Top 10 Personal Finance Mistakes

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. The web portal Excite once turned down an offer to buy Google for $1 million. Today, Google is worth $420 billion. When it comes to financial mistakes, that was a biggie.

I am Rob West. We all make the occasional misstep with our money, not on such an epic scale, but they can be painful nonetheless. Today I'll give you a top 10 of personal finance mistakes to avoid. Then it's on to your calls and questions. 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. And we're stewards of his resources. When you stumble with finances, God is quick to forgive. Psalm 85-5 says, For you, O Lord, are good and forgiving, abounding in steadfast love to all who call upon you. God is there to help you avoid repeating your mistakes or making new ones. James 1-5 says it like this, If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given to him. God's Word contains more than 2300 verses on money and possessions.

Everything you need to be a wise and faithful steward. Now, what mistakes should you avoid? Well, first, borrowing from your 401k comes to mind. It's tempting because it's your money and it's easy to get to, but often this is just to fix an earlier mistake, like going into debt. It's a bad idea because you'll likely reduce or suspend new contributions during the period you're repaying the loan. Well, that will rob you of investment growth from the missed contributions and the cash you borrowed. Mistake number two is claiming Social Security early.

If you take benefits at 62 instead of waiting until your full retirement age of 66 or 67, you'll permanently reduce your benefit by as much as 32 percent. Number three, paying the minimum on your credit cards. If you have a $5000 balance on a card with a fixed rate of 12.5 percent and you make only the minimum payments, it'll take 10 years and $1700 in interest to eliminate that debt. So pay more than the minimum to pay off credit card debt as fast as you can.

Mistake number four is a huge one. It's putting off saving for retirement. You need time to take full advantage of the power of compound earnings. If you start in your 20s saving 10 to 15 percent of your income, you'll be well prepared for the day when you have to stop working. Alright, the number five financial mistake also involves retirement, even though a lot of folks realize it too late. It's bankrolling your kids. You may want to give your children the best college education or wedding that money can buy, but not if it comes at the expense of your own retirement savings. Now, I know that's a tough decision, but if the kids are disappointed, ask them if you can move in with them after you retire.

That might help. Number six is not getting professional financial advice. A lot of folks could have used the services of a trusted advisor when the pandemic hit and stocks plummeted. People panicked and sold stocks low. Others waited to get into the market and missed buying opportunities and the huge gains we've seen over the past year. The number seven personal finance mistake is co-signing a loan. The Bible explicitly tells us never to do it.

Proverbs 17 18 warns, one who lacks sense gives a pledge and puts up security in the presence of his neighbor, and neighbor includes friends, family, or anyone else. By some estimates, 40 percent of co-signers get stuck paying off the loan. Number eight is quitting school. Yes, some people make a ton of money without going to college, and some college grads barely make enough to pay their student loans. But that's not the norm.

In general, the more schooling you have, the more money you make, as long as your studies give you marketable skills that employers really need. Number nine is buying a timeshare. In the vast majority of cases, people really regret this one. So much so that an entire industry of companies has risen that claim to know how to get you out of a timeshare.

That alone should be a warning. And the number 10 money mistake falling for a scam. Con artists can play on your fear or greed to milk you out of thousands of dollars. The FTC says Americans are scammed out of nearly a billion dollars a year. Bogus offers are made by telephone, text, mail, email, and sometimes even face-to-face.

Watch out for guarantees of big profits with no risk, or request to pay a fee before you can receive a prize. So those are the 10 personal finance mistakes to avoid. Your calls are next.

800-525-7000. I'm Rob West and you're listening to MoneyWise Live, biblical wisdom for your financial decisions. Thanks for tuning in to MoneyWise Live. I'm Rob West, your host.

We're so glad you're along with us today. Just a moment, we'll be taking your calls and questions. Here's the number, 800-525-7000.

That's 800-525-7000. We've got a few lines open yet today, and we're looking forward to diving into whatever's on your mind today, applying biblical principles to today's financial decisions. Before we do, I'd love to encourage you to sign up for our brand new MoneyWise Weekly Wisdom.

The first edition went out yesterday, but we'll still get you a copy. It's a weekly email delivered right to your inbox, and it's really an aggregation of the best content for the week in Christian finance and podcasts delivered right to your inbox. I know it'll be an encouragement to you, and here's my experience. As you renew your mind around biblical wisdom related to money management, it will counteract the world's messages, which often are the opposite of God's heart as it relates to our money.

And I think as you begin to dive into this content with quick reads and great podcasts and short videos, you will begin to understand these principles that can then change the way you think and ultimately the way you behave. So sign up today. It's free. Just head to MoneyWiseLive.org. Scroll to the bottom of the page.

When you create a free user account, we'll make sure you get signed up for the MoneyWise Weekly Wisdom, and you'll get your first edition very, very soon. All right. We're going to head to the phones today.

Two lines remain open. 800-525-7000. We're going to begin, and, well, this is a fun one. Walla Walla. Hi, Mary. How are you?

I'm well. Thank you for taking my call. Yes, ma'am.

I was wondering if you could advise us how to make out a will graciously thinking of all the family without causing any hard feelings. Yes. Tell me what you're most concerned about. What is it that's tripping you and your husband up as you think about this? Well, we have a will, and we just made it out so that whichever one of the kids was able to do the executor, you know, divvying up everything and taking care of our expenses, whatever.

But, you know, now the oldest one who was distant before is closer by, and, you know, it's just they haven't always gotten along real great. Yes. So I just don't want a big trouble after we're gone. Yes. Okay.

Well, a couple of things. I mean, so there's the executor selection, and then there's obviously the distribution of your assets. In terms of who should be the executor, you know, this is somebody whose personality, I think, and responsibility level warrants this type of role. You want obviously responsible parties. I would look for somebody in good financial standing.

You know, location doesn't usually matter, and you're going to want somebody who really is more detail-oriented and someone who can be patient and I think even emotionally grounded because, you know, oftentimes it's very simple, cut and dry, but not always. And so somebody who really just is wired that way, and again, it doesn't have to be the oldest, and it doesn't have to be the person closest. So just make sure you pick the person that you believe is most suited for that role of executor, and I don't think you need to worry about offending anybody.

That's just a job that needs to be done, and God hasn't wired us all the same. We all have different money personalities, and, you know, that plays into, I think, this role as executor. Now, are you also struggling, Mary, with how to divvy up the assets, or is that pretty clear to you? Well, we don't have a lot of assets, but I would like to include everybody, but then, you know, as time goes on, things change.

Yes. Well, I think one of the things to think about is, obviously, you are the steward, you and your husband, of these assets, however much or however little you have, and this is the last stewardship decision you'll make. And so you want to think about the financial standing of each person, you also want to think about the lifestyle that they're living, and even their spiritual condition, because we wouldn't want this to get in the way of somebody coming to Christ, which is the ultimate objective.

If somebody is making poor decisions, money can often make those larger, and so, you know, we have to think through that side of it as well. And there's this principle that the author Ron Blue, my good friend and mentor, talks about in his book, Splitting Errors, which, by the way, I'll get you a copy of that as our gift, because I think it really could help you and your husband think through this with confidence, according to Biblical truth. But he shares this principle that if you love your kids equally, you will treat them uniquely. Now that's interesting, because as Americans, I'll say, often we think that's unfair to think that we would do something that's inequitable, meaning we should give exactly the same amount to each child, and his point is that perhaps they're in different situations. You know, one child might be a single mom with three kids, and another a successful business owner.

It doesn't mean you need to leave them the same amount, and that will change over time, and that's okay. And so, you and your husband may pray through this and decide, no, we want to be exactly equitable, and that's fine too, but at least I think you should have the permission to say, we're going to evaluate each child or each heir, think about where they're at, and then make decisions accordingly based on where they find themselves today. And as the steward, I think that's your responsibility, and then you can absolutely communicate that clearly, so that's all been laid out in advance. But let me do this. Let me send you a copy of this book.

It's called Splitting Errors. It's, I believe, the very best book on processing wealth transfer from a Biblical perspective using a principle-based approach. And I think as you and your husband read it together, perhaps it will clear up some questions you've got in your mind about how you should go about this. And Mary, I hope that helps you. You stay on the line. We'll get your information and get that book right out to you. To Vern Dale, Minnesota. Jay, thank you for holding. Sir, how can I help? Well, I appreciate you taking my call.

Enjoy your show when I'm on the road mostly. My wife and I are looking at retiring within the next five years. I'm 57, she's 55, and we've got a pretty heavy stand in the market, and just wondering if it's time to get out. Yeah.

Well, here's the thing. When you say get out, I think that's somewhat of a loaded question in the sense that, yes, you should be moving toward a more conservative posture as you get closer and closer to retirement. As you have time on your side, when you're early in your working career, you can be more aggressive because you've got time for an account that will be more volatile to recover if it has some significant declines. And the goal would be that you'd have higher returns over an annualized basis as you look at a 10-year or 20-year period. But as you get closer and closer to retirement and you've accumulated what you have, you don't need and probably shouldn't be as aggressive. You need to get more conservative because you're going to get to a point where you don't have that time horizon to necessarily let all of your portfolio recover. If you're 100% invested in stocks, I would want you to say to me, Rob, I could get a statement and over a quarter's time be down 35% on my portfolio and be okay with that. Not that you'd like it, but you'd be okay with it and not be rushing to make changes and move to cash, but you'd be comfortable waiting for it to recover, which may take a year or two. Now, last April, May, when the pandemic was raging the first time, we saw those kinds of declines, but it came back very quickly. It was the fastest move to a bear market and the fastest recovery we've ever seen.

Doesn't typically work like that. Normally, we'd hit a recession that would be systemic and it would take quite a while, maybe a year or two to recover, and I'd want you to be able to wait for that. But that probably is not prudent as you get closer to retirement, which is why you would want to move more and more toward fixed income, stable type investments. Now, in retirement, it doesn't mean you're completely out of the stock market, though, for most people, because here's why.

When you reach age 65, life expectancy increases to 83 and 84 years old for men and women, and if the Lord tarries and you're in good health, that portfolio perhaps needs to last for several decades or more because people are living longer. And so the equity or the stock portion of that portfolio, even if it's only 20 or 30 percent, is somewhat of the engine that's going to get those returns on an aggregate basis up one or two or three percentage points so that you have the ability to get higher returns than you might have in a straight fixed income portfolio. But if the market was down related to that recession I mentioned, then you wouldn't touch that part of the portfolio until it fully recovered and moved to higher ground. So I think you should be moving toward a more conservative position, but that doesn't mean we exit the market altogether for the reasons I mentioned. Last thing I would say is this really underscores the need, Jay, to have a professional advisor who's walking with you, who can make these decisions, who's arm's length and can help you build the appropriate portfolio that's consistent with your goals, objectives, and risk tolerance.

But I've got just a minute left before my first break. Give me your thoughts. Do you have a percentage in mind? I mean, what percentage maybe should be in the market at this stage in our life?

Well, yeah. I mean, I can give you a rule of thumb, but that's all it is because it really depends upon what do you have in the way of investable assets and how does that relate to what you ultimately need to be able to generate, let's say, the income shortfall you have beyond Social Security at a 4% rate of return so that the portfolio lasts the rest of your life. And a lot of that is going to dictate it. If you've over-accumulated, you could get even more conservative. But that rule of thumb I mentioned used to be 100 minus your age. Now we typically say 110 minus your age. If you were 55 years old, that would put your stock position at about 55% and your bond position at 45%. And then as you get older, that would decline.

At 65, it would be 45% and 75, 35% and so on. That at least gives you a starting point. But again, that doesn't replace real retirement planning from a professional that can really help you analyze and think through all of this for you based on your goals and objectives. Hey, more to come on MoneyWiseLive. All the lines are full, but we've got some great questions coming up.

So stay tuned for a lot right around the corner. We'll be right back. We're grateful you've joined us today for MoneyWiseLive, biblical wisdom for your financial decisions. We've got a couple of lines open. 800-525-7000.

That's 800-525-7000. Hey, have you participated in our MoneyWise community? We'd love for you to do that. At MoneyWiseLive.org, just click the Community button and you can create a free account and then ask questions. You'll hear responses from others in the MoneyWise community as well as our MoneyWise coaches. So if you have a burning question you've not been able to get through or perhaps you didn't want to ask it on the air, perhaps the MoneyWise community is the place for you.

You can find it again at MoneyWiseLive.org. In just a moment, we'll be going to Tuscaloosa, Alabama, the home of the Alabama Crimson Tide. We'll be in Hampshire, Illinois and Island Lake.

But first, actually, Sonya is in Tuscaloosa as well. Good afternoon. Hello. How are you? Great. How can I help you?

I have a question. I have about 135,000 in a 401k with a company that I'm no longer full-time with there. I'm just part-time now because I switch companies. What is the best thing to do with that money?

Put it in an IRA? I really have no clue. Okay. And did you say you went to part-time, so does that mean then you are with the same company or you've moved to a different company? I'm still with that company part-time, so I'm contributing to my 401k, but they're no longer.

And the company I've moved to, I'm not eligible yet to start a 401k there. I see. Okay. How long before you will be eligible?

Well, when I can go full-time and I'm not sure, maybe a year or two, three, maybe. Okay. Then I probably would be looking to roll this to an IRA, but before you do that, I would want you to really decide how you're going to go about managing the money in there. How much do you have roughly in this 401k?

About 135,000. Okay. Yeah, so there's a significant sum of money in there, which means you don't want to just put that on autopilot. And one of the benefits of an IRA is that you open up the entire investment universe to yourself. The downside to that is you have the entire investment universe, so you have to decide what to buy and sell, and you're not limited to just a very few investment choices.

That's a good thing, but I think you're going to need some help in doing that. So what I would think about doing, Sonia, is interviewing a couple of Certified Kingdom Advisors there in Tuscaloosa, investment professionals, to find one that you're comfortable with, so that when you roll this out to an IRA, you've already determined who's going to take responsibility for managing this money according to your goals and objectives. You know, this person would really understand you and what God's doing in your life and your age and your risk tolerance and marital status, and together talk about what you want to try to accomplish with this portfolio, and then that professional could then take responsibility for making and building that portfolio of investments that's consistent with all of those objectives. I would want you to have that determined in advance, and then once you do that, if that's the direction you go, you'd open that IRA at the custodian that that particular investment professional works with. It could be one of several.

Typically, they work with more than one. And then the assets would be transferred into the IRA. That's not a taxable event. And then once it comes in in the form of cash, it would be able to be deployed in the stock market. That's probably the best option because you have a lot more control over the fees that are paid, the investments that are selected, and you're not limited just to those few investment choices inside the 401k.

If you had already started and were eligible with a company that allowed a new 401k, you could look at just rolling it into that new 401k, but given that you may have a year or more before that is available to you, I think the IRA is the best approach. To find a CKA there in Tuscaloosa, just head to our website, MoneyWiseLive.org. You'll see a button that says Find a CKA.

You can search by city, state or zip code. Again, I'd interview two or three, find the one that's the best fit, and then go from there. All the best to you as you transition to a different work status and perhaps free up time for other things that you're excited about. Thanks for your call today. 800-525-7000.

Stay with us. Thanks for joining us for MoneyWise Live. I'm Rob West, your host, taking your calls and questions on anything financial. Here's the number, 800-525-7000. Hey, would you like to connect with one of our MoneyWise coaches? We'd be happy for you to do that. If you head to our website, MoneyWiseLive.org, we have trained volunteer coaches that are delighted to walk alongside you to help you set up a spending plan, perhaps answer some of your questions, even teach you many of the biblical principles related to money management we talk about here on the program. So just head to MoneyWiseLive.org and click connect with a coach. Well, we're going to head back to the phones. Next up, Island Lake, Illinois, WMVI.

Tim, good afternoon, sir. How can I help? I was wondering what you think about, in your opinion, is why is the United States dragging its feet like on ABC and American Bitcoin? I would like to get into cryptocurrency, but I'm a little edgy about it. And it seems like some other nations like China are taking the lead on it. I see nothing wrong with the United States having fiat and crypto.

What do you think? Well, it's true. The U.S. does rank, I believe, fifth in the percentage of the population using cryptocurrencies behind, interestingly, Ukraine, Russia, Venezuela, even Kenya. It's probably because those countries don't trust their currencies. And I suspect a lot of the cryptocurrency owners aren't necessarily investors.

They're using them to purchase things. And many folks see these cryptocurrencies like Bitcoin as a hedge against inflation. Now, I think it's probably too soon to say that that's the case.

In fact, we've seen just the opposite happen in certain cases. But a lot of investors believe that as the economy continues to grow and as folks lose trust in fiat currencies because of the incredible money printing we've seen by the central banks around the world, that it will drive up these cryptocurrencies like Bitcoin. And again, it could serve as a hedge against inflation into the future. Again, it's still too early to know exactly how they're going to respond.

And so I think that's why we need to take a wait and see. The technology is clearly here to stay and these things aren't going away. I'm of the opinion they shouldn't be used in our investment portfolios just because of the speculative nature and the incredible volatility that we're seeing. Others disagree and many fortunes have been made in a very short period of time, but I think an equal amount have lost a significant sum of money and that volatility would just cause me to stay away. But I think because of the sound nature of our economy and our banking system, that's why folks here in the States haven't seen as much need to move into these cryptocurrencies as some other nations around the world. Does that make sense, though? Well, my question was, what about the federal government getting involved?

Crypto, I would like it. It has its values, but I just recently had a disaster with my first crack at it. And there was nobody I can contact. It was like, go to WWW, take a hike. And that took you to WW, fly a kite, which took me in the turn.

WW, go hang yourself, which was probably the best of the three. I think the key is regulated. I see nothing wrong with that. Yeah, yeah, we're not going to see that. These central banks, I don't believe, are going to get involved at that level. You know, part of what makes these cryptocurrencies what they are is that they are unregulated.

And there's a lot of folks that like that aspect of them because they don't want, quote unquote, manipulation involved. So I don't think we're going to see that. I think the US banking system and Federal Reserve is going to stay the course. The way we have been and stay away and use other means to create digital transactions apart from this blockchain technology. So if that's what you're waiting for, I think you're going to be waiting a long time. You never know what could happen down the road, but I don't see the US making a move in that way. But clearly, we're going to see greater and greater adoption over time by people using the cryptocurrencies as a means of exchange and as a currency.

And it'll be a fascinating case study to watch this unfold. But Tim, we appreciate you calling today and thanks for being a part of the program. To Hampshire, Illinois, Amanda, thanks for your call. How can I help? Yes.

Hi, thank you for taking my call. We've been contributing to my husband's 401k. His company matches up to 6% of the contributions.

We've been only putting in 3% with his plan. I just recently got a full time job that's offering a 401k. Should we start that with me and my job? Or should we take the additional income and max out on my husband's up to the 6% since they match?

My job does not match the contributions. Yeah, I would absolutely start with your husband's until you, at a minimum, get the full value of the match at 6% before you start putting money into yours. Recognizing these are both assets that you're, as a married couple, going to have access to in your retirement season. And so the question is, how do you get the most return on God's money? And clearly somebody willing to give you 100% immediate guaranteed return, i.e.

a match, is something you're not going to find anywhere else. So let's take advantage of that free money to build that portfolio quicker. Now, once you get to 6%, I would say your goal should be to get to 10-15% of your pay going into retirement assets as you're able to. You wouldn't want to max it out if you had credit card debt or you needed to save for a short term expense or you didn't have your emergency fund in place. Those would come first, but assuming those are taken care of, a goal of 10-15% going into retirement accounts would be ideal. And I would say you'd absolutely want to make sure you take advantage of both plans, but start with fully maximizing that 6% before you do anything else from a retirement perspective. Does that make sense?

Yeah, it sure does. Now, from the transition of my other job, we have money that we had rolled into an IRA. There's about $8,000 in there.

Should we just leave that in this whole transitional process? Yeah, there's nothing else you can do with that. Once it's in an IRA, you can't move it back into a 401k. So yeah, I would just make sure that that's invested. You'd probably want to use some exchange-traded funds.

You could look at Schwab Intelligent Portfolios or Betterment or you could head over to soundmindinvesting.org and the Soundmind Investing newsletter would give you some great mutual fund options you could use. So as long as it's invested, because even though it's probably not a huge part of your total retirement assets today, but $8,000 is $8,000 and we don't want to just park there. So get it working for you if it's not already, but then yeah, you don't need to add to that right now.

I'd focus on getting up to that 6% and then over time, you could make that a part of what you use to contribute, but I'd focus on the 401ks in the meantime. Wonderful. Thank you so much for your help. Have a great weekend. And you as well, Amanda.

Thank you for your call today. Well, those are the kinds of questions we deal with, but we'd love to hear from you. You know, what I love about this program is being invited into your stories as God is really allowing your money story to be part of what he's doing in your life. You know, the question is, what does the way we're using money say about what's most important to us? And do we like the story that that tells? Or do we need to make some changes? Because here's the reality. Money is not an end.

It's a tool to accomplish God's purposes, but that's often not the way the world sees it. So we need to reshape our thinking and align our hearts with God's heart as we manage his money. Let's do that together. Give us a call.

800-525-7000. I'm Rob West. This is MoneyWise Live. We're going to take a quick break.

We're back with more right after this. So why do we take an hour each day to talk about money? Well, we believe this is a critical part of our lives, not just our financial lives, but the whole of our lives. You know, my experience is that your money journey is one of the key way God shapes your spiritual journey. The question is, is money competing with God for first place in our lives, or are we seeing it as a tool to accomplish his purposes? Well, that's what we're aiming for here on MoneyWise Live each day to renew our minds and think about our money, this powerful tool, the way God thinks about it, and it's on his heart.

And the key is we've got to hold it loosely, we've got to live with contentment, and we've got to use it to accomplish his purposes. Let's do that together. We head back to Tuscaloosa, Alabama. Lori, with the first home game this weekend, Tuscaloosa is going to be pretty busy, I guess, tomorrow, huh? Oh, yes, sir. It will be very busy. And funny that I'm headed to Ole Miss, so I'm going to a different game. Well, I'll tell you, Ole Miss looked great this weekend. Not that we're going to talk football here, but how can I help you?

Yes, sir. Unfortunately, I'm going through a divorce, and at the end of the divorce, when everything is final, I will have enough money to pay the house off that I'm about to close on, but I have no retirement. I've been a stay-at-home mom until the past two years, and I've been blessed in real estate for the past couple of years, but that industry is up and down, so it makes me a little nervous. I don't know if peace of mind is what I'm going for, or I need to just concentrate on just praying the principal down slowly, or I just wanted your advice on that, please. Yeah, well, first of all, I'm sorry to hear that, Lori, and the Lord's going to be near to you. We're going to ask our MoneyWise Live community to be praying for you as you navigate into this next season. Your main question right now is should you pay off the house versus hanging on to the assets that you have and perhaps investing? Is that really the primary question? Yes, and I mean, I could pay extra on the principal as I go, but there's something about just having that house paid off that gives me a peace of mind, too.

Well, I can certainly understand that. Tell me the status of the home. What is it worth, and what do you owe on it today? So, it's worth $248, and I would owe $196, and I would have enough money and have about three to four months of living expenses left. Okay, so in the divorce settlement, you're saying you're going to get enough to pay off the $190,000 mortgage, but that would basically deplete all of your investable assets, is that right? No, I would have about $22,000 to $25,000 left over. Okay, so that could serve as your emergency fund, but yeah, to your point, you wouldn't have the money at that point to invest or beyond that, which you would have just in a liquid emergency fund. My first position or posture would be that that's going to put you, it's going to deplete all of your investable assets besides this emergency fund, and that's probably not a great thing. Now, I don't want to dismiss the peace of mind that you're talking about by having your home paid off, free and clear.

That's a big deal, and that's real. And I think we need to think and pray through that, and if the Lord convicts you just to get that house paid off, and then that's going to free up more money on a monthly basis that you could then systematically put into retirement accounts as a realtor. You could open a SEP IRA or something like that, and then just begin building from there because your lifestyle would be lower, and you'd have that peace of mind. The flip side is that if you needed to access some funds for some unforeseen event beyond the emergency funds that you'd have, it would be all tied up in the house. Of course, you could sell it, but it'd be an illiquid asset.

So, I think this really does come down to a conviction issue. And if you're going to sleep better at night, Laurie, knowing that that house is paid for, and you're then able to live your budget accordingly so that you take the equivalent of that mortgage payment and you begin to put that away systematically every month, I would certainly be okay with that. But if you said, you know what, I'm okay with the mortgage payment.

Historically, even though my income is variable on average, conservatively I should have just what I need to be able to cover all my bills, including the mortgage. And I'd rather deploy this $190,000 so that can begin compounding and working for me over time. I could go that approach as well. So, I don't have a strong position one way or the other. I think it's ultimately going to come down to in this season of life where there's a lot of uncertainty and a lot new, if you're going to sleep better at night knowing that house is paid for, then I'd say go for it.

You know, when we look to Scripture, we see this idea that we should move toward being debt-free over time, and I think the Lord would honor that decision. So, give me your thoughts just on some of what I've shared. Well, that's basically where I'm at. I will have my 15-year-old daughter, and she will be driving soon. Therefore, my insurance will go up. There's certain things that will change here shortly, and this will be new to me.

I've been a stay-at-home mom for a long time, but there is a huge peace of mind that comes with having it paid for. And I'm blessed with family that has followed your principles, Ron Blue's principles, and I know that they would help me if I needed it. I wouldn't want to do that, but I know that they would. Sure. And you're planning on staying in this home for the foreseeable future? Yes, sir. Yes, sir. All right.

Very good. Well, you know, I think I wouldn't do anything right away. I would just allow this to play out. Obviously, this is something that's still occurring, and it doesn't sound like it's even been finalized yet, so I don't think this is a decision you need to make quickly. Perhaps you even wait six months just to kind of sit with this. Don't invest that money. Put it in a high-yield savings account with FDIC insurance so it's protected. It's not going anywhere. And then just transition into this new reality of you working, and you've got this precious daughter that's at a critical age of 15, about to start driving.

There's a lot of changes going on. So making a decision like this to pay off the home, I think, right away is probably not the best one unless you just absolutely feel like the Lord is leading you to do that. But perhaps saying, I'm going to take six months. I'm going to see how this goes with my budget moving forward. I'm going to figure out what it takes to fund my lifestyle, and I want to think and pray through this before I make that decision.

If you decided that what you needed to do to have the peace of mind and the security you're looking for with a lot of other things in flux was to pay off that home, I wouldn't have any problem with that, Laurie. I think that would be a good decision, but perhaps just not right away, okay? Well, I really thank you for your wisdom that you share every day. Thank you.

Well, thank you. Let me pray for you before we let you go. Father, we just lift up Laurie and her precious daughter. Lord, just be near to her in this difficult season. Lord, we know you've said you'll never leave us or forsake us, and so we're going to cling to that, Lord. And I just pray that you give her wisdom on how to navigate your finances moving forward. I pray that you'd provide and bless her desire to be found faithful in her relationship with you as a parent, but also as a steward of your resources. So, Lord, we know you're right next to her, and we just want to thank you for that in advance and look forward to seeing what you're going to do in this next season of her life. We ask all this in Christ's name. Amen. God bless you, Laurie, and thank you for your call today.

Tampa, Florida. Judy, thank you for holding. How can I help you?

Yes, yes. Thanks for taking my call. I was calling to see how you felt about critical illness insurance. I have a supplementary insurance and also a Medicare uncovered, and that's pretty good. But this critical illness pays you like a lump sum if you get cancer, heart attack, stroke, or kidney failure. They did pay out a lump sum in 2014, so I'm still paying on the policy, so I can't get covered for that anymore, just the other three. You think it's worth me doing that, or should I use that money, put in an emergency fund, or invest it?

Well, it's a good question. Obviously, you've benefited from it, so it's been of value to you. The thinking for these policies is that these emergencies or illnesses that you mentioned—heart attack, stroke, cancer—incur greater than average medical costs, so these policies pay out cash to cover the overruns where maybe traditional health insurance falls short.

The challenge is that Consumer Reports says that it's rarely worth the money, even though it can give you some additional peace of mind. So unless you just felt really strongly about it, I'd say on average the general consensus is that you could do better by not putting this money there. Now, if you don't have enough in your emergency fund to cover deductibles and so forth by your regular health policy, it might make sense to pay $50 or $75 a month for a critical illness policy, depending upon your age. But I think if you have that emergency fund in place, and that may take you some time to get there, then I would say at that point you may want to consider dropping it because you've got what you need to cover those deductibles, and you could take this money and redeploy it elsewhere in your budget. So general consensus is probably not the best use of funds, but let's not drop anything until you have that emergency fund fully funded, and we appreciate your call today, Judy.

Dennis in Chicago, I've got just a few seconds left. I understand, Dennis, you received a cash settlement from an insurance company, about $35,000. You don't need the money, so that tells me you have an emergency fund in place.

Is that right? Well, I do. The thing is that I can't invest it. I can't put it in a bank or CDs are paying nothing.

So what do you think I should do? Like put it in a mutual fund? Yeah, if you've got an emergency fund and this is money you can have a 10-year time horizon on, I think putting it into a high-quality either stock mutual fund or a balanced fund with stocks and bonds makes a lot of sense, and just let that grow over time and let compounding do its work. I'd head to soundmindinvesting.org, Dennis.

The Soundmind Investing newsletter will give you some great mutual fund suggestions, and they'll update those every month and you can change them over time, and I think that'll give you what you need. We appreciate your call today and thank you for your patience. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Thank you to Amy and Dan, and thank you to Eric and Jim, the team that makes this happen. Thank you for being here as well. Come back and join us on Monday, will you? In the meantime, may God bless you. Bye-bye.