motorhome. But I still believe that I would come out ahead. Okay. Because it's just been overwhelming trying to keep up with all this.

God has put a square pagan around all literally. Yes. Okay. Well, I think, you know, as you look at this, if you could reach the two year mark, then you wouldn't owe any taxes on any gains that you make. You may owe very little anyway, just based on your income or nothing.

So that may not be a consideration, but it might be worth just looking into to understand if there are any tax consequences based on your profit, because you haven't reached that two year mark, which just may play into whether or not you delayed this slightly to reach the two year mark where you would have a quarter of a million in gains that you could get without any capital gains taxes being paid. But again, because of your low income, that may not be a factor. But given the fact that you're upside down in the in the motorhome, I think this does make some sense, gives you flexibility and some time to think about where you want to go next. You can certainly pray through that.

And again, this is a pretty strong market, hopefully one where you could maximize the value of this, pay off that no interest loan, satisfy the loan on the motorhome and hopefully have some left over. So Marie, I'm on board with this strategy. Does that make sense? Oh, yes, it does. It makes really good sense, because I didn't know if I had to live in the home for five years, at least to get out of the tax crunch. So by you telling me that really helps a bunch to make that decision. But yeah, it's two out of the last five years.

Yeah. Well, it'd be worth a conversation with a tax preparer or CPA just to see because based on your income, you may not owe any capital gains, even if you don't wait to the two year mark. So I would check that out.

But certainly, if you can get to two years, you'll know you have that exemption in place. And listen, all the best to you in this next season of life. Grateful for you listening today. And I'm confident the Lord has a great plan ahead. And we appreciate your call. Folks, that's what it's all about finding God's heart as it relates to managing his money.

And that's the key. You know, here on MoneyWiseLive, we recognize God owns it all. We're the stewards or managers of the creator of the universe's resources. Well, that's a high calling. So we want to get it right. Here's the good news.

God's Word has 2300 verses on this topic to help us pull out the principles and apply them to how we're handling his money today. That's what we want to help you do. Vote lines are open 800-525-7000.

More to come. Stay with us. Thanks for joining us today on MoneyWiseLive. I'm Rob Lest, taking your calls and questions on anything financial. We have two lines open. 800-525-7000. We're going to go right back to the phones. Fulton, Missouri. Don, thank you for your call, sir.

How can I help you? Yeah. Hey, I just wanted to know, we applied for a PPP small business loan back in 2020. We went through the process, received the money, and then we applied for the forgiveness that they had, and we were able to get the forgiveness. Anyway, I was just wondering if there were any hidden charges or any hidden taxes or anything that might be coming up for that, because we actually went for the second round of the PPP loan for small business, and we were in the process of applying for the forgiveness for that, too. I just wondered, I was curious if the government's got something hidden in there, you know. Yes.

No, there really isn't. The key is that you have applied for the forgiveness, which you would do with the lender that issued your loan in the first place, not the government, and that you qualified. And the big idea there on this loan to small businesses would be that the money was spent based on the ratio they wanted to see, largely toward the payroll and, to a lesser degree, things like utilities, rent, and inventory. The first round required that 75% of the funds go toward payroll to be eligible for forgiveness, which meant that the balance could be used for non-payroll items. And then it changed to 60%, so you've got to meet that 60-40 threshold to make sure that you do qualify.

And some of those non-payroll expenses are things like rent, utility payments, interest payments, things like that. And then there's some other requirements as well that you would need to look at just in terms of the window of time this accounted for and that you met a certain number of employees criteria, but with a small business you probably did. Bottom line is the vast majority of these are being forgiven.

It's just taking some time. So I just go back to the lender that you applied with. Make sure you in fact do qualify, but then you can check on the status and they should be able to give you an update as to how quickly these are being forgiven.

But I don't think you're going to be surprised with any hidden charges or expenses. I think it's just a timing function. If you qualify, you will eventually get it. Does that make sense? Yeah, it makes a lot of sense. I just, you know, how with government loans you just kind of wonder if there's something hidden that you might have to pay for later or whatever, you know?

Yeah. Well, we started by talking about that today on the child tax credit, so I certainly understand that, but I don't think you'll find anything here. So we appreciate you checking in with us. Thanks for keeping folks on your payroll during this pandemic. You know, that was so key and I hope things are going well for you, Don. Thanks for listening to the program. On to, I believe it's Ravenna, Ohio. Am I saying that right, William?

It's Ravenna, but thank you for taking my call. Sure. So my question, I'm getting married in January and I don't think it's wise to combine our finances until after we get married. So do you have any like policies, procedures you would go about with preparing ourselves for that merge of finances?

Any tips or tricks you have for me? Well, William, I'm delighted you're asking this question. This is one that I think is so critical for engaged couples to deal with. You know, most of us go through premarital counseling to deal with all kinds of issues that are critical to talk about, but often the finances is maybe one small part of that. And I don't think in many cases gets addressed adequately, especially given the percentage of people that will say if there's a breakdown in communication, money was the top reason.

You know, it was the primary driver of that breakdown. So here's what I would say to you. Number one, you're already well on your way just by the fact that you are asking the questions.

And that's a good sign. Number two, you all need to be really transparent, open and honest with each other about your past finances. So disclosing really where you're at in terms of savings and debt. I would also, as a part of that conversation, talk about what money was like growing up. Because, you know, those early memories of money, how our parents handled money. You know, the lifestyle we grew up in did so much to shape how you view money today, whether you cling to it tightly or, you know, you can hold it loosely, both in terms of spending even in generosity as well. But just understanding your backgrounds and what you're bringing to the marriage relationship in terms of your money personality is really key. So that as you all then forge your own vision for how you're going to handle God's money as a married couple, as one flesh, it will be important to make sure that you understand what each of you is bringing to the table.

Not in terms of necessarily assets and liabilities, but that's clearly one part of it. But all the non-financial side as well. And then as you pray through that, I think you're going to want to make sure that you develop that shared vision. Where is God taking us? What lifestyle has he called us to? You know, what does it look like to live modestly or simply? And what are some of the decisions we're going to be making about prioritizing giving?

And where is that going to fit? What about long-term savings and living within our means? Who's going to be the bookkeeper? You know, because even though we're making joint financial decisions, one person who probably has a propensity toward greater administration and details is probably going to be the one that actually writes the checks.

Or, you know, these days we don't use many checks, but pushes the button to make the financial transactions online. And as a part of that, William, I think it's really critical that even if you'd keep them separate now, and I would concur with that, that everything does in fact get merged. So we don't create right out of the gate a situation where it's mine and yours and my bills and your bills.

No, it doesn't matter who's bringing money in. It's all God's provision. The question is, how are you all moving forward together as a married couple to accomplish God's purposes in your marriage and in your life with His resources?

So I think those are some of the key things that you're going to need to be working on. I'd love to send you a book just as our gift to you. Call it a wedding gift, William. It's called Money and Marriage God's Way. It's by Howard Dayton. So you stay on the line. We'll get your information and get that book right out to you.

Oh, one more thing. Pray about getting a financial mentor couple, an older couple who can walk with you for the first year just in this area of finances, perhaps in your church. See if God wouldn't lay somebody on your heart.

I think that could make a world of difference. Listen, congratulations on your upcoming marriage. May God bless you and your bride, and we appreciate your call today. Folks, this is MoneyWise Live, biblical wisdom for your financial journey. I'm Rob West. Stay with us. We'll be right back. Thanks for tuning in to MoneyWise Live.

I'm Rob West, your host. Hey, have you checked out our brand new website? It's hot off the presses. I'd love for you to look at it, whether you're on your mobile device, as long as you're not driving. Pull it up on your mobile device or your tablet, or if you're sitting in front of a computer, check it out there as well. It's MoneyWiseLive.org.

It's brand new. I think you'll love our new site that makes accessing our content, tools, and resources easier than ever. Just a moment ago, we were talking to William about money and marriage, and two of our featured articles right there on the main webpage at MoneyWiseLive.org are related to that topic. We've got one from Compass on married couple spending. We've also got a MoneyWise resource on improving your money and marriage communication.

That plus four costs of children that catch parents off guard. There's even an article related to today's opening topic on opting out of the child tax credit. If you missed some of that in our opener today, you can read all about it. Again, check out our website, MoneyWiseLive.org. By the way, when you're there, jump into the community. You can post a question to get answers from others in the MoneyWise community.

Plus our MoneyWise coaches are in there as well. You can find a certified Kingdom advisor. You can connect with the MoneyWise app. You can also donate. And this month with your gift of $25 or more, you can request a copy of Ron Blue's book, Never Enough, Three Keys to Financial Contentment. You'll find the donate button at the top of the page.

Again, it's all right there, MoneyWiseLive.org. Check it out today. Well, all the lines are full, but that means you can sit back and listen to some great questions like this one coming from Boca Raton, Florida, just north of where I grew up. Tony, good afternoon, sir. How can I help you?

Hi, Rob. I'm good. Thank you. And thank you for giving me this opportunity. Sure. I'm calling. Yeah.

Go ahead. So, yeah, I'm calling because I know it's a seller's market, but I'm trying to help my mom to purchase her first home. And I mean, for what she can afford by herself, the market, it's too crazy. So I'm thinking to co-sign with her to purchase something that she can live off and rent some of it. So she doesn't have to pay so much. So I wanted to hear your advice on those kind of investments.

I don't have money to spare, you know, like extra money to help her out. She has a little bit safe for down payment. So what would you think of that type of investment?

Is it too risky? Yeah. Well, a couple of questions for you, Tony. You mentioned, perhaps getting some income coming into her to offset some of the expenses that she would have in this home that you would help her buy. We'll talk about that side of it in a moment. Are you thinking she'd rent out a room or what did you have in mind? Yeah. Yeah. Like rent out a room or buy like a small multi-family. Like a duplex or something? Uh-huh.

Okay. And have you gotten as far to determine what she would be looking to spend? And if so, I'd love to know that number. Secondly, how much has she saved? So I know she has like 20,000 and we both run like a pre-qualification and we can be a pre-qualification be approved with that. 20,000 close to 20 and between 20 and 30,000 is what we have saved. We can get something at 417 maximum. Okay.

Up to 417,000. And if you were not to find a renter, if she would have to carry the full mortgage, and I'm assuming because you said you don't have the extra resources, you wouldn't be supplementing the mortgage payment. Can she afford a mortgage payment on a $417,000 purchase minus whatever you'd put down 20 or 30,000? No.

Yeah. So where would that, how would you make that up? Would you offset that every month? I will try, but honestly, I don't think I can afford it.

This is my concern, Tony. You know, just because a lender says they'll give you a $417,000 doesn't mean it makes sense. And if she is on a limited income and you're stretching to help get her in, they're using both of your incomes, which is why you're having to step in. It just tells me that, you know, this is out of reach that this, she can't afford this. And I realize property values are sky high right now, especially in Boca Raton, Florida.

I'm well aware of that market. And I realized that 417,000, although it's an incredibly, you know, high amount of money, it's a lot of money. It probably isn't going to buy anywhere near what you would expect it to. So what I don't want to see happen is you all kind of stretch to get into it just because somebody will give you the funds and then, you know, you're not able to find the roommate as quickly as you think, or for quite a bit of time, or somebody moves in and then a few months later they move out unexpectedly and you're not able to replace them. And then all of a sudden, you know, she and you are in a real hardship situation where you can't make the mortgage payment and now we're into a foreclosure and your credit's damaged and, you know, she's having to come up with alternatives for where to live.

I mean, I realize I'm painting a dire picture, but it could be a reality just given the fact that it seems like we're stretching. You know, one evidence of that is the down payment typically would say, you know, you'd want at least 20% down, which, you know, would be 80,000 on a $400,000 purchase. And then the mortgage payment on the balance, if you bought a $400,000 mortgage, you put home, you put 80 down, the mortgage on 320, we'd want to make sure that wasn't more than 25% of her take-home pay and I suspect it would be considerably higher than that. It'd be one thing if you had the resources to say, it's no problem, I'll cover it and I can do that. I have the financial means to do it and it's not going to be a major, you know, problem for me either down the road, but I'm not hearing that as well. So as much as I'd love for her to have a home, I think the combination of the market you're in, how high the market is right now, given that it's a seller's market and what I'm hearing regarding limited resources and an ability to make sure that mortgage gets paid every month without creating a hardship, I'm going to have to advise you to push the pause button. Perhaps you help her get into an apartment, one that might be better suited for her in a better location.

Let's wait for the housing market to cool off a bit and you guys do some more saving before you make this purchase because the last thing I would want is to go into a home and then for you all to have some real problems down the road. Does that make sense though, Tony? Yeah, thank you so much.

You're welcome, Tony. I'm sorry I didn't have better news for you, my friend. Listen, we're going to pray the Lord gives you wisdom as you navigate this. I know your desire is to help your mom. I know you'd love for her to have a home.

I would too. Bottom line is, we want what's best for you all. Let's trust the Lord that He'll give you wisdom to know what the next move is and please keep us updated, Tony, along the way. We appreciate your call today. You know, folks, this is a hard one because we want to help our parents. In fact, that's very biblical.

We're to honor our parents and we're to be a blessing to them. And yeah, in certain times that's going to include financially speaking if they don't have the means to provide for themselves. And yet what we don't ever want to do is put them in a situation where we're going to allow them to get overextended, you or them, which makes a difficult situation even worse.

So in our desire to help, in some cases we can create more problems. So let's trust the Lord. Let's live within our means as difficult as that is sometimes with limited resources. And I'm confident He will provide. Folks, we're going to continue to unpack biblical truth and apply it to what's going on in your financial life.

We've got questions related to 401ks, income tax refunds. We're also going to talk about where to put emergency funds. That's all just around the corner. Stay with us.

Thanks for tuning in to MoneyWise Live, biblical wisdom for your financial journey. Right back to the phones today, we go to Morton, Ohio. Becky has been waiting patiently.

And Becky, how can I help you? I just wondered when I can expect my income tax return because when I Google that and I asked and they said, well, that's been held up because of stimulus checks and then another stimulus check. And then there's good news because they're going to be sending out the $300 credit.

And I just wonder when it's going to come. Yeah, well, you're talking about your refund. And Becky, you and 15 million other Americans are still waiting for that income tax refund. The IRS has said that in addition to the reasons you mentioned, just the delays due to the continued operations that they have that are limited under the COVID health and safety restrictions to ensure the safety of their workers are resulting in a good many of these delays. They are ensuring us that these returns are being processed as quickly as possible so that they can get those checks out. But so far, they say all returns received in April have been processed. But a whole bunch of returns were sent in after that. So the stacks must be pretty tall at the IRS for at least the paper return. So never fear, it will come. It's just a result of some of the supply constraints we're seeing in so many industries across the board. The IRS is no exception.

And it's all due to the pandemic. So you hang in there and you'll see that check before too long. Okay. Okay. Thank you. Take my call and you have a good day. All right. You too, Becky. God bless you.

On to West Palm Beach, Florida. Marie, good afternoon. Good afternoon. How are you? Doing great.

How can I help? I have my 401k that I was afraid when COVID hit because of the economy, it was going to go down. I was going to lose. I lost a lot of part of it. But when I recover it, I just move it to a separate account that is not going up and down. I was wondering if it's the right time to move it back into the account that's going up and down because I hate the fact that, you know, you can end up losing a big chunk of it in one day. You know, the market crashed.

You know, it's just like. I understand, Marie. You know, I wouldn't be able to give you a specific recommendation without knowing a bit more detail on your situation. I'm just wondering if you could give me a little bit more detail on your situation, how much you have in there and what your age and goals and objectives are. But let me just say generally, I'm going to encourage you to avoid trying to time the market. You know, it is very easy when things get uncertain and they certainly were uncertain at the beginning of this pandemic. It can get very easy to react emotionally and to make decisions to move in or out of the market based on what we feel or even fear is going to happen in one direction or the other.

The problem is all the data, Marie says, that that's not the right way to handle it, because invariably and we saw this play out at the beginning of the pandemic. Invariably, we move out of the market to cash because we think, boy, this isn't going to end well and it's going to go on and on. And yet it was the fastest move from a bull to a bear market into a recession that we've ever seen. But it was more quickly than ever before did we move out of it and moved back to the highest highs we've ever seen in the stock market because the market recovered so quickly. It was unbelievable what happened in the stock market.

And so what can happen is we move out and then we don't get back in. The market recovers and we miss all the upside. So that's why it's just so prudent to take the long-term approach to be diversified, not to react emotionally. And so I think in terms of you going back into the market, the first thing I'd want to make sure is that you know what the right allocation is for you. And so if you're seven to 10 years out from retirement, you've still got a good bit of time, but you should be, you know, taking a little bit more of a conservative posture than you would have, let's say 10 years ago.

So if you were to have, you know, put 80% in the market today and 20% in bonds, perhaps 10 years ago, it would have been, you know, 90% and 10 or something like that. And so I think as you begin to move back into the market, I would do so on a systematic basis, perhaps, you know, a fourth of what you took out next month, put back in, and then another fourth a month after that, and another fourth until you get it all reinvested, but make sure you put it into investments that are consistent with your age goals and objectives and risk tolerance. And if you need some help with that, I'd connect with a certified kingdom advisor there in West Palm, or see if the plan administrator could assist you with some counsel on the right investments to choose for you.

And then the next time we get into some uncertainty, let's not react emotionally. Let's stay with your plan and let's trust that if you're invested appropriately, meaning you have the right allocation, the right mix between stocks and bonds, you can weather any storm. And in fact, remember this, even the day you retire, if the Lord tarries and you have good health, you're still going to need that money to be around and grow for probably two decades or more. So, you know, you still are able to take a long-term approach, even though you're going to get more and more conservative as you approach retirement. So think about that and then reach out for some help as you systematically move back into the market in a way that's appropriate for you. And we appreciate your call today. On to Eldorado Springs, Missouri. Hello Chad, how can I help you, sir?

Hey, hi. Yeah, so I've been advised to work towards a $25,000 emergency fund savings and I've got $25,000, $30,000 of some debt that we're working on, plus the other would be my about $85,000 left on house payment. I feel like maybe, and I've got about $15,000 in that emergency fund.

I guess my question is, should I be putting some money towards the, start putting some of that money towards the house and this other debt or keep trying to get to this goal of $25,000? Does that sound right? Well, it's a great question. Yeah, a couple of questions I would have back for you. What do you think, Chad, if you were to guess and maybe you know real closely, but what would your guess be on what your total expenses are over a month? Not three grand, $2,500. Okay, so let's say it's $3,000. All right, and then secondly, what is that other debt, not the $85,000 on the house?

So I have a credit card and I actually have some recreational toys, four-wheelers, side-by-side stuff, just some small payment stuff like that, and I have one student loan. Okay, what's the total of those, all those together? It's probably around, it's right around $30,000. Around $30,000. And last question, what surplus do you have every month over and above your expenses that you could use for debt reduction or adding to your emergency fund?

Probably around $800,000 to $1,000. Okay, yeah, I'd lock your emergency fund right where it is. You know, typically we'd say you'd want in your season of life six months expenses on the top end in savings and that's $18,000.

So, you know, we'd say three to six months, so three months would be $9,000. So you're already well above that at $15,000 and I think you could lock that right there, perhaps even bring that down, you know, to $12,000, no less than $9,000. I think your focus right now needs to be first the credit card debt and then second the recreational vehicles and then third the student loans. Once those are wiped out, that's going to give you even more margin to start going after the house and let's get that paid down so that once you reach retirement, that house is completely paid off hopefully well before that. That's going to give you even more margin and, you know, if you wanted to increase that emergency fund up, you could.

I'd look at new giving opportunities or even long-term savings but at $15,000, I think you're pretty close to the top end unless there's something coming on the horizon that you know about that you need to be anticipating just as a general rule of thumb. I think you're sitting in a really good spot. I'd go after that debt starting with the consumer debt first, okay? Perfect, perfect. Thank you. I appreciate that. All right, we appreciate your call today.

Quickly to Ravenna, Ohio. Dorothy, I understand you have a question about the benefit of using a realtor, is that right? Right, I was wondering what the pros and cons were if selling your own home for sale by owner or going with a realtor.

Yeah, yeah, very good. You know, I'm a big fan of using professionals to help us manage God's money just because of the expertise, the time and attention they can give and so often it takes the emotions out of it. That's why I think it's important to have a financial advisor on the planning side as well as the investment side and I would say that's absolutely true here with real estate as well. Number one, we're in a really challenging market right now so they're understanding of what fair market value is and developing a pricing strategy is critical. They're going to do the showings which means you're not the one having to be there necessarily and go through and answer the questions and doing that in a way that's appropriate. Of course, honest but appropriate as you talk to both the potential buyers as well as the agents representing them. They can help just to make sure you don't ever put yourself in a precarious situation in terms of somebody coming into your home that creates an unsafe situation because they can have more than one person there. They'll do all the paperwork which is enormous because you want to make sure you get all of that right plus the negotiation.

I think having a third party that can help you negotiate is really critical so you're not the one turning down an offer or countering. They're doing it for you so having that representation for what will be the largest transaction you will ever have, Dorothy, is I think critical and worth the six percent you'll probably pay to do that so I would absolutely affirm that idea. We appreciate your call today very much. Folks, that's going to do it for us today.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I want to say thank you to my team today, Amy Rios, Dan Anderson and Jim Henry providing research today. Thank you for being here. It's been great to be back with you today. We'll look forward to, Lord willing, being here tomorrow. I hope you will join us then and in the meantime, may God bless you. Bye-bye.