2021-12-9_MWL

First Timothy 5-8 reads, but if anyone does not provide for his relatives and especially for members of his household, he is denied the faith and is worse than an unbeliever.

Hi, I'm Rob West. Having life insurance is an important way to provide for your family, but it's easy to think that more is always better. Today I'll talk about ways you could be overpaying for insurance. Then I'll take your calls at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. The real cost is about $160 a year. But a recent survey showed that more than half of respondents overestimated the cost, millennials in particular.

Nearly half of them thought it would be around $1000 a year. The moral of that story is, if you're expecting a high price, you're setting yourself up to overpay. And I've got a list of five more ways you could overpay for life insurance without realizing it. First, if you buy whole life insurance instead of buying a simple term policy. This happens when you get caught up in the idea that your policy should have a cash value during your lifetime, instead of what it will do for your family when you die. Whole or permanent life policies build a cash value that you can tap into for certain things while you're still alive.

But that's very expensive money. You'll be far ahead if you invest the difference between a whole life and term policy in your retirement account. Instead of getting snared by a policy's cash value, think instead about how much insurance you actually need to protect your loved ones.

And we recommend about 12 to 15 times your annual salary. Then look for the least expensive term policy that provides that amount if you die during the policy's term. Another way that folks often overpay for life insurance is by not paying attention to costly add-ons, which the industry calls riders. True, these can be useful in customizing your policy to fit a specific need you might have, but they can also be very pricey. Maybe the worst is something called a return of premium rider. If you opt for that one, the insurance provider will give you back all of the premiums you paid when the policy expires.

Sounds like a great deal, right? You might even be tempted to think that the policy has cost you nothing. The problem is the single rider could double your premiums, and worse, you don't get the earnings you might have had if you'd invested the difference instead.

So you'll want to stay away from that one in my opinion. Another rider to watch out for is accidental death. It raises the benefit if death results from an accident, but the restrictions as to what type of accident and under what circumstances it applies can severely limit its usefulness.

If you have to get hit by a meteor, it's probably not worth it. Another way you can overpay for life insurance is when the provider doesn't require you to have a medical exam. Most companies, for most policies, will require you to get a checkup and have blood work done. If the company doesn't require one, you can expect to overpay.

Now, I should point out that sometimes a policy that doesn't require an exam can be a real blessing. For example, if you have a pre-existing condition that might limit your access to a standard policy. These are called guaranteed issue policies, but keep in mind that you'll almost certainly have higher premiums and less coverage with a guaranteed issue policy.

Alright, moving on. Another way to overpay for life insurance is if you get something called an annual renewable term policy, or ARRT. These can appear very attractive because the premiums start out low.

Here's how an ARRT policy works, though. You're basically guaranteed coverage for the life of the term, but each year you have to renew the policy. And of course, each year the amount of your premium goes up. As I said, premiums begin low but gradually increase through the years. It won't happen right away, but at some point you'll be paying more than you would for a standard policy. So again, go with a simple term policy that has level premiums throughout its entire term. Now, the last way you can overpay for life insurance is by procrastinating.

True, your chances of dying at age 30 are far less than it would be at 50. Insurance companies know that, too, and that's why policies get more expensive as you age. If you have dependents who rely on your salary, get term life insurance today. Choose a policy that will be in force until your dependents are grown up and on their own.

That way you'll have adequate coverage without overpaying. All right, your calls are next. Here's the number, 800-525-7000.

Call it 24-7, 800-525-7000. I'm Rob West, and this is MoneyWise Live, biblical wisdom for your financial decisions. Thanks for tuning in to MoneyWise Live. I'm Rob West, your host.

This is biblical wisdom for your financial decisions. We'd love to hear from you today. In just a moment, we'll begin taking your calls and questions. You can give us a call right now at 800-525-7000. That's 800-525-7000.

We're going to begin today in beautiful Bozeman, Montana. Bruce, thank you for calling. Sir, how can I help? Good. How are you doing today?

I'm doing real well. Thanks for your call. Okay, so I'll get to my question. I have a rental property in Bozeman. I can sell it. I'll make 700,000. Now, the loan on that and my house, I put them together, is about 280,000. Okay, that rental property brings in about $2,600 a month. So, my question is, do I sell it and pay off everything? That would be totally debt-free. When I pay the 280,000 off and then plus in the capital gains, I think they're going to be about 160,000. So, I'd end up with about 200,000. Or would it be better, which I always thought, was to keep that for retirement income, but now I still have that debt on my loan. How does that 280,000 break down between your primary residence and the rental? Well, I kind of bunch it all together. So, what I did is I refinanced my rental at a lower interest rate and I could put it all on my house.

So, I mean, it's been 10 years. So, it's kind of, I don't have a breakdown of that, I guess. Okay, but is it all collateralized by your primary residence or it's split between the two? No, it's all collateralized by my primary.

Okay, so you basically have one first mortgage on your existing home of 280 that was a result of a refinance of two mortgages that became one. You said that a lot the other night. No problem. You put that together pretty good. As you think about this property, Bruce, talk to me about the amount of work you have to put into it, whether that's something you enjoy, whether you think that's sustainable.

Are you able to keep up with this? Well, that's the beauty of it. I mean, I built my house, that's what I do for a living. So, I pretty much fix everything that I can do, which is fortunately a lot.

So, as far as that aspect, it's not that big of a deal. Yeah, okay. And what is your plan in retirement? Do you have retirement accounts or would you rely on the rental income plus Social Security exclusively?

Well, I think right now, if you want numbers, I could probably got 250,000 set aside for that plus the rental and plus Social Security. All right. And do you have a sense of, well, are you still working right now? Yeah, 55, 54.

I don't want to age myself. Very good. And are you still contributing to a retirement account, stock and bond portfolios from your surplus?

Yeah, I did. But I actually got out of the stocks just because I didn't like them, so I meant some other things. Okay.

Very good. But you're going to continue to put that money away. So, over the next decade, that 250,000 will grow to some number higher than that. Let's say that grows to 300,000 or 400,000. You'd have that plus the rental income plus Social Security. And you believe that would be enough to cover your lifestyle?

Well, I mean, I would like to say yes, but I didn't really research that. I mean, my kids will be gone. I won't have colleges right now. I still got a little college stuff to work on. Sure. All right. Well, I think that's the key.

Yeah. I would be going into retirement with a pretty good understanding. It's a decade or more away, Lord willing, but if you can continue to work. But I'd go into that knowing exactly what you need to cover your lifestyle each month. I think here's the key for me. You have the skill in this area. You're not relying on others to come in and maintain the property. You are doing that yourself just fine. You've got a good stream of income coming in.

I expect the stock market to be choppy at best over the next couple of years. You've already said you've exited the market. So in terms of where you could maximize this capital in terms of the continued appreciation of the property plus the rental income that you're generating, which all by itself should between now and retirement allow you to eradicate the rest of this debt, hopefully, if not get pretty close. And then at that point, you could decide whether you have the energy and the desire to continue to maintain the rental property and let that throw off the income you need in part to fund your lifestyle or whether at that point you want to liquidate it. But I don't see a compelling reason to do that now, given that it's cash flowing so well, it's covering the expenses related to the first mortgage on your primary residence.

And you sound like you're enjoying or at the very least have the skill set to maintain it moving forward. So unless there's something else here where you just have a conviction about being free or some other reason, I think I'd just stay the course with what you're currently doing. Okay, sounds good.

And just to add really quick, I don't want to take any time, but that was my, I was going to get, I'd be able to get about 200 or a little over for that. And then I'd probably go back into some kind of real estate, which is harder to do around here now. And then I wouldn't have the debt. So it was kind of a debt thing. Well, and I think that's not worth glossing over because there's the financial side of this, which is how do you take this asset, which is today tied up in real estate and could be tied up in a different piece of real estate, but without the debt service. But you'd have to buy something and property prices are high right now. So there's the financial side of this. But then there's the non-financial side, Bruce, which I would say is just as important. And that is if you would have greater peace of mind knowing that you're completely unencumbered, which means perhaps you have a bit smaller piece of property without as much cash flow, but you're debt free at that point. So you get the freedom from being unencumbered and obviously your expenses are lower now because you're not servicing a roughly $300,000 loan. So it's really going to come down to do you feel like you have a really good piece of property that you want to hang on to that's going to appreciate quicker.

You obviously know its age and condition because you've owned it for quite a while. And then apart from that, are you comfortable still servicing this mortgage from the cash flow or would you just really sleep better at night knowing that that was gone? And I think that's really the decision point here, which is more than just the housing market and the real estate economy.

It really has a lot to do with just kind of where you're at and what the Lord is leading you to do. So in light of that, what do you think is the right decision for you? Well, I think it's a good problem to have.

Yes, it is. So the way you put it, it's good either way. And it's what I feel more comfortable with and would have led to do. Yeah, I don't think you can make a wrong decision here.

Perhaps take the next couple of weeks and as things slow down a little bit for the Christmas season, ask the Lord to give you some wisdom here. And if you feel a real strong conviction to be out of debt, then I'd say go for it and let's start looking for that replacement home that the Lord would bring. But if you feel like, nope, I like this property, I want to hang on to it, I've got good cash flow, you're not violating any principles by the debt you're carrying because the economic cost is lower than the economic gain. And you're not denying God an opportunity to work here and you're not presuming upon the future because you have plenty of collateral.

So I think it really just comes down to what you're most comfortable with at the end of the day. And as you said, it's a great problem to have. And by the way, I absolutely love Bozeman.

I had a group of friends that we would take a trip to Big Sky every year and it was one of my favorite times of the year to be out in God's country. Spectacular. Thank you for your call, sir. All the best to you in the days ahead. This is MoneyWise Live. We've got some lines open, perhaps ones for you.

Here's the number, 800-525-7000. Stay with us. Much more to come just around the corner. Thanks for tuning in to MoneyWise Live. I'm Rob West, your host, offering you biblical advice as you navigate your financial decisions day to day.

Think about this. As stewards of God's resources, we are the caretaker of the King of Kings funds. He's entrusted them to us.

That's a high calling. And so we want to get that right. We want to be found faithful. The good news, well, there's many, many principles we can take out of his word. In fact, 2350 verses in the Bible, 16 of the parables deal with this topic of money and possessions so that we have God's wisdom and God's heart as it relates to how we should manage our money.

Now, it's not prescriptive. It would actually be helpful if God said we're to live on 62.5% of whatever comes in the door for our lifestyle. He doesn't tell us that, so we have to work that out ourselves. The operative question then becomes, Lord, what would you have me to do? And so that involves time in prayer to say, Lord, what lifestyle have you called me to? Not necessarily how much should I give, but how much should I keep so that I can give even more perhaps when I flip that question.

And as we calculate and determine in prayer how much is enough, both for lifestyle as well as net worth, it frees us up to live with joy and freedom and contentment and ultimately to give generously and perhaps far more than you ever imagined. Well, that's what we want to do together each day here on MoneyWise Live. We'd love to hear from you and know what's on your heart and your mind today.

What questions do you have financially speaking? Give us a call, 800-525-7000. We've got about six lines open, 800-525-7000. In just a moment, we'll talk to Jamie and Pembroke Pines and Reggie in Tampa. But next up is Natalie in Chicago, Illinois, WMBI. Hi, Natalie. How can I help you?

Hi. I was calling to get some clarity in regards to student loans. I recently tried to fill out a mortgage application, and the lender said that I had like $80,000 in student loan debt, and I thought that it was at $60,000. However, I'm currently in school and it's deferred, and prior to returning back to school, I was in an income-driven program to pay it back. So recently I received a phone call from a company calling about consolidating my student loans, and I wanted to know if that is a good idea to do while I'm currently in school.

I'm about to graduate in May, so I just wanted to know if I should do that or should I just start to just pay them one at a time. I just wanted to get some clarity. Yeah.

And the fact that you said you were in an income-driven payment option tells me these are federal loans. Is that right? Yes. Okay. All right.

Very good. You know, their benefits really come down to, number one, it's just easier to manage your debt because with a loan consolidation, not a refinance but a federal loan consolidation, basically it just simplifies the repayment by giving you a single loan with just one monthly bill. It can lower your payment, but I'm not really terribly excited about that unless you have to because I want you to get these paid off as quickly as you can.

In some cases, we can string this out over 30 years or more, and I certainly don't want you to do that. If you had any variable rate loans, you could switch them to fixed interest rate loans, and you still, through the federal loan consolidation, you preserve those income-based repayment options. So if you needed that down the road or you were eligible for loan forgiveness, all of that is intact. The downside is what I mentioned, though. It can lengthen the repayment period if you extend the term. It can cause you to lose interest rate discounts or loan cancellation benefits depending upon how you do it.

And if you consolidate privately, again, you're losing those federal benefits, including the income-driven repayment. So I think the key is what can you put into your budget moving forward? What can you do to keep your lifestyle at a minimum to free up as much margin as possible, Natalie, to accomplish your goals? First and foremost would be let's get an emergency fund in place of at least three months expenses. Let's start putting some money into a retirement account, at least up to a matching portion if you have that work. And then I like really going aggressively after the student loan debt, even if that means sending above the scheduled monthly payment.

And if you're going to consolidate, I'd do the federal loan consolidation for all the reasons I mentioned, but I would try not to extend the term as a part of that. Or if you do, make your pace on what it's going to take to get it paid off in at least the time period you have now, if not sooner. And a lot of that's just going to be driven by the income that you have moving forward. Does that all make sense, though?

I know there's a lot of information there. Yes, it does make sense. So because I'm working on the emergency fund and I also have a 401K, so I am working with that. It's just slowly but surely I'm putting things in place, and I just wanted to be able to get this also under control so that it doesn't loom longer than what it needs to. So if I do a federal consolidation, I need to make sure that I don't extend the term, and if I have adjustable interest rates, I need to make them fixed.

Did I hear that correctly? That's exactly right, and if you do extend the term, just make sure you don't go with the scheduled monthly payment. Go with one higher that's going to allow you to pay it off in at least the term that you have today. But it will simplify things.

It could give you the fixed rate that you're looking for, and you're only going to have one bill. So you just keep doing what you're doing. It sounds like you're making some great decisions.

Stay on the line. I want to send you a copy of Howard Dayton's book, Your Money Counts. I think that will help you as you're getting started here to know God's way of handling money. Perhaps over the next couple of weeks you can take some time to read through it, pray through it, and make sure that you're making decisions that line up with Scripture. But it certainly sounds like you're doing that to me, and we appreciate your call today. This is MoneyWise Live biblical wisdom for your financial decisions.

We've got some lines open. 800-525-7000. By the way, if you're a part of the MoneyWise community and you'd like to support our ministry, we're listener supported, you can give quickly and safely online. MoneyWiseLive.org. Just click the donate button.

Thanks in advance. We'll be right back. Thanks for tuning in to MoneyWise Live. Have you checked out our website recently? MoneyWiseLive.org. When you create a free account, that will allow you to post to our MoneyWise community where our coaches are answering your questions all throughout the day. We have thousands of posts in there with some great dialogue going on, and it will automatically sign you up for our weekly wisdom email, which the latest installment went out today with our trending articles and podcasts. A note from me and some encouragement in your journey as a steward of God's money. Again, just head to MoneyWiseLive.org and create a free account, and that will get you connected to the MoneyWise community. All right, back to your phone calls.

800-525-7000. Reggie, I understand you're thinking about solar for your house, huh? Yeah.

I've got a couple of quotes. I get contacted also considering an electric car, the possibility of being able to run the house and the car pretty much with a zero carbon footprint. I know it's a pretty substantial investment up front, but the payback, I'm just trying to see. When the folks were talking to me about it, they were talking about the increase in value of the house and then the benefits of the free electricity that you pay off the system. It almost sounds too good to be true. The challenge, Reggie, is the payback period and how long you're going to keep your home. Most folks just don't keep their homes long enough to realize the payback out of this, if really you're just doing it to save money over time. You certainly will be able to save on your electric bill in the long run, but the biggest downside is it's just expensive. I mean, estimates for the average home run start at $15,000.

Now, there is a 26% federal tax credit for qualified systems. You've got to check that out. And they don't work for everyone depending upon the style of your home, the direction it faces and how that impacts how efficient the solar panels are.

Typically, you can get a good warranty for somewhere between 15 and 25 years, but you need to crunch the numbers just to make sure you understand what the payback is based on how you're going to pay for this, buy it outright, lease it or get a loan for the money. And then do you really think you're going to be there that long? There's a really interesting website that's free. It's actually a Google site. If you just Google Project Sunroof, you'll find Google's website for Project Sunroof, and it'll be fascinating for you.

When you key in your address, it'll pull up your home on Google Earth. You'll see a picture of your roof, and they'll analyze your home to tell you basically how many hours of usable sunlight per year your roof gets, the available square feet for solar panels. And when you put in your electric bill, it'll tell you the recommended solar installation size, how many kilowatts you need. And even at the bottom, it'll give you a breakdown of how many years it will take until the payback. Now, these are all just estimates, but it's great information, at least as one data point for you to consider this.

So I think that's really the key, is you need to understand what is my estimated net savings per year, and how many years is it going to take for me to pay this off so that I can begin enjoying the benefit, and are you going to be there that long? Does that make sense? Right. Yeah, that's the tough ones, because they were looking at a few variables to pay off between 7 and 13 years, which I thought sounded pretty good. Yeah, it does. That sounds quick to me.

I mean, a lot of times it's 15 to 20 years. Okay. All right. Yeah. So check that out. Perhaps Project Sunroof will give you another data point. Maybe you can even ask them about the information you're seeing. If they disagree, maybe they can tell you why.

But I would count the cost before you rush into this, because it can be quite expensive. We appreciate your call today. Pembroke Pines, Florida. Hi, Jamie. How can I help you, sir?

Hi, Mr. Rahm. Thanks for taking my call. A while back in 2006, I got hired in another department within Miami-Dade County, and it was a promotion. And during the 2008-2009 year, I was part-time and contributed to the Florida retirement system, but over time while at work in the lunchroom, it was saying they were going to lay us off. And the idea of leaving pension for the retirement system, pension, and going into stocks was attractive. And when I made that decision, I realized why I should have stayed in pension.

A couple of months back, which is September, beginning of October, I was talking with a coworker. He said he moved his money from pension to stocks, and I said, don't do that. Why would you do that?

He did it anyway. And upon that, I realized he earned $530,000 when he started the company in 2004, a year before I got promoted. So I'm like, I'm at $78,000. I'm like, what went wrong here? So what is your main question at this point, Jamie?

What is it you're wrestling with? Well, I was trying to figure out what should I do from this point, because it's like I'm locked in this one box inside the company that Florida retirement uses, and I'm trying to figure out what is the idea of stocks to get into and just leave it at and just hope and pray. Yeah. So essentially, you have a menu of investment options available to you to choose from. Is that right? Yeah, but it's like on the block.

If I want to do Apple, for example, if I want to do Amazon or the computer card. Yeah, but I don't think that's a bad thing, Jamie. So here's my thoughts. You really need to be properly diversified. And I realize, especially if you're feeling like you're a bit behind in your retirement savings, it can feel really attractive to go after some of these high-flying stocks that we hear about on the news or we see on the Internet, but that's not the way to invest long term.

That's going to be too volatile. You're not going to be diversified. You're going to be highly concentrated in one sector of the market, and it's going to be very speculative. The Bible describes prudent investing as steady plotting, and I think the way to go that is just to capture the broad moves of the market. You're not going to get these wild upswings, but at the same time, Jamie, you're not going to lose a bunch of money as well.

And so when we think about what it means to be a disciplined investor, we need to first of all be humble. There's nothing new under the sun. So let's be steady plotters and not chase after kind of the new flashy investment option, which these days has been the cryptocurrencies.

I'd stay away. We realize that we need to be content. We need to be diversified.

We need to be patient. So I would be looking in your 401k for either a lifestyle fund that is really tied to your age and then gets more conservative as you get closer to retirement, or use one of the indexes or several indexes to capture the broad moves of the market. Again, you're not going to get the up 20 percent in a month or two, but you're not going to get the down 20 percent in a month or two either. And the key for you is to keep your lifestyle at a minimum and then just on a disciplined basis be contributing into that account every paycheck.

And if you do that over a lifetime for the next 15 years or more till you retire, you'll have plenty of money. God bless you, buddy. And thank you for calling today.

Eight hundred five two five seven thousand. We've got a couple of lines open. We'd love to hear from you. This is Money Wise Live. We'll be right back. Thanks for tuning in to Money Wise Live. I'm Rob West, your host. Taking your calls and questions today. Got some lines open.

Eight hundred five two five seven thousand. Hey, this time of year, make sure you stay focused on the real reason for the season. It can be so easy to get swept up in all of the other things that come along this time of year, including the other expenses. And we end up buying gifts that we can't afford. And we're trying to use those gifts to buy our way into people's lives.

And you know what? We need to just step back and say, let's set a reasonable spending plan. Let's stay within that. Let's give the gift of our time. And perhaps in some cases, we need to use our gifts and talents to show people how much we care about them. We certainly don't want to get to January and have a whole mountain of debt as a result of the Christmas season. And then let's take time to focus on Jesus, the real reason for the season. And we've got some great articles on our website at MoneyWiseLive.org that can help you focus on being generous this time of year and making sure we miss out on some of the craziness.

There's an article called 25 Acts of Generosity our team has put together, and it's got some great practical ideas for how you and your family can be intentionally generous this season. Check it out when you visit MoneyWiseLive.org. All right, back to the phone. Chicago, Illinois, WMBI. Hi, Vanessa, how can I help you?

Hi, how are you? Great, thanks. I was listening to you earlier in your program and you were talking about term life insurance? Yes. And I wanted to get some information on are there different kinds of term life insurance or is the difference only in the amount that you would pay for the policy and the riders that you might get?

Yeah, that's essentially right. I mean, there are different types of term in the sense that there's renewable term, which offers you a guarantee to renew the policy after the term expires without needing to medically requalify. There's convertible term where you can convert it to whole life. There's group term, which is usually offered through an employer and typically the cheapest.

We talked about this one. There's the return of premium term, which is basically where the cost is typically doubled, but it repays the insured for the cost of some or all of the premiums if you are still living at the end of the term. Problem is it's very expensive and you don't get any credit or interest on that extra money you're sending to cover that mortality expense that they're giving up. So it really comes down to what are you looking for and I think a basic term policy that has the right number of years and recognizing that you want to get as long a term as you can, but typically folks will not hold them till the end of the term. They will replace them with a new policy. Now that obviously ensures, requires that you're still healthy to do that, but with that basic term policy, you're going to get the term insurance at the lowest cost and that will help to make sure that you can afford the amount of coverage you really need, which at a starting point is probably 10 times the income you're trying to replace and then it can go up from there if you want to try to have enough to pay off a mortgage or fund a college education or pay off other debt, that type of thing.

So I wouldn't be focused as much on the different types of term or the riders. I would just get a basic term policy for as long as you can with the amount of coverage you need with a highly rated and reputable company and then just keep that as long as you can. And then every probably five years, I would take a look at whether you can replace that policy at roughly the same amount of dollars, but extend it to a new 20 or 30 year term. And because people tend to live longer with medical advances and life expectancy continues to increase, although we've seen a slight change in that just because of the pandemic. But generally speaking, you know, life expectancy is increasing, which makes the cost of insurance less because the mortality is expenses less. And therefore, you can typically replace these policies every three to five years. And until you hit a certain age, you can generally do it without a lot of additional premium. Does that all make sense to you, Vanessa?

Yes, it does. And so I'm looking at a website now, New York Life insurance website. That's where I have a whole policy. And so they're saying convertible term. And so what they mean by that is converting it into a whole life. I'm looking at the term, the web page for term insurance.

And so they're talking about convertible. Yeah, so that just basically means with a term policy that's convertible, it has the option to convert to whole life without requalifying. But in my opinion, the better approach would be to get the term policy for your insurance coverage, your life insurance coverage, which again, is the cheapest form of life insurance, and then save outside of that insurance policy where you capture the full return of your money because you're not given part of it, you know, to the insurance company, you've got more flexibility. In terms of accessing the funds, and it's less costly, which is why I think all things being equal, unless there's some other compelling reason, I'd rather keep my investing and my savings outside of my insurance products and just focus on having a term policy that gives me the adequate coverage my family needs, if the Lord were to call me home. And one last question very quickly, I haven't asked him who has a son, he has a son who has autism, and I've been suggesting that he get a term life insurance in case he dies and, you know, to continue the child's take care of his son, because his son has extreme autism, so he won't be able to do a lot for himself. Yeah, and that may be an example of where you'd want to have a whole life policy because with a term policy, there will come a day when the end of that term comes, that that coverage runs out. But keep in mind, you know, in typical situation where there's not a medical issue, or a lifelong dependency issue, you know, once the person who's got the coverage reaches retirement, they don't need the life insurance anymore because they've got enough savings that if something were to happen to them, their spouse, you know, can be taken care of. In this case, he may want that death benefit to extend throughout his whole life, even beyond retirement, and that's where whole life could come in. So I think that is an unusual situation where it might require some additional planning.

I would encourage him to reach out to a financial planner and an insurance agent who can really help him think through what he's needing to cover his son's needs throughout the whole of his life, just to make sure everything is done properly. So Vanessa, we appreciate your call today. Thank you for listening and calling today. Circe is in Dalton, Illinois. Hi there.

How can I help? Hi, how are you today? I listen to your program every day while I'm driving. So I'm 66. I'm still working and I started drawing my social security in August. I'm trying to find a way to budget myself. I have a lot of bills. I own my home.

I don't owe anything on the home because I paid cash when I first purchased it. Great. I need to, like, stop putting aside some money for me, retirement, you know, a backup plan, you know, so I can, you know, if you can give me some ideas on how to do that. Sure. Circe, do you have a retirement plan available at work? No, because the job that I have, unfortunately, it doesn't offer anything, really.

It does not. And I've been there for 14 years. Okay. How much do you have surplus every month? Do you have anything left over after the bills are paid?

I'd say about maybe 500 or something like that. And I need to stop putting that up. I want to start adding more to put it up. I still want to put it in a savings, you know. That was going to be my next question. Do you have some savings set aside currently?

Not yet. This is what I'm saying. I have to because every time I try to put something aside, there's something that's coming up, what I need to have done around the house or my car breaking down. Well, that's really the next priority, Circe, even before you begin investing for the long term. I'd love for you to put a spending plan together, which means you really need to have a great understanding of actually what does it take every month to fund your lifestyle. That's not only the things you get a bill for, but what I'll call discretionary spending as well to make sure you understand where your money's going throughout the month.

You know, even $5 here and $10 there adds up. So let's get a good, clear understanding of everything you're spending, figure out where you need to make changes to bring your spending down so that you can free up as much margin as possible. And then I want you to save, not into a retirement account, but into a savings account until you get up to at least three months expenses. At that point, call me back and we can talk about saving for retirement. But right now, I think the emergency fund is the most important next step for you. We appreciate your call.

Raquel is in West Palm Beach, Florida. We have just about a minute left. How can I help you? Rob, thank you. I have about $20,000 of student loans left and is right now at 0%. Starting February 1st, I have to pay off that amount. My question is if I should use half of what I have for the emergency funds to pay off this loan right now and then build up my emergency funds again from that point, or should I just pay off slowly again monthly with the interest rate?

Yeah. How much do you have in emergency savings? I have $40,000, so take half of it. Okay. And you owe how much on the student loans, $20,000?

$20,000. Okay. So you could pay it off by using half of your emergency savings? Yes. You just are going to have less months for my emergency savings, but I can do that slowly again.

Sure. What are your monthly expenses, roughly? I pay off all of my expenses and I get left off like for myself like about $1,000. But what are your total expenses? If you were to total up all your expenses for a month, what would you think that would be? Oh, I spend about $67,000. We have a family of four.

I pay my mortgage and I have only a car payment that is going to be paid off in May. Okay. Yeah. So between $6,000 and $7,000, is that what you said? Yeah. Okay.

Yeah. So as long as you can keep three months expenses, which is $21,000, I'd be comfortable with that. Then you'd know you're debt-free and then take whatever you were putting toward the student loans or would be once it's out of deferment and begin building back up your emergency savings. Also make sure you're setting something aside for the long term through a retirement plan, but I think you'll have a lot of peace of mind knowing that's behind you and you've got plenty of money to do it. So I'm on board with that Raquel.

I'd say you go right ahead. Thank you for your call today. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I want to say thank you to my team today. Eric was with us.

Jim, Dan, and Amy couldn't do it without them. Thank you for being here as well. God bless you. We'll see you tomorrow. Bye-bye.