COVID Debt Update

It should come as no use. Well, it's on to your calls at 800-525-7000. That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial journey. Well, Neely Simon is the director of strategic partnerships at Christian Credit Counselors. And if you've been struggling with credit card or other debt, you really want to hear what she has to say. Neely, great to have you back on the program.

Thank you very much for having me. Neely, we have new listeners every day who may not be familiar with Christian Credit Counselors. So why don't we begin today with who is Christian Credit Counselors and what you do?

Sure. So Christian Credit Counselors is a nonprofit 501c3 credit counseling agency that was established in 1990. So we've been helping people now for 31 years. We've also helped over 300,000 Americans with our debt management program that helps people get out of debt and really begin to enjoy the benefits of financial freedom. The program can help you, too, get out of debt about 80% faster while honoring your debt in full. So if you're experiencing the stress and strain that debt brings from either making payments with no progress, falling behind, or you want to avoid bankruptcy, debt settlement scams or quick fixes that ruin your credit, we can certainly help you.

Well, let me just add. I think this is the preferred approach for getting out of debt. Debt management is the way to do it the quickest with the least amount of money going toward interest. We certainly talk about the debt snowball, and you can do it on your own, but I think you're going to have far more success. So you need to check out christiancreditcounselors.org. Nealey, we mentioned the bankrate.com survey at the top of the program, and we know a lot of people are struggling with debt as a result of COVID.

What are you seeing on the front lines? Yeah, so we know that about 53% of American households have experienced an income loss since March of 2020 due to being either laid off or having their wage or salary reduced, working fewer hours, or even having unpaid time off or quitting their job. So what we're finding is that they're really struggling to pay down their credit card debt and would maybe really benefit from looking and exploring other options.

Yeah, no doubt. Some Americans are going back to work, but many still are not able to deal with the debt they've incurred during this time. So Nealey, talk directly to those folks. What advice do you have for them today?

Yeah, so I think it really depends on where you're at. Some people just need some temporary relief, and if that's the case, you may want to call up the creditors directly and see if they can't work out some type of internal hardship program for you. The programs with the creditors are usually just a short period of time, either three, six to 12 months, but it does provide temporary relief. Some other people are really looking at refinancing their homes. If they're in a position where they do have good credit and they can lower their payment, getting more disposable income through a lower interest rate, that may be a good solution. But for those who aren't in a situation where they can refinance their home or have assets like that, you really might want to consider a debt management program, because debt management really provides you a long-term solution to getting out of debt and doing it the right way.

And having somebody walking alongside you in the process, which is invaluable. Nealy, talk about how a program like Debt Management at Christian Credit Counselors can actually help people get out of debt much faster than doing it on their own. What are the key aspects of that?

Sure. So we can lower your credit card interest rates anywhere from 2% to 12%. They're going to vary per creditor. So these are pre-negotiated terms and conditions that we already have in place with the creditors. In addition, we also snowball the debt. So on the program, your payment will remain the same. So once an account gets paid off, we apply that payment to another account within the program to really expedite the payoff.

Very good. Well, we've already covered a lot of ground, but a lot more to come. What about misinformation in this area of debt repayment, and how is debt management different than debt consolidation? That and much more with Nealy Simon, Director of Strategic Partnerships at Christian Credit Counselors.

Then it's on to your calls and questions at 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Stay with us.

We'll be right back. Welcome back to MoneyWise Live. I'm Rob West, your host. Joining me today, Nealy Simon of Christian Credit Counselors, an underwriter of this program and our good friends. In fact, debt management from Christian Credit Counselors is our preferred way to get out of debt once and for all, and Nealy, let's talk about that for a moment.

Who actually is a good candidate for your program? Yeah, so for people out there who are listening that are struggling with credit card debt, and it's really creating some stress and strain, whether you're making payments and no progress, or you've had a loss of income, or just a lifestyle change, maybe you've had to retire early or have medical bills, it's really important that you seek out a company that you can trust and can give you some solid information. Christian Credit Counselors can provide you a free consultation in terms of getting out of debt about 80% faster and really help walk alongside you to provide solutions. Yeah, and I love the fact that you're going to have a believer there on the other end of the phone who's praying with you, who's encouraging you, who's helping you set up a spending plan in addition to getting you started on debt management.

Perhaps it would be helpful for folks to hear an example of a client that you've worked with. Let's say a client has a total debt of, I'm picking a number here, $43,000. How much would they save in a typical example with Christian Credit Counselors? Sure, so by lowering the payments and interest rates and then snowballing the debt, a person that has about $43,000 worth of credit card debt, we can get them out of debt in about four years, six months, saving them $292 a month on the payment and then about $463 a month in interest charges. That's incredible. So when you talk about a monthly savings on the payment, are you saying that the payment actually will decline from what they're currently paying?

That's correct, yes. So we're lowering the payments and the interest rates, which enables us to create more disposable income for people and the other option that they could have on the program too is that you can always make additional payments. The program does offer a lot of flexibility in terms of paying it off faster. If you are in that situation, there are no prepayment penalties and then once you pay off the debt, the program completes.

That's incredible because you actually have this lower payment, as you said, creating more margin, but you're paying it off a lot faster with a lot less interest being paid over the life of the repayment. Let's take this example and now talk about a story of a real person who's experienced your program. I know you have tons of them, but pick one and share that with us. Sure. So recently I had a couple call me. They were in their mid-60s. Both of them were working. The husband was more of the provider though in making about double what his wife was making and unfortunately he experienced some health issues where he had a couple surgeries and it made him unable to work. So what happened is he ended up having to retire early, start drawing on social security. So they had a dramatic reduction in income and the wife is the one who really managed the finances and when she called me up, she was very distraught and stressed and strained and really unsure of how to get out from underneath this. So I was able to offer her the debt management program, creating more disposable income and really encouraging her through our conversation and that we could get her out of debt in about three to five years and really create the opportunity for them to now have some light at the end of the tunnel and some breathing room in a very stressful situation.

I love that. You know, a couple of things occur to me from that story, Neely. Number one is just the ministry that you're having as you're encountering people in a really difficult spot or season in their lives. But secondly, the fact that, you know, this is not a quick fix overnight, but that's a good thing because as they do the hard work, even though they're going to have less money going out the door every month and they're going to save a ton, I think that ultimately results in meaningful life change that will ensure that they don't ever repeat this in the future.

Talk about those pieces of this. Sure. So for people out there who are struggling and reach out to us, we recognize that that's not an easy conversation. For some people, this may be the first time that they've ever experienced this, right? So it's very humbling. So it's important when people are reaching out that you really, you meet them where they're at and that you listen to them and you encourage them and provide solutions. Even if our program isn't a good fit, we can certainly, we want to give people an action plan so that they're motivated to take the next step. So whether it's through our program or through our partners or through the resources we have, we want there to be value in every conversation that we have.

Yeah, that's excellent. Nealey, I want to talk about debt consolidation and debt settlement for a moment because that's often what people reference when they call into this program. And yet those are very different than debt management. Talk about the difference and why debt management is so much better.

Yeah, so it's interesting. A lot of people who call us aren't really sure what we do and there's a lot of confusion out there between debt management and debt settlement. And it's almost by design, I think in some ways, is to confuse the consumer, move very quickly, make it sound too good to be true. And I'm referring to debt settlement and where people engage in that because they're in a vulnerable situation, they're seeking out solutions and it sounds so good, but not really understanding the consequences. So what I want listeners to know is that debt settlement really, it destroys your credit. There's no guarantees, could result on a lien in your home. There's tax consequences.

You get a 1099 C at the end of the tax year, whatever's written off as taxable income, and it's not biblical. You're not honoring your debt. You stop paying your creditors and you fall so far behind so that they can start negotiating one creditor at a time for a lesser balance. But the reality is that creditors do seek legal action after about a year of nonpayment. So many people are not paying off their debt and then they end up in court and liens on their home and it just turns into an absolute nightmare. And in that process, people were not really aware of what they were signing up for.

And then they're calling us when it's almost too late. So I just encourage you, do your research, do your homework, recognize that debt settlement is not a good option. We believe debt management is a solid solution to helping people get out of debt long term and doing it the right way. And debt consolidation, Nealey, is not a good option either because you and I have both seen it. We come in with the new loan, wipe out the credit card debt, but we haven't changed the underlying factors. And so the credit card debt is back six months or a year later, right?

Right. So a lot of times people do use getting a personal loan or a consolidation loan as a solution to getting out of debt because sometimes it's going to lower their interest rates. But what we often see with clients that are calling us is that they also have credit card debt and then they also have a consolidation loan because what they did is they paid off all their credit cards, opened up those lines of credit and then started using them again.

So moving debt around, not so much a good long term solution. Yes, that's exactly right. Nealey, how can folks get more information? You can reach out to us at 800-557-1985 or inquire on our website at www.Christiancreditcounselors.org.

Very good. Nealey, thanks for joining us today. Thank you so much. That was Nealey Simon with Christian Credit Counselors. That web address again, christiancreditcounselors.org. Your calls are next, 800-525-7000. This is Money Wise Live, biblical wisdom for your financial journey.

Stay with us. Delighted to have you with us today on Money Wise Live, biblical wisdom for your financial decisions. I'm Rob West, your host, and the lines are filling up.

I see a couple remaining, two in fact. 800-525-7000, we'll begin to take your calls here in just a moment. Hey, more than 18,000 of you have downloaded the Money Wise app, created an account. You're using it to consume incredible content related to biblical finance. You're posting to the community and our coaches are responding, but literally thousands and thousands are using it to manage their spending and track their spending on a monthly basis using one of three systems that fits your personality type.

So if you're married, you and your spouse can be on the same page, stay right on top of God's money as it relates to how you're allocating it each month. The very best way to use the app is by being a pro subscriber. Well, there's a great offer right now discounted for a limited time for you to become a pro subscriber of the Money Wise app, which means you can connect to all your bank accounts and investment accounts and your donor advised funds, all your transactions get downloaded automatically and categorized, custom envelopes, a whole host of features, and now is the time to do it.

So to check out this special offer to become a pro subscriber for the Money Wise app, just go to moneywise.org slash pro and you can learn more about it. All right, we're going to dive into your questions and comments today. We're going to be all over the country, including I see Oahu on the board today.

We're not going there quite yet, though. Post Falls, Idaho. Hi, Al. How can I help you, sir? Great.

Thanks for taking the call. We're in retirement right now. My wife and I, we have a budget that's just a little bit under the water. We have a house paid off about a million dollars. We love where we're at. We're on five acres in the country. Pardon me, pardon me if my voice starts breaking when I use it. So our question is, do we stay as long as possible because we love it here and hope for the best?

Or do we sell now and invest by downsizing and where would we put the money so that we could live off it and still have something for our trust when we're gone? Yes, sir. Well, great questions. And Al, it sounds like a wonderful place that you live. I know Post Falls is a suburb of Coeur d'Alene. Is that right?

Yes. We don't like to look at it that way, but that's what it is. Well, it's probably a whole different feel where you are out in the country. And I know you've had incredible increases in your property values out there. I know Idaho actually led the nation with over 14 percent statewide increases last year. And in your area, home prices are up as much as 30 percent year over year. So incredible rises, which means from a financial standpoint, you would do well to go ahead and sell now, get top dollar going out. The question is, where are you going and are you going to pay top dollar just down the street for something a bit smaller or are you going to move out of the area? What are you thinking? Well, we're just playing with the idea of downsizing.

And just as ballpark figures, if we had a million, we would spend $400 to buy another house, $100 to pay off all the costs and invest $500. I see. Yeah.

That makes a lot of sense. Go ahead. Our financial advisor kind of, which is Pinkerton, is kind of encouraged that or look, you know, but we've just got all these questions. Yeah. Well, from a financial standpoint, that makes some sense because, again, we're sitting at, you know, arguably inflated housing prices. We've had a great run in particular, the part of the country and even the area that you're in has, you know, is right at the top end of that growth curve and, you know, could it keep going?

Sure. But this, you know, arguably is a great time to sell. The other benefit is you, you know, simplify a bit. You have less upkeep, you have less expense, you know, property taxes and maintenance and overhead when you downsize.

So that makes some sense as well. Plus there's just the stress and strain of moving that, you know, when you've been somewhere a long time, you know, that gets harder and harder as we age. Just to think about the, you know, taking something on like that, that's going to take quite a bit of energy. Now, the non-financial side is you're enjoying this. I hear in your voice, you and your wife love this property and you really want to be there. And so I think the question is kind of balancing those two to say, is this the right time from a financial standpoint? Maybe is this the right time for us in terms of when we're ready to part with this property that we love, that is paid for, but perhaps a bit more than we need in terms of upkeep, size and expense.

And you know, when is the right time to go ahead and make that decision to move on? I can tell you from a financial standpoint, it makes a lot of sense to me. And to your question, you know, if you put $400,000 into a new property at $100,000 to fix it up and, you know, do some other things to it, and you had about a half a million to invest because you'd have up to $500,000 in gains that you wouldn't pay any capital gains tax on, you know, I think if you turn that over to your investment advisor to manage that on a pretty conservative basis, you know, you should be able to maintain that principle and pull out, you know, $20,000 a year, which I suspect after reducing your overhead would probably make up that shortfall and then some that you're experiencing. And you guys could just enjoy, you know, this next season of life knowing that your budget balances, you're covering your expenses, you may even, you know, be able to reinvest a little bit each month, unless you're traveling or doing something special, and you'd have plenty to give away to ministry and pass on to your heirs, you know, when the Lord calls you home.

So I think this all makes sense from a financial standpoint, I think the question you and your wife have to talk and pray about is, what is the right timing, you know, related to us being willing to let go of this and kind of move to this next chapter? Does all that make sense though? Very good.

Yes, it does. It's kind of confirming some of the stuff we've already done. One little concern is if we stay, I know this is asking a real strong one, but if the market tanks, it goes sometimes so fast, we experienced it in the last downturn, it goes sometimes very fast. And then what do you do if you're caught in that, you know? Well, the key would be you'd not have any more than probably 20 or 30% at the risk of the market in stocks. And if we saw that portion of it down 20, 30 plus percent, you wouldn't dare sell, you'd let it go. And that portion you wouldn't need to touch, you could let it recover, and it always does.

You'd have to go into it with that mentality. We got to hit a break here. Al, you stay on the line. We'll talk just a bit more off the air and much more to come on MoneyWise Live.

Stay with us. We're so thankful you're along with us on MoneyWise Live. I love our listeners. I was just on the phone talking to Al and then Al's wife got on and we had a chance just to chat off the air. And it's just so fun to be invited into your stories and hear what God's doing in your life.

And as you're trying to be found faithful and make decisions and allocate God's money the very best way that you can. It's just fun to do that together. So thanks for your calls. In fact, we've got a couple of lines open. Here's the number, 800-525-7000.

Let's head to Topeka, Kansas. Hi Linda. How can I help you?

Oh, hi Rob. Yes, I know you probably have some other details already and I am wondering what I can say to my son. He's shot me down every time I have suggestions for what he can do. I've been giving him $1,000 a month to help get his credit card bill down. I'm tired and exhausted and stressed and I love him to death and I probably love him too much, but I don't think that I'm, I think I'll put a band-aid on everything and it just goes crazy.

Yes, yes. Linda, tell me about his situation. What's going on in his life? Well, he lost his job in the COVID epidemic and so now he's working part-time at church and they needed a security guard at church and he does that when it's his turn.

They have several people that do that and so that's what he's doing. Linda, this is an incredibly strong job market right now. I mean, folks out there looking for work are having no trouble finding it with very few exceptions. Why is it that he's not gone back to work full-time at this point? Well, he worked as the police transport either in the air or on the ground and that job came to an end in the COVID epidemic.

They, you know, sometimes they even closed down the prisons, the jails and that limited him carrying people and taking them in and taking them out so he doesn't have that job anymore. Do you think that if you weren't supporting him at $1,000 a month, he would go out and find full-time work? Rob, I think my fear is that he will take his life. Now I don't know if that's a threat that he tells me or if he really would do that or hurt other people so I think I feel like I have to help him. Yeah. Has he shared that with you?

It makes a lot of sense. Has he said that to you, Linda? Yes, and he said it to his wife and it upsets both of us, of course, and he'll come back with this. He'll say, well, I can't even be truthful and not get condemned for it. I go, well, Shane, I want you to tell me these things, but I feel I have a therapist and now I tell her these things and I say, listen, she says if he's going to take his life, that's not your fault.

And I go, I would be devastated. Yeah. Well, obviously, there's quite a bit going on underneath all of that that needs to be addressed and addressed with folks who can really help him. He's probably using that in part to manipulate you to do exactly what you're doing and that is to continue to provide. But obviously, when he begins to express a desire to harm himself or others, that's when it gets pretty serious and that shouldn't be a reason that you continue to be manipulated, but it does mean he needs to get some help. I think perhaps sharing that with somebody who can step in to make sure that his family is protected and he's protected if in fact there are issues going on here that need to be addressed. So I think you need to perfectly consider getting him some help, disclosing what's been shared with you to somebody who can step in and make sure that he doesn't hurt himself and that his family is going to be okay. I think from a financial standpoint, clearly, you are enabling him to do what he's doing, which is to not step up and provide for his family to be lackadaisical about getting additional work and taking advantage of a situation where I suspect you don't really even have the resources to do what you're doing. And even if you did, it's not helping him because you are, as you said, enabling him to make poor choices and not be a good steward and not be a provider for his family in a way that he should. And so normally I would say you need to exercise some tough love here and that still may be the answer. You can't live in fear or guilt, but at the same time, I believe you need to do what you need to do to let the proper folks know, whether it's the authorities or somebody else in his life who he will listen to or a pastor to start with at his church who could step in just to make sure that nobody gets harmed in this.

But at the end of the day, from a financial standpoint, I think you know and I can hear in your voice that this is not the best approach for you or him for you just to continue to write this check every month for him to pay for credit card debt for money he has and he spent that he didn't have, especially while he's not willing to go get a job in an incredibly strong market. So I would place a call to your church and ask for some guidance there based on what has been communicated with you in the past. I would prayerfully consider alerting the authorities about what you've heard so that they can guide you in the next steps here.

I know you love him like crazy and that's a good thing, but at the same time, part of the way we love the people in our lives sometimes is difficult because we have to make sure they're protected, those around them are protected and that they're doing what they need to financially in their best interest. So Linda, I would encourage you to take that next step. I would love for you to call and keep us posted along the way. I know this is difficult and I'll ask the MoneyWise Live community to be praying for you. In fact, let me pray for you right now as we say goodbye. Father, Linda is in a really difficult spot and her son, Lord, needs his eyes opened to the reality of who he is, his identity in Christ, his responsibility as a father and a husband to provide and to work, and Lord, with whatever's going on there, whether that's mental illness or any other spiritual issues right now that are afflicting him, we just pray that he'd have breakthrough, that you'd reveal yourself to him in a way that allows his eyes to be opened by the Holy Spirit and that he would respond, that if Linda needs to exercise some tough love and make some hard decisions by bringing others around him to help him and others work through this, that she would have the wisdom and endurance to do that, and we just commit this situation to you and look forward to restoration from him unto you first and foremost and reconciliation with any broken relationships. So we just trust you with this, Lord, and we leave it in your hands. In Jesus' name, Amen. God bless you, Linda, and please keep us posted.

Charlotte, North Carolina. Hi, Eric. How can I help you, sir?

How you doing? Great. I have worked with a previous company no more than maybe three or four months ago.

The company I'm with now lost the contract back in May, and they told me this new company I went with them, and then they, no more than two weeks, they lost the contract, they couldn't keep up with it, and it came back to my old company that I'm with now. But I just got this notice, this important notice, about they had some assets to their network, unauthorized assets to their network, and they did some investigations, fiber and security, did some investigations and stuff, and I made it. Okay. It looks like we have some background noise there. Let's try to get that squared away. I understand you worked for a company that was breached from a network security standpoint.

They probably had access to some of your own personal sensitive information, and we'll talk about how you respond to that to protect yourself moving forward on the other side of this break. This is MoneyWise Live. I'm Rob West. Stay with us.

Much more to come just around the corner. 800-525-7000. We'll be right back.

Welcome back to MoneyWise Live. I'm Rob West. A few moments ago, we were talking to Linda about her son, who's expressed that he has threatened to take his life more than once. And Linda and anybody else dealing with this, the National Suicide Prevention Lifeline is available 24 hours a day, both for anyone in that situation who's thinking about that, or somebody in their life has expressed that, and you just want guidance. So check that out.

It's the National Suicide Prevention Lifeline, and they're ready and willing to assist you. Just before the break, Eric was sharing with us from Charlotte that he worked for a company that had a data breach, and Eric, it's your understanding that your information was compromised as a part of that? Yes. They sent me a letter here showing that my first name or other's self-security or something else could have been compromised.

Okay. And did they offer you free identity protection as a part of that? Yes. I think the SPIRIA, one of the credit bureaus, was offering 12 months of free. Yeah.

Very good. So whenever you're notified of that, and it seems like it's happening more and more often these days, I'd take full advantage of it. You know, unless you have actual knowledge, your information has been compromised, I wouldn't pay for that service because you can, in effect, do most of what they do yourself for free.

But when it's being offered to you, certainly take advantage of it. Beyond that, Eric, I'd encourage you to go ahead and pull a copy of all three credit reports if you haven't already, Experian, TransUnion, and Equifax. You can do that for free at annualcreditreport.com. Just see if there's any inaccurate information on that that is not yours and that, you know, you might want to follow up on, you know, if for some reason somebody got your information and either compromised one of your accounts or opened an account in your name fraudulently. And to that point, I would probably, given that you have actual knowledge that this has occurred, I'd probably go ahead and freeze your credit. This is a free service. You've got to do it at all three bureaus.

But essentially, you'd put a PIN number in place so that your credit report could not be accessed by a lender without the PIN number, which means if somebody tries to impersonate you and open an account in your name, they wouldn't be able to do it because the lender wouldn't be able to access your credit file without the PIN number that the fraudster does not have. So that would be a good thing for you to do as well. So I would follow those steps. Eric, did you have any other questions, though, related to this? Okay.

No. I just just said call each credit bureau and put a phrase on it with an access code, is that correct? Yeah, a couple of things. So pull a copy of your credit report just to review it and make sure everything on each of the three bureau reports is yours and it's accurate. That's step one. You'll do that at annualcreditreport.com. If everything checks out, great.

If you see something that's not yours, there's a way to dispute it. The second step is to contact each of those three bureaus and say, I want to freeze my credit, which just simply means you will establish a four-digit PIN number that locks your credit file unless you give them that number, which will just prevent anybody from opening an account in your name fraudulently. So I think those steps will help you, Eric. And beyond that, just use good practices as you manage your finances, especially when you're online. I really appreciate your call today.

To Oahu, Hawaii. Hi, Jay. How can I help you, sir? Hey, first of all, Rob, I'd like to say thank you for your program.

I love it. And the WISE Council, you give thousands of people. I've been able to pick bits of it and use it in my own life and I really appreciate that. You've gotten a lot of debt, helped us get out of debt.

And because of that, my question is the disposable income we have after our budget, I'd like to know whether it would be better to make extra house payments or extra car payments. Those are the only two debts we have now. Yeah, yeah. Well, first, Jay, thank you for your kind remarks. I appreciate that. I'm grateful for the opportunity to share God's wisdom every day and be invited into the stories of wonderful folks like you, just trying to be found faithful as a steward.

So thank you for saying that. I'm delighted to hear you've eliminated your consumer debt except for the house and the car. You've got some margin, which tells me you're living within your means, which is really key to every financial success. It's not about our income.

It's about taking what God has entrusted to us and living within that, which means living below what God has provided so that we can give beyond even just our systematic tithe and we can save toward our goals or reduce debt. And ultimately, you being completely debt-free will be a wonderful thing. I like the idea of you tackling the car loan. Now, you may have a zero percent offer or something like that. Is that the case?

Yes, the car loan is zero percent. Okay. And what is remaining on it? Forty thousand dollars. Okay. And how much do you have surplus every month? Right around three thousand.

Three thousand a month extra. Yes. Okay.

Great. You know, I mean, from a financial standpoint, I mean, obviously, if you, you know, continue to pay that monthly payment at zero percent, you know, it's not costing you anything. So I'm hesitant to say that you should go after that. And there's, you know, a real benefit to you attacking this mortgage. Are you still working or are you retired?

No, I'm 60 years old and my plan is to retire at 65. So I wanted to get as much of the mortgage paid off by then as possible. Yeah.

Okay. I like that idea, Jay. I'd go right after that mortgage and just start adding this to the principal every month. Just keep making your scheduled car payment like you have. I mean, you've got obviously plenty of margin there, which is great. If you ever wanted to pay the car off, you could.

But at zero percent, you've got that built into your plan, I'd say just keep paying that scheduled payment and let's attack that mortgage so that by the time you retire, you know, you've put a real significant dent in the remaining mortgage and, you know, you're on your way to being completely debt-free. So I think that's the direction I'd head. Well, thank you. I really appreciate that.

That was kind of where I was looking. Good. Well, I appreciate you checking in. And hey, when you become completely debt-free, when you make those final payments, promise me you'll give us a call back. Okay?

Oh, you know what? I absolutely will. All right, Jay, God bless you, buddy. You enjoy yourself out there in Hawaii and at some point I might need to come have a cup of coffee with you. Hey, let's head to Chicago. Tammy, how can I help you? Hi, how are you? Love your program. Good.

Thank you. I just want to ask a question in regards to student loans. I don't have a lot of consumer debt, but my student loans are astronomical and having because of the pandemic, you know, they've really gotten out of control.

So I'm trying to figure out a way to get the payments down so that they're manageable. Yeah. Are these federal loans, Tammy?

Yeah, I got them as a college student and also in graduate school. So yes, they are. Okay. And what do you owe on them?

I'm sorry? What's the total that you owe across the loans? Yeah. I don't even want to say it online, but it's very high. It's close to $100,000. All right.

I was going to ask how many zeros, but yeah, you just answered that. Okay. Well, you know, here's the thing. I mean, obviously this, you know, you want to continue to work hard to pay this down. I think the key is, you know, because this is going to take, you know, quite a bit of time. You know, you've got to make it manageable in terms of building it into your plan. One of the benefits of the federal loan program is that, you know, there are not only loan forgiveness programs and we'll see what happens.

This is a pretty big item politically right now in terms of legislation being considered and forgiveness options and all of that. But separate and aside from that, we've got to build it into your spending plan so that you can, you know, really accomplish the things you want to accomplish and live within your means. You know, the federal loans offer income-based repayment options that should give you some flexibility. Have you inquired about those to see how you might be able to get the payment aligned with your income in a way that makes it manageable? I haven't. I've just been trying to meet their requirements, but I will definitely inquire about the income.

What did you call it? Income? Yeah, it's an income-based repayment. So with the federal loans, you know, if you, when you show them your documented income, they will work with you to, you know, come up with a payment that fits your budget. Now, the downside is, you know, anything that's less than what you're sending now is just going to slow down the payoff process because the interest rate is not changing. But you want to keep these in good standing, of course. And you know, I realize this is going to take quite a while. And so we've got to have a plan that's manageable given the income that you have. And you know, that's why we don't want to refinance away from the federal loans because that flexible repayment option, you know, is a real benefit.

So I would contact the Department of Education and ask about income-based repayment options and see if they can't work with you to make this more manageable. And you just stick with it. And at some point, we'll hopefully hear from you saying, I finally did it.

And the Lord provided and these things are gone. But in the meantime, let's just try to be a good steward of what God has entrusted to you. And we appreciate your call.

Boise, Idaho. We've just got a minute left, Pauline. How can I help you?

Hi, Rob. I just recently lost my husband and through his life insurance, I've got quite a bit of savings. I have enough to pay my house and my car off, which would still leave me quite a bit. I'm wondering if it's wise to pay my house off now.

I'm 61. Okay. And are you planning to stay in this home, Pauline?

Yes. Okay. And what is the mortgage balance that you would be paying?

A hundred and twenty thousand. Okay. And what would you have left? I would probably have, after the house and the car, I'd probably have a hundred and thirty-two thousand. Okay. And would you need to live on any portion of that or is your income covered apart from that?

No. I'm still working and if I paid these off, I would still have enough. I would actually be banking one of my paychecks. Okay. And then what happens when you retire? Are you going to be able to live on Social Security?

I should be able to and I also have a 401k that I can roll over who I've been talking to and they think I should roll that over into an IRA. Okay. And would that give you a lot of peace of mind to know that house was paid off? It would.

Yeah. I like that idea. I'd check with your financial advisor, but I think directionally that makes sense.

It would lower your lifestyle, allow you to save more, and I think puts you in a real strong spot. Stay on the line. We'll talk a bit more off the air. I'm so sorry to hear about your husband.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Thank you for being along with us today. We'll talk to you on Monday. God bless you. I'm John Bonaz.