Overcoming “Budgetphobia”

Do you have a morbid fear of budgeting similar to claustrophobia? It makes you think the walls are closing in on your lifestyle?

Hi, I'm Rob West. You know you should budget, but the idea of putting limits on your spending sends you into a panic. I'll tell you how to overcome your fears and beat budget phobia today.

Call that number 24-7-800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. These folks are fooling themselves if they think they can stay out of debt and save for the future without a spending plan. But what if there was a way to budget without really knowing that you're doing it?

Well, we'll talk about that today. If you have budget phobia, the first thing you want to do is pay attention to your spending. You don't have to make any drastic changes right away. Use whatever method you like to monitor what you spend. The free MoneyWise app can help you do that. It'll automatically track your spending so you can look at it in real time. Of course, it's a powerful tool with three different ways to budget your money, but don't worry about that right now. Just use it to see a list of your spending. If you look at it every day or two, you'll start to get a picture of where your money is going and why you don't have enough left to meet your monthly obligations, let alone saving. But there's another huge benefit to seeing a list of every expenditure. You'll probably start automatically spending less. When you're thinking about spending, you'll do less of it.

Of course, you don't have to use an app. You can do this the old-fashioned way. Keep a little notepad with you and jot down everything you spend.

It'll accomplish the same thing. Now, the next step to overcoming budget phobia is one of the key reasons we budget in the first place, and that's saving. You always wanted to save, but again, you were afraid it would cramp your lifestyle. Well, you can take the worry out of saving by simply not thinking about it.

Set up a system where you do it automatically. For short-term savings like your emergency fund, have some of your money automatically transferred each month to a savings account where you don't see it unless you're looking. Online banks are great for this. For longer-term investing, set up your 401k for salary deferral or IRA to automatically pull something out of your checking account each month. Now, to start with, you don't have to put a lot of money into either form of saving. Set up those automatic transfers to put something into your emergency fund and retirement account each month, even if it's just a little. You can make adjustments later. Once that's taken care of, you're halfway toward beating budget phobia.

Now, here's the next step. On a paper calendar, enter each purchase on the day you make it. As you do that, you'll start to see whether you have enough money to make it to the end of the month, hopefully with something left over. This may cause you to think about things you're buying that you don't really need.

That's good. Jot those down. That'll come in handy later. And here's the next step, and this is really helpful for folks suffering from budget phobia. All you do is add up all of your recurring monthly bills so you have one total number, and include your saving and giving in that total. Let's say it comes to $2,000. Divide that number by the number of paychecks you get each month, and let's say that's 4.

So 2,000 divided by 4 gives you $500. Now you know you have to set that much aside every payday to meet your monthly obligations. Now you want to set up a completely separate checking or savings account for these recurring expenses. And again, you can set up an automatic transfer of $500 from your checking account into this new account every payday. That way, you'll always have enough money on hand to pay your bills.

But here's where you need to be careful. Once this is set up, the money for your bills and necessary expenses like groceries and gas will be pulled out of your checking account. You might be tempted to think you can spend freely with whatever's left over.

That's not good. This is where you have to keep checking back with your list of daily expenditures. It'll naturally help you curtail any impulse spending. Take any money you have left over and apply it to your debt or put it into savings.

Once you do all of this, you'll be living on a budget without even knowing it, and that's how you beat budget phobia. Again, you can use the MoneyWise app to accomplish all of this. Just search for MoneyWise biblical finance where you download apps. Your calls are next, 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. We'll be right back. Delighted to have you along with us today on MoneyWise Live. I'm Rob West, your host, and phone lines are open. We'll head there in just a moment for your questions on anything financial. Here's the number to call, 800-525-7000.

We've got some lines open, and we'd love to hear from you, 800-525-7000. We started today by talking about budget phobia, and one of the great ways to get beyond that is to have a system to control the flow of money in and out. Well, that's why our team spent well over a year, in fact, multiple years developing what is today the MoneyWise app, so you can connect to your institutions, download your transactions.

Here's the key. We recognize that not everybody wants a system that manages money exactly the same. Some of you are more directional than detailed.

Some of you are more hands-off than hands-on. Well, you want our track-only system where you can download your transactions and just see each of those organized by budget category so you can keep tabs on it. All the way to our digital envelope system for those of you who are detailed and hands-on. Perhaps you want to set up a digital envelope for each of your budget categories, fund that out of your funding account balances tied to checking or savings, whichever ones you designate, and then have your transactions automatically categorized into those envelopes so you can see, perhaps along with your spouse at any given moment, how much is left in each budget envelope.

Well, we've got three systems. One of those, I'm sure, will fit perfectly for you. You can download the MoneyWise app wherever you get apps. You'll just head to your app store and search for MoneyWise Biblical Finance. You know, one of the other things you'll be able to do as a part of that is organize your spending by not only your budget categories but also live, give, owe, and grow. It's a great high-level view of your spending. What's going toward your lifestyle? What about growing or saving? What about the amount that's going toward that which you owe or what about that which you are giving? Well, you can toggle a button and see exactly what's in each of those categories, and here's where that helps. It allows you to set goals to change those percentages over time so we can increasingly see the amount going toward give increasing and the amount that we have going toward owe decreasing. Perhaps lifestyle gets capped or maybe you want to try to ratchet that down a bit. Whatever it might be in your situation, you can get that view that allows you to make those decisions. So check it out today.

It's the MoneyWise app, and you can download it at your app store. All right. We've got some lines open today. We want to begin taking your calls and questions here in just a moment.

Here's the number, 800-525-7000. Before we dive in today, let me take one emailed question because I often miss out on the opportunity to get to your emails. This one says, we are trying to find a financial coach.

By the way, Charles writes in with this. We're close to retirement. Where should we start?

What questions should we ask? And you've got a couple of options. Number one, our MoneyWise coaches would be happy to help. Once you become a pro subscriber to the MoneyWise app, you automatically have access to our MoneyWise coaches at no cost, and they can give you some assistance, Charles, in helping you set that retirement spending plan, which will be key, and then comparing that to the income sources that you have. I would start there, and if you determine you need the help with your coach of a professional, well, then you can avail yourself of a certified Kingdom advisor. So become a MoneyWise pro subscriber and connect with a coach by scheduling an appointment right there in the app. I think that'll be a great next step for you, and we appreciate you writing in. All right. Let's head to the phones today, 800-525-7000.

We'll begin in Tampa, Florida. Hi, Cameo. How can I help you?

Hello, how are you? Very good. Thanks for calling today.

Yes, my husband and I, we've been trying to set up a plan where we say... Let's do this. If you wouldn't mind just turning down your radio ever so slightly, I think that delay is throwing you off, and then go ahead and restart your question. Thank you.

Yes, thank you. So we're trying to build up a budget where we can actually save, like you were saying, that we can live under 30% of our budget monthly. Okay. Yeah, and so what is your struggle at this point?

What is tripping you up? Saving money. That's our struggle. For example, we were adding up our bills, and at the end of the month, we came up with, let's say, $3,200 a month, and we are making like $5,000 a month. So with that that is left, what will be your suggestions for us to either invest or save money in the bank? What will be your suggestion?

Yeah, very good. Well, I'm glad to hear that you say that you understand what it is that it takes to fund your lifestyle on a monthly basis. I might dial into that a little further just to be sure that you've captured everything. And one of the ways to do that is either begin to track that manually, it could carry a small notebook around with you and record every transaction, or you could do that in the MoneyWise app. But the key is that you want those not only recurring expenses that you get a bill for, you want to capture all the discretionary spending as well. That's things that we don't get a bill for, but we spend money on regularly. I'm thinking about groceries and eating out, I'm thinking about clothing purchases and miscellaneous and entertainment, those things that just come up throughout the month that can be budget busters. I want to make sure you get everything into the budget, including those things that don't even happen monthly. So like I'm thinking about a semi-annual insurance premium or homeowners association or Christmas, you know, we're dealing with that right now. If we haven't budgeted for it, all of a sudden we have this spike in Christmas spending and we don't have the money for it. So I want to get everything in there and get a true picture of what it takes to fund your lifestyle on a monthly basis.

And then go in and take a finer look at it to say where might we want to trim this so we can in fact create the margin we're looking for. Once you have that nailed down, let's say it is in fact $1,800 a month, then I think we need to look at your priorities. The first priority I would look at would be to say are we giving systematically? The amount is between you and your husband and the Lord, but I would build something in on the front end to begin to become a systematic giver. That is recurring monthly. Secondly, I'd love for you to have an emergency fund. Now the amount you would set as a goal for that emergency fund depends on this factor. Do you have any credit card debt currently that you're carrying a balance on month to month? Not necessarily.

We're very good on that. We're basically maybe all together like $1,200 right now. Maybe. And do you pay that off at the end of the month? Are those monthly bills that you're charging or is that a balance that's been hanging around for a few months? No, we actually try to pay it off monthly to get it off of our head.

Yeah. I think the key with credit cards is I don't have a problem with them as long as you're using the spending for budgeted items, things you planned on, and you always have the money to pay it off in full. And if you've got $1,800 a month left over, you should never carry a balance beyond the statement period because there's just no reason to be paying that interest. So since effectively you don't have any credit card debt, the goal for that emergency fund is going to be three to six months expenses. Let's say we start with three months expenses, which would be roughly $10,000 you would want to save. That's going to take about six months for you to get there based on what you have available.

And so I would really focus on building that up. I'd put it in a separate savings account earmarked for emergencies connected digitally to your checking account. So you could use Ally, which, by the way, just announced they're waiving all their overdraft fees. Glad to hear that. But Ally Bank, you could use Capital One 360.

You could use Marcus. Any one of those three would be great online savings accounts, again, linked to your checking, wherever that is, and then go ahead and automatically transfer that money. Once you get to three months expenses, now we can look at other priorities. Are you all putting anything aside for the long term for retirement?

Yes. We have like a 401K through his job and through mine. Okay. And do you know what percent of your income is going into the 401Ks when you add it all up? I think it's 8%. 8%.

Okay. And so I think a goal there would probably be to get that up to 10 to 15%. So that might be one objective in terms of how to allocate this additional surplus that you have. Beyond that, do you all have any other short term or medium term goals? Are you trying to save for a down payment for a house? Do you have kids that you're saving for college?

Go ahead. That's basically our next step. We're trying to, we have a set of amounts for savings to put under like, you know, for a house, a payment, down payment for the house. But right now with the economy and the, you know, inflation, it's really like, especially here in Tampa, the houses are outrageously expensive. So we're right now renting because we just moved here. We're brand new in Florida and trying to get to know the market and stuff. So we're trying to save some money to put down for a house. Okay.

Very good. And you know, maybe it's a good time to buy purchase right now. We don't know how the market is going to get later on.

If it's going to get worse, we don't need that idea, you know. Yeah. Do you have any savings that you've accumulated at this point for a down payment? Yeah.

We have like $12,000, $17,000. Okay. Very good.

Yeah. So I think, you know, you may be in a good spot in the sense that I love that since you're new to the market, you're taking your time to figure out where do we want to live? You know, if your kids are a consideration, what school district and where do we want to be? Where are we going to go to church and where is our community going to be? That's going to be key.

And you're right. Housing prices are very high right now. I think we could see, I don't think we're in a bubble where we're going to see a significant decline, but we certainly could see a leveling off of the housing market. I think the key is what is the right time for you to buy when you're ready financially? And one of the evidences of that is going to be, Camille, that you've got at least 20% for a down payment.

So if you want to buy a $200,000 home, that's $40,000, $300,000, that's $60,000. And so I would be saving aggressively between now and then until you're ready to make that purchase. We'll be right back. Stay with us. Thanks for joining us on MoneyWise Live. I'm Rob West, your host, taking your calls and questions today. We've got some lines open.

What's on your mind? We'd love to hear from you with anything financial. 800-525-7000, that's 800-525-7000. We're going to stay in Florida and talk to Ramon. Hi Ramon, thanks for calling.

How can I help? Thanks for calling. Hey, how are you? First time caller. Great.

We're so glad you did. What's on your mind today? All right, so I'm refinancing my house, O-182. My new payment is going to be $274,000. I'm paying off all my credit cards, the car, and I'm taking some money out to build a pool also. So I want to know if that's a good idea or I will be saving. My payment is only $1850 right now, and my new payment is going to be $2060. So I'll be saving my car payment, my credit card payment, and so on.

Yeah. You know, I'm not as concerned. I mean, although it's a consideration, I'm not as concerned about the payment as I am whether or not this makes financial sense for a variety of reasons.

So let's unpack this a bit if you don't mind, Ramon. What is the value of your mortgage today, roughly? $182,000. Okay, and what do you believe the home is worth? It's $380,000. Okay, about $380,000. So you've got a couple hundred thousand in equity, and what is your current interest rate on the existing mortgage? $4.1875 or something like that.

Okay, and what are you looking at getting with the interest rate on this new loan? It's actually $4.25. Okay.

Why so high? What is your credit score? $4.125, yeah.

Okay. That's still higher than the market rates right now. Is it your credit score that's causing some challenges? Yeah, it's a little bit shabby, yeah. What do you think it is roughly? It's $602,000 right now, and I had some issues.

I had surgeries and stuff like that. Gotcha. Yeah, and how much were you looking to pull out cash total to add to the mortgage?

Well, it was roughly around $80,000. I will pay off the car, all my credit cards, and cash out for the pool so I can build the pool for the case. Okay.

All right, so here's my challenge with this. Number one is I don't like cashing out of a mortgage. About the only one would be for the pool in the event it makes sense financially for you. You have the wherewithal to do it because that's going to improve the value of the home, and it really is part of the dwelling. The other two items, the car and the credit card, essentially what we're doing is we're taking either unsecured debt in the case of the credit cards and securing it to the house, and then we're taking secure debt collateralized only by the car, meaning if you don't pay it, you lose the car, but now we're tying it to the house. So if something happens in your financial life, you're unable to make good on this payment, now you're putting your home at risk, number one. How many years do you have left on your current term, do you know?

On my term? Of your mortgage. 24 years. All right, and are you doing a new 30 year? And I'm doing another 30 years, yeah, but then I was planning to send one extra payment a year. I don't know if that would mean... Yeah, so that would be good. That would get it probably back down to about 25 or 26 years.

The challenge is this is going to be costly to do, and the problem with credit card debt, although it may be a one-time thing with medical issues, is unless you've solved the problem that led you there in the first place, this is going to take the pressure off and the credit card debt is going to return. So if it were me, I'd push the pause button on this and not roll all of this into the house. Stay on the line, we'll talk a bit more off the air. We'll take a quick break and be back with MoneyWise Live right after this.

Stay tuned. Thanks for tuning in to MoneyWise Live. I'm Rob West, your host, taking your calls and questions today. Here's the number, 800-525-7000.

That's 800-525-7000. Whatever's on your mind today, we'd love to hear from you and see if we can help you apply God's Word to your financial life and move forward with confidence. Just before the break, we were talking to Ramon. We had a chance to talk a bit more off the air.

Here's what I would say about Ramon's situation, and I know many of you are in the same situation out there right now. You're feeling the pinch in your budget. You're feeling the squeeze month to month. There's more month than money as you move through the month, and I get that.

And so you're trying to solve the problem. The problem is with the rolling it all into the mortgage is that's just not a good long-term solution. Yes, it will take some of the pressure off because now the credit card payments go away, the car payment goes away. And essentially, by getting a new 30-year mortgage, you're only increasing the monthly payment slightly. The problem is we've now just extended this debt out over a much longer period of time, and it's secured to the house, which means the house is at risk. Furthermore, it often means we haven't solved the underlying problem that led to the credit card debt or borrowing for the car in the first place, which is living beyond your means. So now we've added $80,000 or $90,000 to the house, and six months or a year later, we find ourselves in a situation where the credit card debt is back, except now we have the credit card debt on top of a mortgage that's $100,000 higher. We don't want to do that. We want to do the hard work of dialing back spending, getting into a debt management program, paying off the debt, and keeping the mortgage where it is, and only refinancing when we can match or lower the term and save at least a point to a point and a quarter on the interest rate.

I know it's not easy, but if you do the hard work, it'll be a much better long-term financial decision. All right, we're going to take some more phone calls here today. We do have a few lines open today.

I think we're already many folks starting on Christmas break because we've got a few less than we normally do at this time in the program, which means there's a place for you. Here's the number, 800-525-7000. That's 800-525-7000. Nydia is in Florida, if I'm saying that correctly, and thanks for your call today.

Go right ahead. Hi, Rob. Yes, we have a son who is somewhat challenged, and so he is working at a grocery store, and now he has moved up to a full-time warehouse job, but not making enough to move out or anything like that. He's basically just working to pay off his car, and we have him on our credit card account just to teach him how to use that when absolutely necessary and paying it off. But what is the best way to get him on his own and to build credit for him? Because even buying his car, we had a cosign for him.

I see, yeah. Well, I think the key is establishing the rhythms and the disciplines, number one, teaching the biblical principles of finance and money management, and then beyond that, obviously, is the credit score, although it's a very real part of this, as evidenced by the fact that, as you said, he's struggled to move forward in his financial life in certain areas. So I think with regard to teaching him, I'd like to send you a copy of Howard Dayton's book, Your Money Counts, and I think that could be a great resource. Perhaps you all sit down and work through that together, a chapter at a time, to teach him everything from God owns it all to money as a tool to the devastating impact of debt that compounds against you over time, the benefit of compounding that works in your favor and living within your means and setting a spending plan, all of these big ideas and concepts that find their root in God's word, I think will be really key to teach and impart to him.

And if you stay on the line when we're done today, we'll get your information, get that book out to you. So I think that's number one. I think number two is coming alongside him in the practical establishment of the spending plan. If he doesn't have those skills already to teach him what it looks like to develop a spending plan and capture all of his discretionary and recurring expenses and have a plan to control the flow of money in and out, perhaps using either a physical or a digital envelope system, I think that will be really key as he sets out. In terms of building that credit score, certainly adding him as an authorized user is one way to do that. Just keep in mind that if he uses it in a way that you all haven't allowed him to, that will be your responsibility. And if you all happen to miss a payment or something like that, I realize that may not be an issue, but just be really careful because that negative information will pass back to him as well.

So just be aware of the implications of the authorized user status. In terms of getting him set up on his own, another option, an idea would be what's called a secured credit card where you or he would put a certain amount on deposit, let's say $300. They would issue a credit limit against that deposit, which means they have no risk, and then allow charging privileges up to that amount. You could establish a recurring charge to that account every month. It's a budgeted item.

It could be very small, just a few dollars, and it hits the account. It gets paid off every month. What that's going to do is establish him as an on-time payer. And then the key will just be as the history progresses, meaning the longer this goes on where he's an on-time payer every month, as he adds different types of credit over time, and as he keeps his balances low, which means a low credit utilization, that credit score will take care of itself over time.

I think the key will just be that you start those things in motion now and begin the teaching side of some of the things that I mentioned. Does all that make sense? Yes. Actually, we have him with Capital One, and they have what they call a money card. Yes. So he is doing that and has been very responsible with the credit card and so forth. So I think his credit score is like 780. Okay.

Very good. So that's really not an issue then. He's got a good credit score. So what is the challenge you're running into then with him? The challenge is how to – because basically he lives at home, so everything is provided for him. Should we just make up a budget according to what we spend on light and electricity and all those things, food and whatever? Yes. The only time he spends his money is for personal things, and if he wants special treats or foods or whatever, that's what he does. But he doesn't really make enough for rent or anything like that right now.

Yes. Well, I think the key there – and I realize he's got some ongoing challenges medically, and so that's obviously something you're going to have to work through in terms of when he's ready to launch out on his own. But this is a great opportunity if you all are willing to cover the expenses for him to save everything he gets. And I think the key will be whether you all assign him certain expenses that he pays, but you just keep that in a separate account that you can give back to him at some point, or you just task him with saving that on his own, saying, listen, son, we're going to cover all these expenses for you, but the deal is we'll do that so long as you're saving this so you've got a bit of a nest egg so that when you're ready to go out on your own, you are able to work more and have a sustainable income, you've got a nice amount to get you started with first-lasting security in an apartment or something like that. So I think right now it's a matter of coming up with a plan that makes sense that drives toward the ultimate day where he's launching on his own.

What's it going to take to get from here to there financially and from an educational standpoint? I think those are the keys. Stay on the line. We'll get your information, get this book out to you. This is MoneyWise Live. Stay with us.

We'll be right back. Thanks for tuning in to MoneyWise Live. I'm Rob West, your host. Hey, are you a part of the MoneyWise family?

Do you listen regularly? Are you on our website? Perhaps you're using the MoneyWise app or you've benefited from one of our coaches. Well, if that's you, we would invite you to be a financial supporter of the ministry. We are entirely listener supported, which means we do what we do as a result of your generous support. And here at year end, we're very mindful of the opportunity to see folks partner with us financially so we can plan for all the exciting things we have coming in 2022. So if you would consider beyond the giving to your local church a gift to MoneyWise Media, we would be grateful. It's quick and easy to do at our website. Just head there. MoneyWiseLive.org. Click the donate button. You can give online quickly and securely.

You'll also find the physical address if you'd rather mail a check in. But thanks in advance for your support. Let's head back to the phones today. Janet is in Georgia. And Janet, do you have a testimony today? Yeah, I started out with Larry Burkett in Crown Ministries and my husband, I just got a call that was just out of the bank.

I sent a wire transfer that paid off my mortgage. Come on. Today you did that?

Yeah. That's incredible. I'm so glad you called to share your excitement with us. That's really great.

So let me get this right. You've been listening all the way back to Larry Burkett. You've been applying God's principles. And that has resulted in this day where you have actually made the final payment to your mortgage. How does that feel?

Oh, it feels so great. We have actually paid our 15-year mortgage off seven years early. Wow. Wow, that's incredible. How did you do it? What changes did you need to make? What have you done over these years to make that possible? Well, when Wayne and I got married 20-some-odd years ago, we both had credit card debt, IRS debt, and we just knocked them out one at a time. And I remember being this excited the day that we – he didn't have a lot of student loan, but we were able to write like a $2,000 check because we saved and pay off that debt. And now we don't have any credit card – we have one credit card that gets used for like vacation, Christmas, paid off every month.

And now we can really say we're debt-free and we're going to save up for another car. Oh, that's incredible. That is great. And you've obviously made some key decisions along the way to cap your lifestyle, and I assume that's even despite some increases in income along the way as well. Is that right? That's right.

I'm looking at like $3,000 extra a month now. Wow. That's incredible. You know, that doesn't just happen by chance. It happens by choice. And you know, you have purposed yourself to avoid this trap that your level of spending always rises to your level of income, which is the way it is for most folks. But you've got to protest to the contrary if you're going to do the things you all have set out to do and you've now accomplished, and that is to have plenty of margin, to live within your means, to purpose yourself to be debt-free, and now you can experience some hilarious giving and some additional saving and buying cars with cash. And that's the fruit of coming that comes with living by God's principles.

Go ahead. I think you were going to say one more thing. Well, what has helped me is we give ourselves $40 every two weeks to just spend. And so you can either save it up and spend it big or you can blow it on McDonald's.

But it doesn't matter if the choice is yours. But yeah, it's just so exciting to finally say, I own my house. I bet. That's really great. Well, there's some key principles.

Yes, that's exactly right. There's some key principles that you've articulated just in your story, and I think these are worth mentioning again. I mean, we have got to purpose ourselves to set a goal, and those goals need to align with our values. What's most important to us? And we've got to live within our means. And we've got to protest against our lifestyle creep, which is so prevalent for so many folks. And we've got to build the ability to have some flexibility into our plan. And that $40 every two weeks that you get, it's mad money that you can enjoy, but it's a part of the plan.

And that's the key is that it's a part of a bigger picture that you're driving towards. So, Janet, listen, congratulations to you and your husband for the hard work you've done. You guys go enjoy that. And thanks for sharing your testimony today. Thank you. All right. God bless you.

That's exciting. All right. Let's head south. Hollywood, Florida. Astrid, thank you for calling today.

How can I help? Good afternoon. I just have a question. You know, my husband and I, we kind of feel safe a little bit financially to explore the stock market.

And we do not know where to start. And I wanted to try something that is more conservative where it's not too risky. I see. So do you have an emergency fund, some funds set aside for unexpected expenses? Yes, we do. Great. And do you have a retirement plan at work that's available to you, either you or your husband? We both do at work. Okay. And are you taking advantage of that or was that what you're talking about here?

No, we do take advantage of that. I have a 403b account with my job and he has a 401k, which is they are both tax deferred account. I have an IRA account as well. And so but we kind of heard about the stock market, but I just like I don't feel like I don't want to take any risk. And, you know, and I don't know where to start. There's some advice that was given to me.

I explored them. But it's just like, you know, when you're not experienced, I don't want to take any chance. Sure. Well, let's we'll get to that here in just a second. Do you know roughly what percentage of your total income is going to those 401ks or 403bs? Well, it's not a percentage. I know that I have like about $800 a month to my 403b. My husband have about roughly $700 to his 401k.

Very good. And what about the investments inside those? Are you invested in mutual funds or some of the sub accounts in those 401ks? No. The full review from what I know, I think it's a 500 account, S&P 500. I think both of those accounts are.

Very good. So you're already in the market and taking risk with that doesn't mean that's a bad thing, but you are invested in stocks. It sounds like the S&P 500, which would be a fairly aggressive, not overly aggressive, but it's certainly not a conservative account because it's all growth stocks. Now, what about just bumping up the contributions to those 401ks as opposed to trying to invest outside of that? Because what I would be looking to do is to get the total contributions going into those tax deferred accounts up to 10 to 15% of your income. And then inside those 401ks and 403bs, make sure you're picking the right investments so that it matches your risk tolerance because you said you want to be on the more conservative end of the investment spectrum. I would do that as long as this is for the long term, Astrid, before I would be looking to invest outside of those accounts because the tax deferral is really going to benefit you.

So let's do this. I would contact your HR department and see if you can get somebody from the plan administrator to contact you for each of the retirement accounts to go over the investment options in there. So you can see where you invested now and is that the right place should you make a change to bring that more in line with your goals and objectives. And then I think you can have the freedom at that point to begin ratcheting up the amount that's going into those accounts toward that 10 to 15% of your income goal as opposed to just a flat amount like you're doing right now. So I would take that as your next step. I also want to send you a copy of the Sound Mind Investing Handbook. So if you stay on the line, we'll get your information. I think that'll be a blessing to you so you can begin to learn about not only investing, but investing from God's perspective. And thank you for your call today.

We're going to finish today in Chicago, Illinois. Thomas, how can I help you? Yeah.

How are you doing, Rob? Thanks for taking the call. My question was, is there ever a time with a permanent life and policy where you're in so deep that it's better to just keep the policy instead of canceling and moving into the market? Not necessarily. I mean, I think it's all a function of what is the surrender value that you have available to you. And then beyond that, are there any penalties associated with you taking that money out? I think the other consideration is how does the death benefit that's a part of that policy, if there is one, factor into your overall financial plan? And let's make sure that you have the appropriate amount of life insurance coverage, which I would prefer you to have as a term policy before you cancel anything, because we want to offset that risk. If something were to happen to you and you have people counting on your income, that there's enough death benefit to offset that risk entirely. So, you know, as you look at this, I would be looking at how do I get the right coverage first? And once that's in place, now, what cash value is there?

What penalties would go into place? And then, you know, what could I do to repurpose those investments so that that money could grow, perhaps without any of the things that are holding it back, you know, inside that policy and without the ongoing fees? Does that make sense?

It does. Okay, so I would take a hard look at that and just see how have you been doing return wise? What are the penalties? What death benefit do I need? I think once you get those pieces in place, it'll be clear whether it's time to collapse that policy, invest separately, which would always be my preference, but always be sure that you have the right death benefit in place first. And Thomas, we appreciate your call today. That's going to do it for us today, folks. Thanks for listening and tuning in. We appreciate it.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I want to say thank you to my team today. Eric Tidwell on phones, Deb Solomon producing today, Amy Rios Engineering. I want to say thank you to Dan Anderson as well and Jim Henry. Couldn't do it without them. Thanks for being here. We'll look for you tomorrow. God bless you.