Slaying the Paper Piles

Do you have piles of paper on your desk at home? Never sure which receipts, statements and documents to save and which to shred?

Well, you're not alone. Hi, I'm Rob West. Even the best household money managers struggle with paper clutter. But if you're ready to dig your way out and slay those piles of paper, I'll share a simple way to do it. 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. Obviously, God's Word has nothing to say about the pound of junk mail that lands in your mailbox every day or how you should organize files of stuff you need to keep.

But Romans 13.7 does say this, Pay to all what is owed to them, taxes to whom taxes are owed, revenue to whom revenue is owed. It's pretty hard to do that if you don't have some kind of record keeping system in place and you're not sure what papers you need to keep or for how long. Did you know that by some estimates you can toss at least half of everything that ends up in your mailbox? It's junk mail and other things you don't need to keep. But you should never just toss unwanted mail directly into your recycling bin or trash can.

It could contain unwanted credit offers that identity thieves could use to open accounts in your name. So, if you don't already have one, the first thing you need to get is a shredder. But not just any shredder. You want one that makes cross cuts. In one pass it will cut the paper into strips and then cross chop those strips into tiny pieces. You can take it a step further and get a micro cut shredder. It does the same thing but the cross cuts are really, really small. You can get a cross cut shredder starting at around $50 and a micro cut for around $100. It's a worthwhile investment to know that dumpster diving thieves can't get your personal information. Okay, so now you've got your shredder warmed up and you're ready to go.

You just need to know what to feed into it. And for that you'll set up a three drawer system based on how long you need to hang on to things. Anything that doesn't go into one of the three drawers goes straight into the shredder. So, in your first drawer go documents that you need to keep permanently.

These are things like your birth certificate, passport, car titles, property deeds, marriage certificates and your social security card. Those items are difficult to replace so you need to keep them safe. And speaking of safes, it's a good idea to keep those things in a fireproof safe.

You can get one for as little as $20 on up to $1000 or more. I know it's more money to shell out but in case of a fire, it's good to know that those valuable documents will survive. There are a few other things you should keep in your fireproof safe. You'll also want to permanently store your Roth IRA contribution history and any medical receipts if you have a health savings account.

Those items may come in handy for many years. You may be asking, why keep Roth statements? It's because your Roth contributions aren't recorded anywhere in your tax documents. So if you decide to withdraw Roth funds before you reach the age of 59 and a half, you have to know your basis or how much you've contributed with after tax income. You're not taxed on that amount if you withdraw early.

Twenty years from now that information could come in very handy. And speaking of taxes, let's move on to drawer number two and giving unto Caesar. In there you'll keep anything you need to fill out your 1040 including supporting forms like W-2s and 1099s. Definitely anything where the IRS was also mailed a copy. In an attempt to be helpful, the IRS advises you to keep those documents for three to seven years. But which is it?

Three or seven? It's best to not take chances. I'd hang on to all of your tax docs for at least seven years and then you should be safe to toss them. The IRS rarely looks back more than six years.

But keep in mind, there's no statute of limitations on the IRS taking you to court for tax fraud, which of course you would never do. But if you've got the space, why throw out any tax documents? Now, so far you're probably thinking, I'm not making much progress cleaning up the paper clutter. Well, we've just been laying the foundation for your efficient record keeping system, establishing what not to throw out, which brings us to drawer number three. In there you'll put all the material you need to keep for just one year. Things like utility bills, bank statements, pay stubs and bills. After that, you can feed them straight into your shredder.

There's one exception though. If you're self-employed with a home office, for example, some of the one year items can be declared as expenses and you need to move those over to drawer number two and keep them for seven years. After you've done all that, you should be left with a huge pile of useless paper. Now the shredding can begin in earnest when it's finished.

You'll have a lot more room for your coffee cup and pictures of your kids. Your calls are next 800-525-7000. This is MoneyWise Live. I'm Rob West and we'll be right back. Thanks for tuning in to MoneyWise Live.

I'm Rob West, your host. This is biblical wisdom for your financial decisions. What's on your mind today? Is it saving or giving?

Perhaps it's retirement or your credit score. We're going to tackle a host of issues today. We've got some lines open though. We'd love to hear from you. Here's the number 800-525-7000. In just a moment, we're going to talk to Ora in Florida about her credit score and it's the impact on that score when a card gets closed. But first to Esther in Maryland. Thank you for your patience. And Esther, you're our first caller.

How can I help? Yes. Hi.

I'm so very happy to be able to speak with you, Rob West. And my question is that my husband is 70 this year and he's wanting to retire at the end of the year and I'm 72, older woman. But anyway, I became disabled in 1997 and have not worked since. We're both on Medicare.

My husband, I think, took it at 65 and I took mine when I took off work. The question is we have a house that my husband built in 2008. The floors are the only thing that needs to be put down and also the bathroom tile. And my husband came into an inheritance, unfortunately. Someone we loved dearly passed on and we have the inheritance enough to pay the house completely off. And my question is it doesn't leave a lot of savings. We have 30,000 in savings, which isn't much at our age, but I have a CD that's 2,800 and an IRE that's 34,000. And I figured up all the expenses here. And at the end of the month, we would only have 148 to save, which would total out to 1,776 a year if we're very careful.

And we have no, we'll be debt free. Okay. Very good.

Yeah, it makes a lot of sense. First of all, Esther, I'm sorry to hear about your family members passing but I'm glad you're being thoughtful about how to use these resources. I love the idea of you all being debt free, especially with you living off of social security and him transitioning out of the workforce. I'm glad to hear you've done a budget that's essential for you to understand what your monthly need is so you can order your finances accordingly. Clearly, if you pay off the home, that's going to make that even easier because you'll eliminate that mortgage payment. How much would that free up on a monthly basis?

Oh, gee, I figured everything but that. We would bring in $3,996 a month and it would free up because we were on a variable rate, which is really bad. It would free up right now almost $2,400.

And also my husband wouldn't have to pay the taxes anymore once he retires and because Maryland the taxes is there, you know, for you have to pay taxes, but we would have to pay the property tax. Yes, of course. Forest management that my husband was talking about and that would cut that payment and that in half he feels. Okay, so let me just make sure I'm clear. When you said you did your budget and you'd have about 100 left over or so on a monthly basis, you were including the mortgage payment in that or not? No. Okay, so it really requires you to pay off the home in order to make your budget balance.

Otherwise, you'd have to pull money out of this inheritance every month once you retire to be able to cover your expenses and the mortgage payment. Is that correct? That's correct. That's why we need to pay everything, you know, pay everything off so we can make it. Yeah. So, you know, I'm on board with that.

I mean, it's your age and stage of life. I'd love for you to have 12 months expenses in savings. So if you're living on, you know, $3,900, I'd love for you to have about $45,000, which is a little more than you have today. It sounds like you have about $30,000 or so.

So I think you've got two options at this point. Option one is, yeah, you just go ahead and pay it off. You know, the challenge is we're left with, you know, not a whole lot, but at least the budget balances and you've got $100 margin or a couple of thousand a year that you could continue to boost your savings. If something came out of left field though, you'd have to take a home equity loan or do something like that. The other approach is to refinance this at a low fixed rate, you know, with a much smaller balance. So let's say you carry a small $50,000 mortgage, you know, at a two and a half percent interest rate, which allows you to keep, you know, maybe another 50 or so plus the 30. So now you have $80,000 in savings to kind of fall back on if you need it.

You know, that might give you a little bit more peace of mind. So you're not kind of cash poor in terms of, you know, not having a whole lot to fall back on and having everything tied up into your home. And then, you know, because you have that much smaller payment, you know, hopefully everything still balances.

And, you know, I'd be looking at probably a 10 year mortgage so that, you know, in the next 10 years, the house is paid off free and clear. But if you all feel like, you know, you recognize that you don't have a lot to fall back on, the budget's going to be tight, so you're going to have to be very careful there and you just would have a lot more peace of mind knowing that the house is paid off in full, then I would say, you know, by all means, go ahead. Does that make sense though? Absolutely. Yeah.

I actually thought about what you just said, like, like not paying the whole mortgage off, but my husband wants to pay the whole mortgage off and that sounds good too. Okay. Yeah. Yeah. And that makes sense to me.

I mean, I think you all would feel better knowing you own your home free and clear. Yes, you're using up these funds, but by God's grace, you have them. Right.

And so let's rejoice in that. And then it sounds like you're very conscientious and careful with your spending plan. It's going to be critical that you remain that way. And you know, I think over time you will see that if you stay focused on your budget, as long as something doesn't come out unexpected, then you should be okay. At the very least, you could look at other options like a reverse mortgage or selling and downsizing at some point down the road. The good news is you'll be completely debt free, which gives you ultimate freedom and flexibility. So I like either plan.

And if you all have a conviction around paying it off, then I would say go for it and don't look back. And we appreciate you checking in with us, Esther. May the Lord bless you. Eight hundred, five, two, five, seven thousand to Lee.

Hey, excuse me, Lehigh Acres, Florida. Hi, how can I help? Hi, thanks for taking my call. And I want you to know how much we appreciate the knowledge that you guys share with us. You know, every day we learn something more.

That's very sweet. You know, my question is my son told my husband that, OK, if our credit card is closed, you know, it's that it will lower our FIFO score and because them closing the company. Is that true? Why would they be closing it? Because of inactivity or some other reason? Inactivity, inactivity, you know, their interest rate is just so high and we've just decided not to use the card anymore. Yeah.

Well, and that's very common. Or you'll see that in the fine print that if they give you a period by which if you don't use the card in a certain length of time, they can close it. The reason is that they want to make sure that the limit that's been allocated to you is really not doing them any benefit if you're not using it. They'd rather extend it to somebody who's going to charge and not pay it back.

And then they can charge those exorbitant interest rates. The question, though, is by that being closed due to an activity and not for any other reason, is that going to affect you negatively? It may temporarily. It would be temporary and it wouldn't be significant.

Here's the reason why, Ora. What's interesting is that it's all about the debt to limit ratio. And so in your credit scoring model is the total limit that's been extended to you across all of your accounts versus the balances that you're carrying specifically in the revolving credit area.

And when that account is closed, that reduces the overall limit that's been extended to you in the aggregate, which means any balances you're carrying are a higher percentage of the total that you have. But if you're paying everything off every month and that's probably not a consideration. The other thing that it changes is perhaps the length of your credit history if this is an account that you've had for a while. The other factor is the kinds of credit that you have.

It could change that mix as well. But the bottom line is, if you follow biblical principles of managing money, you're managing your money wisely, living within your means, paying off your debt, paying on time, anything that you owe, any temporary reduction in your credit score would be just that. I wouldn't give it a second thought. If this is a card you're not using, I'd rather you close it because then it's less susceptible to fraud.

Nobody can tap into it. Thanks for your call today. 800-525-7000. We'll be right back. Thanks for tuning in to MoneyWise Live. Here at MoneyWise Media, our goal is to help you know God's heart as it relates to managing his money. We do that through teaching, whether it's our content here on the air each day or on our website under the Learn tab at MoneyWiseLive.org, through helping you manage God's money wisely, that's our innovative tools like our MoneyWise app where you can manage your money using our digital envelope system, or through connecting.

That's right. We want to connect you with other stewards to encourage you on the way as well as experts who can guide you and walk with you, whether you need a MoneyWise coach for a spending plan or a debt reduction plan or a Certified Kingdom Advisor professional. But as we help you learn, manage and connect, our hope is that you can really move forward with confidence to live with contentment and peace of mind. If you want to engage with any of that, we'd encourage you to visit our website MoneyWiseLive.org. Great content and tools and resources. You can also post a question in the MoneyWise community and get an answer from our coaches and others on the journey.

Again, MoneyWiseLive.org. We've got, let's see, one line open, 800-525-7000. Let's head next to Cleveland, Ohio, WCRF. Hi, Michelle, go ahead. Hi, thank you for taking my call.

I just have a real quick question. I wanted to consolidate a few different 401k and 403b plans. And I start a new job next week. And my question is, and I've looked on the individual IRA type groups, and I see that the fees vary. And I looked at Betterments and they say it's about half of what I'm paying now with the person managing my funds.

So would you recommend that I roll all of these into my new employers' fund or do the individual IRA? And then do those, like the Betterments and that, do they have the ability to just up the fees at random? And then do they do the same investments as something like, do they have the same exposure to the same funds as like a Fidelity or one of the more widely known groups? Sure, sure. Yeah.

Great questions there, Michelle. Let me just make sure I understand the pieces in part. So you have an IRA currently that's being managed by an advisor in addition to an old 401k and 403b.

Did I get that right? Yeah. The person I'm referring to as the advisor is the one that manages the employer that I'm leaving. So when I leave that employer, I'd like to kind of like put all the funds in the same pool. I see. Yeah, that makes sense. So you don't have an individual retirement account, an IRA, separate from the old 401k?

Correct. OK. And what do you have in retirement assets in that old 401k plus your new plan, if there's already anything in there? What's the total? It's about $450,000. OK. And obviously, the majority of that is in that 401k with the company you're leaving? Actually, no, that's from a previous employer. OK. And the majority of that $450,000 is there, is that correct? Yes. OK. Great.

Yeah. So, you know, this is a significant sum of money, obviously. You've worked hard and sacrificed to put this money away.

I suspect it's grown quite a bit. And so as you think about where to go from here, I actually would favor with this amount of money, you working with an investment advisor, an individual. Yes, you're going to pay a little bit more than you would with a robo-advisor solution and more than if you were to just roll it into the 401k.

The reason, though, that I think that's worth it is with this amount of money, I think you want somebody who's going to be a little bit more hands-on. Essentially, with the robo-advisor solution, although, as you said, it's probably half or perhaps more, it's probably even less than half of what you'd pay with the advisor, it's essentially and kind of an autopilot solution that uses exchange-traded funds. So in the case of Betterment, you'd own indexes that cover the broad market. And those indexes would be based on some allocation of stocks and bonds that's consistent with your age and objectives. So you'd own the broad market. It's a passive investment strategy that's intended just to capture the moves of the market over time.

And there's some basis for why you might want to do that. The benefit, though, to an advisor actually taking control of this is there can be a bit more hands-on in terms of the allocation, the investment strategy, the tax efficiency of this. If you want to do any giving, that can be factored into this using appreciated assets over time, once you have a required minimum distribution down the road. So you get what you pay for, and I think there's a good case with this amount of money to have somebody looking after it on a regular basis.

The downside of the 401k with this amount is you're limited in those investment options to just a few investments inside the 401k as opposed to the total investment universe that an advisor would have access to. So I'd encourage you to find a CKA in your area, two or three, to interview at MoneyWiseLive.org. We've got to hit a break. Stay on the line. We'll talk a bit more off the air, and we'll be right back. Thanks for tuning in to Money Wise Live! Biblical wisdom for your financial journey. I'm Rob Trest, your host.

Taking your calls and questions today, we have a couple of lines open, 800-525-7000. Hey, let me ask whether you've prayerfully considered supporting Money Wise Media. If you consider yourself a part of our Money Wise community, perhaps you benefit from this program on occasion, or you've taken advantage of one of our coaches, or you've been to the MoneyWiseLive.org website where you can consume our content, or maybe you use the Money Wise app. Well, all of that is made possible by our listeners, those of you who support this ministry on a regular basis. If you'd like to do that, it's quick and easy. You can just head over to MoneyWiseLive.org and click the donate button. Let's head back to the phones.

And Mike is in Wisconsin. How can I help you, sir? Oh, yeah. Say I've got, I'm going to retire in a year and a half. I'll be 57 years old and my wife is going to do the same thing. We have a rental property worth about $130,000, which we're wondering if we should sell that and put it into a retirement account or we're getting $650 a week or a month income on that. So should we keep that and have the steady income there or take the lump sum, sell it and take the lump sum and put it into a retirement account? Yeah. Well, you wouldn't be able to just dump it into a retirement account.

It would be a taxable account that you would certainly be able to invest. Is that what you're thinking? Well, yeah, I guess what I mean, whatever we would have to do. I haven't looked into it too much, but we're just wondering if we should sell it or keep it. Yeah.

No, it's a great question. Here's the way I would walk through this. You'd want to look at what you're generating now on a monthly basis and compare that to what you could reasonably expect to generate safely if you were to invest it. So you said you're pulling in about $650 a month or about $8,000 a year.

If you were to sell this, you'd have the fees, the real estate fees, and then because it's a rental property, you'd have any capital gains on the proceeds or the profit that you make. And then if you were to turn around and invest that, let's say you end up with $115,000 to $120,000, you'd probably end up with somewhere around $400 a month on a really conservative basis where you'd want to generate enough to protect the capital and throw off an income, which would only bring in about $5,000, $5,500 a year. So I think all things being equal, at least currently, I don't see you perhaps bringing in as much as you're bringing in right now if this is invested in a way that doesn't take too much risk and allows you to safely pull off an income. But the tradeoff I think to consider around this decision is not only what you can generate on a monthly basis, but as you head into this next season of life, do you want to be a landlord? And you know, are you comfortable with the upkeep and the involvement that you have to put into maintaining this property? Or would you prefer a more passive investment strategy, which is kind of the non-financial aspect of this decision?

So tell me your thoughts on those two pieces. One is kind of the fact that you'd probably be looking at a little bit less in the form of income on a monthly basis with the investments in order to protect it. And then secondly, the tradeoff with you having to be involved as a landlord and just the work that goes into that. Well, there's really not too much work. We completely redid the house before we rented it out. So there's basically no upkeep. We did all brand new appliances, carpet, windows, doors, everything.

Completely redid it. So there's not much upkeep. And yeah, I guess I don't mind doing that. We're still in pretty good shape. So you're young and you've got the ability to do this and it hasn't been too much for you. Are you relying on that $650 a month as a part of your budget?

Not really. We're going to be getting about $3,000 a month through a pension and then we can get into our annuities at $59.5. So there'll be a little bit of a bridge, but we have about $170,000 in savings and our portfolio is around $750,000.

So we're not exactly hurting, but we'll be comfortable with what we're doing. And are you planning to pull an income off of the $750,000 or is that money just excess that's going to continue to grow? Well, for now it'll just continue to grow because we can get by on our pension and this rental. Well, I think given that new information for me around you having three quarters of a million dollars in investment assets in addition to this property, I'd probably hang on to it.

It's generating a phenomenal return. It's not been a lot of work for you and it diversifies you among a different asset class. So you're not all at the risk of the stock and bond markets. You have real estate in the mix here, which is I think going to give you further diversification and then obviously down the road, if at some point it becomes too much in the way of upkeep, you could sell it. But I think you guys are in obviously a really strong position living well within your means. You've got plenty of income, you've got phenomenal assets that you don't even need to tap at least at this point because you're living modestly. So I'd probably hang on to the property as long as you can continue to earn that income and stay really well diversified. I think the only other thing to look at, Mike, is just do you want to do any giving out of this? And before you sell this property, look at an opportunity to perhaps move a portion of it into a donor advised fund or something like that where you can miss out on any capital gains that you have coming to you and do some additional giving as a part of that, just given that it sounds like you all have more than you need at this point. So just think and pray through that.

But in terms of the decision to sell it or keep the property, I'd probably say based on everything I know, I'd hang on to it. Yeah, that was kind of our thoughts all along. We just figured we'd get another advice, you know, and that's kind of our thoughts also to diversify and do the same thing as just what you said, really. Very good. Well, listen, thanks for checking in with us, Mike.

Tell your wife I agree and best to you guys in the days ahead. Lord bless you. On to Boca Raton, Florida. Quickly. Tony, how can I help you, sir? Hi. Hi, Bob. Hi.

Go right ahead. Yeah, I was just calling as a follow up from a couple of weeks ago, I called asking about an advice for buying with my mom a house that she can rent some part of it and kind of, you know, subsidize some part of it so that she can afford something bigger. And so in that call, you advised me to not go on something that would hurt us on the mortgage payment, something that we couldn't afford, which is what we got approved for, for $417,000.

So we lowered that number, but as I've been looking and researching, I was thinking about the option of refinancing my current home and maybe with that pay some of my debt so I can have more cash flow and help her out to pay her mortgage. I see. Okay, let's do this.

Tony, I want to give you my thoughts on this and I have a couple of follow up questions, but we need to hit a quick break. Our last one of the program today. So let's do that.

You hold the line. We're going to take a short break. When we come back, I'll give you my thoughts and we'll go from there. This is MoneyWise Live, biblical wisdom for your financial decision. Stay with us.

Still more to come just around the corner. We'll be right back. Welcome back to MoneyWise Live.

I'm Rob West, your host. Tony from Boca Raton called in just before the break and was sharing with us his desire to help his mom buy a home. She's currently renting. He'd love for her to take that same amount and put it toward a mortgage payment and he wants to help her do that. Tony, I think the question is whether you and your wife are in a financial position to do that. I appreciate your generous heart and your wanting to help your mom and help her make wise financial decisions.

I don't want you, though, to get overextended in the process. Your current home, you've got about $170,000 in equity. It's worth $370,000. You said you owe about $200,000. You've got two car loans and about $16,000 in credit card debt, which tells me that you've been, for whatever reason, whether it was extenuating circumstances or just living beyond your means, you spent beyond what you had the ability to pay. That's a red flag for me that tells me you need to get your financial house in order. If you were just calling me saying, should I refinance to pull cash out to pay credit cards, I'd say no because in just about every case when you do that, usually you're treating the symptom of the problem and not the problem.

It takes the pressure off. It takes that unsecured debt and now secures it to your home. Then you're going to call me back. Typically, I'm not saying this is the way you're going to do it, but typically that person would call me back in a year and say, yeah, the credit card debt is back because we weren't living on a budget. We were overextended, spending more than we had. Then that's going to be magnified by the fact that you're trying to help mom get into this house and put your name on yet a second home that has a very large mortgage on it.

I guess those are my issues. I realize you said she has about $20,000 to put down on it, plus she could cover the mortgage with what she's currently paying toward rent, which is probably no small amount. How much were you looking to add to her $20,000 to help her get into this or were you just going to put your name on it? I'd buy my name on it and help her with the monthly mortgage payment. By how much were you planning to contribute toward the mortgage payment? Like $200, $400, but if I get to pay the debt sooner that I have, maybe I help more. Like I say, I appreciate what you're trying to do. I genuinely do, and we want to honor our parents.

I think that's very biblical. I just have some concerns here that you're going to get overextended by co-signing on a property you really can't afford and trying to put some money against that on a monthly basis when you've got your credit card debt. I really don't want you to take that $16,000 and add it to your house because of the reasons I mentioned.

We're taking unsecured debt, securing it to your home, and I really have some questions about whether you guys are making progress on that on your own. What I'd love to see you do is just say to mom, listen, let's keep renting for a little while. Let me take care of my financial situation. I'd get you on a credit counseling program. I'd take every bit of that $400 you were going to send to mom and try to go after those credit cards, not roll that into a new mortgage and extend it out for 20 or 30 years.

I would really just focus in on getting that paid off, and then when you're a little financially stronger, then you say to mom, and by the way, a year or two down the road, we may see some housing prices a little better than they are today because the housing market's been red hot. Then you guys look at buying something at that point. I realize that's probably not what you want to hear, but I just think that's more prudent.

Do you follow me? Yeah, I do understand that. Yeah, my wife and I, we have been working for four years to reduce the debt. I mean, we are still continuing, of course, on it. We went from $25,000 that we had in debt on credit cards, and we have gone down below to $60,000, and we had all the debt that we had to pay for some taxes that we had also to pay, some debt taxes that we had to pay.

So we have been consciously trying to reduce every day the debt more and more to get to that point. Well I'm encouraged by that. I really am, but I still think it's premature for you to put your name on a second property. I just don't think you have the financial ability to do that, especially when you're committing to subsidize the payment, which tells me that she can't afford the house either. As much as I love the idea of you helping her, I just don't think you're quite ready.

So I'd wait until you get these credit cards paid off before you consider anything like this. That's just my best advice for you, bud. Don't hesitate to call back at any point, and we'll certainly pray that God gives you some wisdom. Thank you for your call today, Tony. Indianapolis, Indiana. Hi, Linda.

How can I help? I am 65 years old. I have no savings. I'm on Social Security, disability. I owe like $50,000 on my home. I got $15,000 of credit card debt. How can I pay my house off within the five years, or within five years, or what do I need to do to save?

I don't know. Yeah. Well, tell me about this paying the house off in five years. Is that your own goal or is there something that happens with the mortgage in five years?

Yeah, my own goal. I'm 65. My health is not... I had polio when I was little and I'm on Social Security, disability. I do work two days a week and I kind of want to pay my house off within the five years. Like I said, I do got credit card debt of like $15,000, I guess.

Okay. Well, a couple of thoughts. I mean, number one is just make sure you're within the rules of what SSDI allows you to do in terms of work.

There's some pretty strict limits there. If you have what's called substantial gainful activity, that will eliminate your benefit there. So just check into that, first of all, and maybe you already have. But secondly, I wouldn't be as focused on the house right now as I would that credit card debt. If you have margin left over at all, I'd be putting it on that credit card debt of roughly $15,000, I think you said, at this point. Once that's paid off, that's going to take a big load off and give you more that you can use to shore up your savings, which is really another huge priority. I would be... With that excess you have on a monthly basis, the first thing I do is open a savings account separate from your checking and I'd put a little bit in every month until you get to $1500. Then I'd stop there and take every other bit of margin and move it toward the credit card debt and try to get those paid off. I wouldn't touch any extra principal payments on the house until the credit card debt is gone. It just doesn't make sense, given what you're probably paying in interest. Linda, I would also connect with my friends at ChristianCreditCounselors.org. Their number is 800-557-1985, if you'd rather call 800-557-1985. These are Christians that would help you get those interest rates down, get on one monthly payment every month and pay off that debt 80% faster. So that'd be my best advice for you, but if you have other questions along the way, Linda, don't hesitate to give us a call. We're going to finish today in Lakeland, Florida. Hi, Gina, how can I help?

Hi, thank you so much for taking my call. I'm just curious of your opinion on... Right now, we know that we have a seller's market. We don't have a buyer's market. So we have a home that we know would give us a profit of about $220,000 if we sold it. And then our thought is we would have to take that money and reinvest it in a home that is probably not as good of a quality. And we're going to end up with a mortgage, of course, because the high market that we're in. So I just wanted to try to get your opinion on what you're thinking about what might be happening in the housing market and what kind of direction we should go.

Yeah, great question, Gina. So you are talking about your primary residence in both cases. You'd be selling where you currently live and buying your new primary residence. Is that right? That's correct. Okay. And you said you would make a profit of about $200,000?

Yeah, about between $200,000 and $220,000 is the profit that we'd make by selling our home. Yeah, okay. And you've lived there two out of the last five years? I'm sorry?

Have you lived there two out of the last five years? Yes, sir. Okay, great. So you shouldn't have any capital gains on this. So the question then is, why are you selling? You're looking to buy something a little larger or what are you trying to accomplish by selling? Yeah, we would like to downsize. There's two of us living in a four bedroom, four bath house. Okay, you want to downsize?

Okay. And why do you think you would have to spend more than what you would already have spent on this? The homes that we're looking at, we owe right now about $155,000 on the home that we're in. And every home that we look at now is up in the $200,000 range. That's even just a small home, like it's 1600 square feet home is still up in the $240,000 range. So we're thinking we would have to take all of our profit and reinvest it into a home.

Of course, it would be close to be being paid off. But we just don't know if that's a wise decision. We don't know what the market's going to do. Should we wait to see if it's going to come back down as far as the buyers?

Well, no, I don't think so. I mean, as long as you're buying the home that makes sense for you, meaning it fits into your budget. And it sounds like because you're downsizing and you have so much profit, that's not the issue. What's challenging is for folks that don't have a property to sell. So they're currently renting or they're buying their first home. You are coming out of a home in a seller's market. So you're going to maximize the sale on this existing home and then turn around and plow those profits into the next home, which, yes, it's still a seller's market. You'd be paying a premium, but you collected more than you should have, all things being equal on the sale of the property.

And so, you know, I don't have any problem as long as it's a wise move for you. Where is the housing market going? Well, of course, no one knows. But what I would say is we've already seen somewhat of a cooling of the housing market. What led to these incredibly high growth rates in housing was real demand. People moving out of downtown into the suburbs, the millennials becoming ages where they're having kids and wanting a single family home. All that is real demand.

We had low inventory. Some of that, though, is being corrected. And that's why we're seeing a softening in the housing market.

It's not a bubble, though. So I think as long as you're selling the top dollar, go ahead and buy the home that's right for you. I wouldn't delay that if, you know, just based on what's going on in the market right now. Stay on the line. We'll talk a bit more off the air. That's going to do it, though, for us today.

MoneyWiseLive is a partnership between Moody Radio and MoneyWise Media. I want to say thank you to my team today, Jim, Amy, Deb, and Gabby T. And thank you for being here as well. We'll be back tomorrow. Look for you then. God bless you. Bye bye.