Get Control of Your Money

Did you hear the one about the guy whose credit card was stolen?

He didn't report it though because the thief was spending less than he was. Hi, I'm Rob West. If overspending is your problem, it means you're not controlling your money. Your money is controlling you. First up today, I'll tell you how to change that. Then it's on to your calls at 800-525-7000.

You can call that 24-7, 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Well, you're probably wondering why we're talking about controlling your money when we know that God is really in control of our finances. In fact, even our ability to earn money comes from God.

Well, that's certainly true. God created everything and he owns everything. But he's put each of us in charge of just a tiny portion of his holdings. And because of that, he expects us to be faithful stewards of his resources. And to do that, we have to control money and not let it control us.

Fortunately, being the loving and gracious father that he is, God hasn't left us in the dark about this. His Word contains over 2300 verses about money and possessions that will guide us to faithful stewardship if we follow the principles they contain. What a lot of folks don't realize is that by following those principles, we become financially free. If we don't follow them, we become slaves to money.

It controls us. So what are some of the steps you can take to get control of the money God has entrusted to you? Well, over and over, the Bible warns us to avoid debt. Proverbs 22, 7 reads, The rich rules over the poor, and the borrower is the slave of the lender. In Proverbs 21, 20, precious treasure and oil are in a wise man's dwelling, but a foolish man devours it. If you can't avoid debt, not much else is going to work.

So let's focus there. If you have trouble managing your credit and debit cards, meaning your spending is out of control, stop using them. There was a time once when credit cards didn't exist. People used cash. And there's no reason you can't do it today with most of your budget categories. The advantage to using cash is you can't overspend like with a credit card.

That part is just simple math. But there's also a very strong psychological component to using cash. You see, when you have to hand over actual dollars, it's much more difficult to part with them. Studies show that people spend 10 to 30 percent less just by using cash. Real help in controlling impulse spending. That's fine, you say, but what if you already have a big balance on your credit card?

Well, you're certainly not alone. According to Lending Tree, 54 percent of Americans carry a balance on their credit cards with an average balance of over $6,000. Now, there's only one way those credit cards will ever be paid off, and that's to pay more than the minimum monthly payment. When you pay just the minimum on your credit card each month, a lot of that money is going toward interest only, so it will take years to pay off. But that's what credit card companies want you to do, because minimum payments maximize the money they make off you. So pay as much as you can above the minimum each month to get that card paid off quickly.

And if you have more than one credit card, how do you decide how much to pay on each of them? Well, studies show that paying off credit cards is as much psychological as it is financial. If you concentrate on the highest interest card first, that's called the avalanche method, it will take months and months to pay it off. So instead, forget about the interest rate and pay off the smallest balance first.

That's called the snowball method. You'll get a quick psychological boost from paying off a card. That gives you incentive to keep going, and when that's paid off, you can go on to the next highest balance and so on. Of course, it's much easier to stay out of debt in the first place, and that's what a lot of folks think they'll do when they first get a credit card.

Maybe they've been lured by the promise of big rewards. But those reward points will be dwarfed by the interest payments they'll have to make if they don't pay off the entire balance each month. They think that won't happen, but then an unexpected expense comes along, and the easy way out is to use the credit card. The only way to avoid that is by having an emergency fund saved up.

We recommend three to six months living expenses. Then, when an emergency pops up, you can use the emergency fund money to pay for it. So those are some ways you can take control of the money God has entrusted to you.

Remember, following his financial principles isn't a hardship, it leads to freedom, and that's pure gold. By the way, controlling your spending is a lot easier if you use the new MoneyWise app. There's three approaches to managing your money.

You can just track, you can plan and track, or you can use the tried and true digital envelope system. Check it out today when you visit your app store. Just search for MoneyWise Biblical Finance. Your calls are next, 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Welcome back to MoneyWise Live.

I'm Rob West, your host. I'm glad you're along with us today as we tackle biblical wisdom for your financial decisions. What's going on in your life today, financially speaking? We'd love to help you navigate that as we weigh it against the Council of Scripture. By the way, God's Word has a lot to say on this topic, which is why we spend an hour a day here on this radio station talking about biblical money management. If it was on the heart of God and over half the parables that Jesus taught referenced money in some way, more than 2300 verses, it was talked about just about more than any other topic in the Bible, and I believe that's because it's the chief competitor to lordship. You remember in the Bible where it says you cannot serve both God and the other thing that was put against perhaps what we might choose other than the Lord is mammon or money, and it is a reflection of our hearts and so often can derail us from God's best. So we want to get this area of our lives right, and my experience is that when we do that, it has a ripple effect throughout the rest of our life. When we can hold God's money loosely, use it as a tool to accomplish his purposes, live with contentment and surrender, we'll experience a more intimate relationship with the Father.

That's our heart's desire for you, so let's do that together in community. Give us a call today with your questions and comments. 800-525-7000. In just a moment, we'll be talking about 401k plans with John. Fran in Valparaiso wants to talk about gift taxes for an $11,000 gift she received. But first, to Vermont. Katrina, good afternoon.

How can I help? Hi. Thank you for taking my call. I received, let's see here, back up. I opened an account with Verizon for my son's girlfriend because I had the good credit, and about a month later, I received a letter stating I had a bill for $971.25. That I owed, but not a printout bill, just a bill stating that. And I took it as an assumption that it was a scam, so I threw it away. And then I just kept receiving them, and I just kept throwing them away. So at one point, I took it down to the Verizon department down there, and they looked it up online because they knew I didn't have this bill, because I just opened up the account. And they looked it up online, and they said, yes, this is a scam. So I continued to throw it away.

I did receive a call from somebody about it, and I told her, you're a scam, and I hung up. And now I went to apply for a credit card at my bank, and they told me I was unable to get one because of this debt was put on my credit. Let's see, not my credit. It was put in as a debt that I owe. That's not mine. So it dropped my credit score like 100 points.

Sure. Well, there's a very common scam that goes on these days where you'll get a bill that claims you owe money that you don't actually owe, and generally it's a phishing scam. And by phishing with a Ph, what we mean is they're trying to get you to click a link and input your sensitive information that they're going to then use to steal your identity or commit fraud with other financial institutions or spend money in your name trying to log into your accounts, things like that. That typically, though, would not show up on a credit report, so that's the unusual part here because it's not a bill at all, and therefore they have no way to report it to the bureau. If in fact this is a bogus transaction, which is what you verified with Verizon, then I would deal with this directly with the credit bureaus. So I would first, Katrina, pull a copy of all three of your credit reports with Experian, TransUnion, and Equifax. You can do that for free at annualcreditreport.com. That's the website you'll want to go to, annualcreditreport.com. If you find the entry related to this bogus nonpayment item, then you'll want to use the dispute feature on the web to challenge the item.

And according to the Fair Debt Collection Practices Act, the credit bureau will have to contact the creditor, and they'll have 30 days to verify that the transaction or the debt is in fact legitimate and owed. When they can't, it would be dropped from your report, and when that's done, it would immediately increase your score. If they come back and say, no, it is legitimate, and they can prove that, well then you've got a bit more work to do to figure out what is the source of this information that's being reported.

Was it in error? Perhaps Verizon has mixed up an account and it's being reported to your report because somehow they think it's yours, but it's really not. I mean, you'd have to get to the bottom of that. But one easy way for this to go away would be simply to have the credit bureaus do the hard work of verifying that it is not in fact accurate. And again, there's already procedures in place, and the law requires that if they can't verify it, it has to be removed. So tell me your thoughts on that.

Yeah, that sounds really good to me because I didn't know where to start in the first place. I've had my identity stolen before, and it is a lot, a lot of work to fix that. So I understand that part, and it's a real pain in the hoo-hoo.

Well, here's the thing. So I think your next move is annualcreditreport.com. Pull those reports, identify which of the three, if any, or all have that bogus entry, and then use the dispute feature. It's very clear how to do that. And then if you have a problem beyond that, give us a call back. I would also, while you're there, given that you've been the victim of identity theft in the past, I'd freeze your credit reports with each of the three bureaus. That's going to place a PIN number in place. There's no cost for this.

And that PIN number will require that any time you, or more importantly, someone who fraudulently tries to open a new account in your name, when they try to contact the bureau to check your credit for the purposes of opening that account because they're impersonating you, they won't be able to do it because they won't have the PIN number, and that may stop them in their tracks. So I think that'd be a good option for you. Katrina, all the best to you. I know this is frustrating, but keep us posted.

To Valparaiso, Indiana. Hi Fran, how can I help you? Hi Rob, how are you? Thank you for taking my call.

Sure. And I'm calling about a gift that is substantially more than $11,000 from a relative of mine that did not want us to have to wait. Until, you know, something happened to him to receive an inheritance. And I'm very thankful and grateful to him. But now he also said he would like to pay the gift tax. So I tried to look it up and found out that sometimes the person who is giving the money is required to pay the gift tax. I don't know if that's true.

Well, let me weigh in on this. I know it's a blessing to receive this, and that's a great thing. What you need to know, first of all, is that any time you're dealing with these issues, if you have questions that are tax related, always good when something out of the ordinary happens, meaning it's not just a routine year tax wise, always good to check with a professional to make sure that you're doing things properly, you're filing correctly, you're paying all the taxes that are owed. That's always a good idea.

This would qualify for that. So I'd run this by a CPA. But let me just tell you, generally, as the recipient, you won't owe any tax. It would be the person making the gift, and the IRS allows folks to give away up to $15,000 a year without incurring any allocation toward the lifetime gift exclusion. So if it's under $15,000, that would qualify under the annual gift exclusion. If it's over $15,000, that would go against the lifetime gift exclusion, which today is $11.7 million before you owe gift taxes.

Now, that could change, of course, and so that's just the way it is today. But as the recipient, you really don't have anything to worry about there because that would fall on the giver's side. But again, if you have questions about an unusual situation going on in your financial life tax-wise, or there's something kind of an anomaly that is happening one time, especially when there's a large sum involved, never a bad idea to run this by a professional just to make sure you're doing everything correctly. But I'm sure this will be a real blessing to you, Fran, and thanks for checking in with us today. Well, folks, you're listening to MoneyWise Live, biblical wisdom for your financial decisions. We've got lines open, 800-525-7000. Give us a call. Welcome back to MoneyWise Live. We're so glad you're along with us today. We've got some lines open for your calls and questions, 800-525-7000.

Let's go right back to the phones. John is in Chattanooga, Tennessee. Hi, John, how can I help you?

Oh, thank you. I'm not a conspiracy theorist, but all the trillions of dollars that our government owns, I'm afraid one of these days they're going to look at all these 401K plans and 403Bs, and they're going to say, you know, we can manage that money better than they can, and they're going to take it. And so short of taking all that money out and sticking it in my mattress, what can I do to keep the government from taking it, and what do you think about buying gold?

Yeah, John, I appreciate that. You know, I'm not concerned about what you're describing, frankly. You know, the government, without changing the laws, and in this case it would take an act of Congress for the U.S. government to be able to seize your retirement funds, which means it needs to go through Congress, the President, and the Supreme Court, which, by the way, the Supreme Court would probably be the biggest challenge of them all, in order to change the laws of the land, which currently protect you from having anything taken away. What's called ERISA, the Employee Retirement Income Security Act of 1974, governs these types of plans, and no one can seize this without any kind of levy against you from the IRS or a legal judgment. So the U.S. government really has no legal standing to take the contents of a private retirement account.

So, you know, you taking this out would not only generate a whole bunch of taxes, but depending on your age, could generate penalties, and then what? You know, you've paid the tax on it probably all at once, or even if you spread it out over years, you're probably increasing your effective tax rate on a portion of this, and then, you know, now it's not growing tax deferred, and, you know, I think at this point I would just say that this is the very best option for you to save for the long term, and I believe a properly diversified stock and bond portfolio is the very best place for you to be. I mean, we still have the strongest economy in the world, we have our challenges, but, you know, try to find a better reserve currency than the U.S. dollar, even given the challenges we have here in the United States.

You won't find it, which is why, you know, even in the credit crisis of 2008, we saw the dollar rally, even when there was real systemic problems in our financial system. So, you know, at the end of the day, you need to be, as a steward of God's resources, found faithful with what passes through your hands, you know, certain things are out of your control, like the economy and the tax code, and now we can vote for elected officials that we believe will uphold the right principles that I think we should derive from God's word, starting with the fact that he created mankind to be productive, to take his creation and improve it, which, you know, I think ultimately allows us to create a virtuous cycle that leads to prosperity, but more importantly than that, generosity to share with others. But at the end of the day, I think the very best place for your long-term money, despite some of these challenges you may think may be coming, is still, you know, in a tax-deferred retirement plan like a 401k here in the United States with a properly diversified portfolio.

And as to gold, although it's a hedge against, you know, a falling dollar and it's a fear trade when things are awry, gold does tend to rise, the volatility and long-term performance just isn't in its favor versus a stock and bond portfolio, and for that reason, I wouldn't allocate more than 5%. So, you know, it may not be what you're looking for, John, but it's just the way I feel about your best course of action to preserve your purchasing power because of inflation and to grow this money in a way that's prudent and sound and give you the very best possibility for growth without added volatility. But give me your thoughts. Thank you very much. I really appreciate your insight. All right. God bless you, John. Thanks for calling. To Florida JP, how can I help you? Hi.

Thank you for taking my call. I'm about to make a financial decision, and I want to know your thought about it. I'm trying to invest in solar, and my wolf is about 25 years old, and I was told it would be wise to redo the wolf at the same time I installed the system. They would finance it at $100,000 at 1.9% for 25 years, I believe. Currently, my electricity bill is $275,000, and I would be paying $377,000 a month.

Okay. So, what are your thoughts on it? Yeah, you know, I think the key is really whether this solar is going to, in fact, pay for itself over the long haul. And, you know, depending upon what tax incentives are available and then just the savings against your, you know, current electric bill, you know, typically the average time for these to pay back is six to ten years.

The problem is most folks don't stay in their home more than seven years on average. So, a lot of times it's a big upfront expense, and you've got to wait a long time to realize that savings. So, I'd do a bit more research, get some other second opinions, and make sure that it actually makes sense for you, JP. We appreciate your call today. This is MoneyWise Live. We're delighted to have you along with us today on MoneyWise Live. Hey, we'd love for you to visit the MoneyWise Live website. You'll find it at MoneyWiseLive.org. When you're there, create a free account to post to our community where you can get questions answered from our MoneyWise coaches, to be signed up for our weekly wisdom email that goes out tomorrow with my latest thoughts, our trending articles and podcasts, some great information each week in the MoneyWise Weekly Wisdom. And that registered account will allow you to access the MoneyWise app, which you can download from your app store.

Just search for MoneyWise Biblical Finance. It offers, I believe, the very best money management system out there in an app, where you and your spouse, if you're married, can have access to all of your transactions organized by budget category or envelope. We've got three different systems in one, so you can pick the one that best fits your personality. Are you more directional or detailed?

Do you want to be hands-on or hands-off? We've got the right system for you. The key is it allows you to be a faithful and effective steward of God's resources, so that your money goes where you want it to, so you can ultimately have margin to give more and to save.

I think that's the key. We've got to live within our means to do that, and we want to help you do just that. The MoneyWise app will help you. It's in your app store.

Again, just search for MoneyWise Biblical Finance and then create your free account today. All right, let's head back to the phones. By the way, we have some lines open.

800-525-7000 to Tulsa, Oklahoma. Hi, Tony. How can I help you, sir? Yes, sir.

How are you? Great. Okay, so what I've got going on is I've taken your advice. I've gotten a hold of all the credit cards I had that actually had an annual fee to possess, and I got a hold of one of them, which the annual fee was $149. The gentleman I was talking to claimed that if I canceled, I was within a time limit that I would get that money back. So I talked to my wife about it. We said, you know what, let's just go ahead and cancel it. I called them, and next thing you know, they've offered me a credit on my account for $150, which is, of course, a dollar more than what they took out. And also now I have the ability to have free early bird check-in, which is normally $10 per person, and some other perks.

She rattled them off real quickly. Anyway, what this ends up being, it's a miles card, so for every dollar I spend, I was able to get like a half a mile or whatever. So we're pretty much right now able to take that for all three of us in my family to pretty much fly anywhere they fly to for free because of the amount of miles we have built up. So I don't know if deleting this card would be a wise thing if it's going to hurt my credit, or do I just play with them with this credit that they've given me? I don't know.

What do you recommend? Yeah, Tony, I appreciate that question. So a couple of things.

Let's back up. Let's talk about credit cards for a second. You know, there's folks out there that would say you should never have a credit card.

They're just too dangerous. My friend Dave Ramsey would certainly advocate for that. I don't take that position. I would say if you can manage it, which means you're living within your means on a spending plan, you're only using the credit card for budgeted items and you're paying it off in full every month, then there's no reason not to, especially if you can get benefits from it, whether it's in the form of rewards by travel incentives or cash, which would be my preference. So you get that money going back into your budget. Essentially, you could get 2% of everything you spend credited back to you, which I think is the very best option. But, you know, again, if we're comfortable using a credit card and you've demonstrated you're not going to run up debt and spend money that you don't have, then I think it's okay.

So then what's the right card for you? And I think that's going to come down to, again, what incentives are you looking for? I wouldn't ever pay an annual fee.

I just don't think there's any reason to. And the question is, would you rather have the travel rewards or, you know, the cash back? I just recently switched to a new card that was offering 2% cash back on every transaction. Most of them it's, you know, 1% on most and maybe 3% on certain ones and 2% on others. This is 2% across the board.

It's the best one I've seen. And you can look at the various credit cards, who has the best incentives right now at nerdwallet.com or creditcards.com. But if you want to stay with the travel rewards for the reasons you described, Tony, I'm fine with that. You know, this is a creative way that they've gone about making sure you're comfortable not having that fee this year, but they're preserving the right to charge you that annual fee down the road. And I suspect if you overlook it, you know, 12 months from now or whenever that charge hit, 12 months later, it'll hit again.

And unless you ask for it, you're probably not going to get that voucher. So if you want to kind of be out from under that, I'd look at a card to replace it that has no annual fee and, you know, has the very best benefits that you're looking for. I wouldn't be very concerned about any impact on your credit score. You could see a slight decline because either it's an old card that's now deleted or it's reducing your credit limit and therefore your utilization is higher. You know, there's any number of reasons you could take a dip. But as long as you're managing your credit wisely, you're an on-time payer, your balances are low, therefore credit utilization is low, you're going to have all the credit score you need to qualify for the top tier loans if you need to refinance your house or buy a car or something like that.

So give me your thoughts on what I've shared though. So what kind of hit do you think my credit will hit if I do close it? You know, I could see somewhere between 20 to 50 points. But again, it would be temporary and unless you're out there shopping for a house or a car, it's probably not going to be a big deal. I mean, if you wanted to replace this card with another card that you found with no annual fee that had as good or better rewards on it, well, go ahead and do that first and then close this account. And does it really matter if your, you know, credit score takes a slight decline for 60 days? As long as you're not out looking for credit and that happened to drop you into a lower tier, there's really no implications. Okay, very good. Thank you. You helped us out a lot because we both, my wife and I, we're both in agreement and we're like, yeah, and the next thing you know, they threw us the hard loans. Well, I think getting out from under this in a way that alleviates you having to do this again next year because they're going to hit you with that same charge is probably one of the benefits so you don't have to think about it anymore.

NerdWallet.com or CreditCards.com would be two sites to evaluate the best credit cards out there. We appreciate your call. Quickly to Minnesota. Hi, John. How can I assist you? Yes, hi.

This is John. Appreciate you taking my call. So I'm 63 years old. I took an early retirement due to COVID.

They offered me a package in 2020. I've been working part time since then and I'm thinking about starting Social Security next year early and do some part time work or 1099 work. And I'm wondering if you can give some input on how it works with the penalties regards to net income, gross income and what options are.

Yeah, very good. You know, in terms of you being able to work if you take Social Security early, your Social Security benefits will be reduced by a dollar for every $2 you earn above the threshold of $18,960. So you earn more than $18,960. They drop a dollar from your benefits for every $2 you earn above that. But here's the key.

After you reach full retirement age, not only can you earn as much as you want, the money that was withheld prior to full retirement age will be paid back to you gradually through a higher monthly check. So eventually you will be made whole even though you'll have that temporary decline. John, I hope that helps you, my friend. We appreciate your call today. We've got some lines open for your call. 800-525-7000.

Give us a call. This is MoneyWise Live. So we can continue to bring you this broadcast and our MoneyWise coaches and our MoneyWise app and all the things that we do at MoneyWise Media. It's quick and easy to give online at MoneyWiseLive.org. Just click the donate button and for a gift of $25 or more between now and the end of the year, we'll send you Paul David Tripp's great book, Redeeming Money, as our gift to you.

Again, MoneyWiseLive.org. Just click the donate button and we would certainly be grateful. Hey, I'm going to stay after for a few minutes today and take a few extra calls.

So if you have a question on your mind or your heart and you'd like to know my thoughts, I'd be happy to give them to you. Here's the number to call. 800-525-7000.

We've got room for your call right now. 800-525-7000. Paula is in Minnesota. Hi, Paula. How can I help you? Hi.

Yes, I have a question. It's regarding the CARES Act. Our church is in a large building campaign and we would like to donate a larger amount. My husband's idea is that we would pull it out of our 401 to donate to this nonprofit, again, under the CARES Act. And we understand that there would be no taxes due on this amount. So we're wondering, is that correct?

Is there anything else we should be aware of? And I did contact our tax gal and she just suggested that we would do it as a direct transfer so that we don't see any of the money. Yeah.

Did you say you talked to your tax preparer about this? Yeah. Okay. And this is in a 401k or has it been rolled to an IRA? No, it's in a 401k. Okay. And your tax preparer believes you can do a direct transfer from your 401k to the ministry? That's all the information she gave me. Yes, but we should transfer it so it doesn't look like it came to us.

But a direct transfer out. And what is your age? I'm 56.

My husband is 61. Okay. And this is your husband's 401k or yours? Yes, my husband's. Okay. And is he still working for that employer? Yes.

Okay. Well, you're probably not going to be able to do a direct transfer over to this ministry unless there's something I'm not aware of. What would typically happen is once he separates from that employer, you'd roll it out to an IRA. And then once you reach the age where you would need to take a required minimum distribution at age 72, you could do a qualified charitable distribution direct to the ministry. But as far as I'm concerned, this is going to have to be a taxable withdrawal, which I'm not a huge fan of just because not only is he going to have a big tax bill, now this money is not available to continue to grow. Now, with that said, I love the idea of you all giving a large gift to your church.

I would just ask, is this the right place to pull it? At the end of the day, if the Lord directs you to give this money to your church, I'd say go for it. And the tax implications would be secondary as long as you know what they are and you're ready to pay them, you set that money aside. Again, if the Lord is leading you to do this, I would never stand in the way of that. But if you ask me, is this the very best place to pull our money, I would say, I don't really see a way you can do a direct transfer out of a 401k.

So I'd investigate that a lot further. And number two, given that even though there's not a penalty, because he's over 59 and a half, if the employer will allow it, at the very least it will all be taxable, which means it'll be added to your taxable income and could actually push you up into a higher tax bracket for that portion. So I would go slow on this and perhaps look at other ways, other assets that you could give to follow the Lord's leading, but perhaps prior to you looking at the 401k if there are other options.

Does that make sense, Paula? Yes, I was just curious too about the CARES Act that I guess expires December 31 of 2021. I thought that I don't understand much about it, but that it was allowing you to donate without paying taxes. Yeah, well, you could take a withdrawal under the CARES Act of up to $100,000 and then you could be able to put it back in. And my understanding, if I remember that law correctly, it's been a while since I've looked at that. It would have to be for coronavirus related expenses, meaning you lost a job or something that was related to a hardship that was created by the coronavirus. And at that point, you had the ability to take the $100,000 and miss the 10% penalty. But that's not what we're talking about here on either front, because A, this is not a coronavirus related hardship, and B, there is no 10% penalty because he's over 59 and a half, again, assuming his employer would allow him to take this distribution. So I think the CARES Act really doesn't apply here. And again, I don't see a way you can do a direct transfer to the ministry.

So I think really the only option available is just a taxable distribution, which I'm not a big fan of. Okay, thank you. Okay, Paula, thank you for calling. God bless you. Let's head to Florida. Hi, Steve, how can I help you?

Hey, Rob, thanks for taking my call. I'm retired living on Social Security and I rent a room out of my house to make ends meet. Am I required to report that income, that rental income to the IRS every year?

You are, yeah. You have to report rental income on your taxes using Schedule E. You'll be able to take certain deductions against that income. And not only is the rent taxable, but if you got a security deposit or a last month's rent, those are considered income by the IRS in the year that you receive them. So as I said to a previous caller, anytime you have a change in your financial life that is going to result in tax implications, I'd usually run my situation by a tax preparer or accountant. If you don't normally do that, perhaps you do it yourself.

This is the year to get professional advice. But generally speaking, yes, you do have to report that income. Does that make sense? Yeah, it kind of scares me because they might go back and find out I've been renting it out for a couple years, you know, and I just didn't think it really mattered, you know. Now I don't want to get in trouble, you know.

Yeah, exactly right. And so that's why I think you certainly want to report all of it and this would be a great time to do it. So, Steve, we appreciate you listening. Thanks for your call, my friend.

To Minnesota. Hi, Sandy, how can I help you? Thanks for taking my call. I am 68. My husband is 72. He's either got some mental health issues or dementia or paranoia, but he has a 401 with $248,000 in and he says he's going to take it all out and give it away. Yeah. And I believe him. He's been threatening this for a while.

Yeah. Well, you know, a 401k is an individual account, Sandy, and not joint. So your husband has full control over the money. The only way to change that would be to have him declared incompetent by the courts and there's a number of steps to that. You have to apply for guardianship at the probate court. You would want to consult an attorney familiar with this kind of thing.

They would do a psychological exam and submit the evaluation to the court and then, you know, there'd be a competency hearing. So bottom line is you'd have to involve, you know, somebody from a legal standpoint to help you navigate this. I realize it's a very difficult situation. I'm so sorry to hear that you're dealing with this, but at the end of the day, until he's otherwise declared incompetent, he has full control of the money and can do with it as he wishes. So that would be your next step if you believe that he's going to harm himself financially as a result of this. And again, make this a matter of prayer.

Ask the Lord to give you some wisdom and then proceed accordingly. And Sandy, we appreciate your call today. I believe we have time for one more call.

David is in Illinois. You'll be our final caller today. Sir, how can I help you? Yeah.

Hi, Rob. I'm just calling about we just purchased a home and we're closing this right here. And I just wanted to ask you, they're asking if we should pay down. We're getting the rate of two point seven and for us to pay it down to get it two point two. I have a good credit score.

Why wouldn't I be able to get it at two point two? Why would they want me to pay an amount of money? The home is two hundred and seventy thousand dollars. Well, the reason is that the prevailing rates right now are at that two point seven number. So the only way you're going to get it down to the two point two is to, in fact, essentially you're prepaying some of the interest in an exchange for that. They are giving you a lower interest rate. So I think the question is, do you want to do that, you know, prepay this interest? And I would just say simply, you know, that that typically for most folks in terms of how long they stay in homes does not make sense to buy that rate down because you've got to stay in it long enough to recoup the prepaid interest. If you're going to be there and ride it out the full length of time and you've got the cash available, then it can make some sense. So I think you just need to look at that, look at the total interest paid and the lifetime savings that you would incur if you were to, again, stay in the home until it's paid off in full and make your decision there. But they're not taking anything away from you. It's just that the prevailing rates aren't at two point two today.

They're up around three, which is why the only way you can get that rate is to actually prepay some of the interest. So all the best to you on this new home purchase, David. Exciting times. And we appreciate you checking in with us, my friend.

God bless you. Well, folks, that's going to do it for us today. We've covered a lot of ground and we've talked about saving for investments, retirement, credit cards, credit scores. Here's the thing. You know, there's only so many things we can do with money. We can live on it. We can give it away. We can save it. We can pay our taxes. We can pay down our debt. The Bible speaks to all of it.

So we should be in God's word because we want to know his heart as it relates to managing his money. Hey, let me say thank you to my team. I want to say thank you to Hans, who is manning our phones today. Deb Solomon, our producer. Amy Rios, the engineer.

Jim Henry on research today. Couldn't do it without any of them. And thank you for being here as well. Come back and join us tomorrow, will you? I'll be here. God bless you.