New Year, Less Debt

Did you ever hear about the guy who couldn't figure out why his credit score was so low? Every time collectors called, they said his payments were outstanding.

Hi, I'm Rob West. Having a good credit score is no joke. It keeps your money in your pocket by getting lower interest rates. I'll talk about ways you can boost your score first today, then it's on to your calls at 800-525-7000.

Call that number 24-7-800-525-7000. This is MoneyWise Live, biblical wisdom for your financial journey. We've given you some ideas in the past for raising your credit score, and I'll go over some of them again, plus give you some new ones. Now, I should say right at the start that some of these aren't recommended, but I'll mention them because it will help you understand how your credit score is determined. The first way to boost your score is to have a strategy for paying off your balances. Ideally, you pay them off in full every month, but if you can't do that, make sure you never use more than 30% of your available credit on any revolving account like a credit card. Once you go over 30%, your score begins to fall. So, if you're over that figure on a card, take steps to get below it quickly. You want to make your payment before the issuer reports to the credit bureaus each month.

You can Google to find out when that is. For example, Discover reports to all three credit bureaus, Experian, TransUnion, and Equifax, three days after your closing statement for the month. An easy way to make sure your payment is recorded, make two or more payments throughout the month.

Keeping your balances below 30% is the second most important factor making up your credit score, right after making your payments on time. And that's the next way to boost your score, by never making a late payment. If you pay late a single time, it can wipe out any gain you might make elsewhere. If you're ever more than 30 days late, call the creditor immediately and explain your situation. Ask if they'll delay reporting the late payment. They might, but there's no guarantee. Then, make the payment as soon as possible.

Here's another one we've talked about. Dispute any errors on your credit report. Get all three reports for free at AnnualCreditReport.com. If you see an error, you can dispute it at the appropriate credit bureau. Now, this might seem strange at first, but the lower your credit score, the more it will rise when you take any of these steps. And I mention that because the next strategy to improve your score involves collection agencies. If you have an account that's gone to collections, your score has probably suffered significantly and will continue to be affected for seven years. So be encouraged that dealing with collectors properly can have a big impact on your score. Obviously, if an account has gone to collections, you need to pay it off as quickly as possible. Call the collection agency and give them a plan for paying it in full or making regular and faithful monthly payments. When you've paid off the account, ask the collection agency if they'll stop reporting it to the credit bureaus. If they agreed to, and that's a big if, it will greatly improve your score.

Of course, if the collection action is in error, you need to dispute it immediately at all three credit bureaus. Now, the next few ways to boost your credit score are aimed at folks who have no or very little credit history. You can become an authorized user on someone else's credit card. For example, a parent can sign up online with the issuer to make a child an authorized user on a card. The child then gets the benefit of the parent's longer credit history and good payment record. But you can also get a secured credit card. You would put a deposit of, say, $500 on the card, and you can then use the card up to that limit.

But don't. Instead, make one small, regular purchase each month and pay off the balance in full. Your credit score will improve month by month. You can also boost your credit score by making your rent and utility payments on time.

Landlords and utilities don't usually report to the credit bureaus, but you can subscribe with a rent reporting service to have it done. Now, here are a couple of strategies that we don't recommend. First, you can raise your credit score by getting an increase in your available credit from your card issuer. That would improve your score because it lowers your credit utilization, which makes up 30% of your score. A better way to achieve the same thing is to simply pay down your balances. You could also add different kinds of accounts. For example, if you don't have a car loan, if you finance a car, your score will increase because you have a greater credit mix, which makes up another 10% of your score, but it's just not wise to take on debt to improve your score, so don't.

All right, so those are a couple of bad ways to improve your score and a lot of good ones. Your calls are next, 800-525-7000. I'm Rob West, and this is MoneyWise Live, biblical wisdom for your financial decisions.

Thanks for joining us on MoneyWise Live, biblical wisdom for your financial decisions. I'm Rob West, your host. In just a moment, we'll begin taking your calls and questions on anything financial. What's on your mind today? We'd love to hear from you.

Phone lines are open. Gabby T., waiting for your calls today, 800-525-7000. That's 800-525-7000. Whether it's saving or giving, perhaps it's your lifestyle, your spending plan, or looking toward retirement.

Maybe it's Social Security or where we started today, which was boosting your credit score. We'd love to tackle whatever you're dealing with today and help you move forward with confidence. 800-525-7000 is the number to call. Before we head to the phones, let me encourage you, if you haven't signed up for a free MoneyWise account, we'd love for you to do that quickly and easily at MoneyWiseLive.org. When you create a free account, that will ensure that you receive each Thursday our MoneyWise Weekly Wisdom email where I share a thought for the week. We have our trending articles and podcasts, relevant financial insights based on biblical truth that I think you'll find practical and enjoyable each week.

Create that account. Again, MoneyWiseLive.org. Just sign up there and that will also allow you to post to our MoneyWise community where literally thousands of questions have been posted and answered by our amazing MoneyWise coaches. It's the MoneyWise community.

It's all available right now at MoneyWiseLive.org. All right, let's head to the phones today. We're going to begin in New Mexico.

Rio Rancho. Hi, Denise. Thank you for calling. How can I help? Hi, thank you. Thank you for being willing to answer some questions.

I like helping out my friends. I have a question for her that I couldn't answer. She is trying to build her credit and she was able to get a credit card. I thought it's best to pay off credit cards each month, but she thought maybe continuing to have a balance. So I just didn't know which way is best to build your credit and what to say about it.

You know, that's a popular misconception, Denise. There really is no benefit from keeping a balance on a credit card. So I would encourage your friend to pay off that balance in full every month. Now, what is helpful is to have an on-time payment recorded, which means that you have transactions that are flowing through. But I would only use the credit card for budgeted items, things you've planned to spend money on in your plan, in your budget.

And then I would pay that off in full because here's the key. Next to having that interaction and that on-time payment, the next biggest item to improve your credit score is to keep your balances below 30% of your limit, which is called your credit utilization. Even better than 30% is less than 10%.

So if you're at zero, that's the best case scenario. Now, the only consideration there is something I mentioned at the top of the program, and that is when you pay it off. Because what you need to know is, if you're running up against that 30% utilization ratio, even if you're paying it off in full, but if you're charging more than 30% of your limit on a monthly basis and your payment isn't recorded until after the balances are reported to the Bureau, it will appear as though you have more than 30% that's on the card, even though it's paid off three days later. So I think if you're running up near that 30% threshold, perhaps consider getting in your payment a little earlier so that balance is at zero or close to it when it's reported to the Bureau. But bottom line to get to your question, Denise, tell your friend, no benefit whatsoever from keeping a balance. So let's get those cards paid off in full every month. Let's not pay a dime of interest.

And again, only use them for budgeted items. Does that clear it up? It does. Thank you. I love helping people. I'm a home birth midwife, so that's just kind of my help. Well, that's great.

Perhaps you should consider becoming one of our Money Wise coaches at some point down the road. Sounds like you have a passion for this area. Thank you for listening and calling today, Denise. God bless you.

On to Illinois. Hi, Dick. Thanks for calling.

How can I help you, sir? Well, I thank you for taking the call. I have for many years saved money before I purchased a car. I don't like paying the interest on it. Anyway, over the last several years, I've saved enough for my next vehicle, which I'm not in dire need of, but would like to buy a new vehicle.

As you know, probably there aren't many out there to really pick from right now. And so I have over $40,000 for the next vehicle pushed away into a passbook savings account, where it's getting basically nothing as far as interest. Would you have any suggestions what to do temporarily with an amount of money like that, knowing that I already have a need to use it whenever cars are available?

Yeah, well, that's going to be the challenge because I do agree with you. It's a challenging time to be in the market for a car. Supply constraints as a result of predominantly the shortage in the chips that are needed to make new cars has resulted in inflation that's beyond the norm in not only new car prices, but that's then trickled down to the used car market as well, which that lack of inventory has created elevated prices. In fact, Robert Sutherland, who's helping us with research today, just told me the cost of the average used car just hit $30,000, which is amazing and unfortunate.

Hopefully, we will see a normalization of the car market here in the next six months or so. But to your point, you want to get that money working for you, and where do you do it? I think the challenge you've got, Dick, is the time horizon on this. If you're looking at using this money in less than five years, in your case, it sounds like you're hoping it'll be even less than a year, you don't want to take any risk with it. The key for you is not the return on your money, but the return of your money. You want to keep it safe.

You want it to be liquid. So when that car rolls around that you're ready to buy, that's the right price that fits your budget, you've got the money to do that. You don't want to find yourself in a situation where all of a sudden, we're in a correction in the market, and let's say the market's down 10%.

It very well could be in a very short period of time. Now, that's okay if you've got a long time horizon, but if you don't, that could be problematic. So I think for you, you need to be looking at just a high-yield savings account. With FDIC insurance, it's only going to be paying about a one-half of 1%, but that's okay, because again, we're not looking to make a bunch of money.

And I think the inflation, the rise in car prices has already gotten ahead of itself, so I think the next move is to level off and come down, so it's not like you're losing purchasing power at least in the near term. So I'd head to either Marcus, Capital One 360, or Ally Bank. Any one of those will give you a savings account that you can link to your checking. There'll be no fees. You'll get a good interest rate, relatively speaking, and you'll have access to that money when you need it. Does that sound good? Okay, well, no, that does.

It puts my mind at ease because I thought maybe there was something I could do better than what I'm currently doing, but I appreciate your helping me out there. Yeah, I definitely wouldn't put it all in cryptocurrencies or Tesla, despite what your brother-in-law might be telling you. No, I'm just kidding. But yeah, investing is out of the question. The time horizon just doesn't match, so we appreciate your call today, Dick. We've got, let me count them, two lines open, maybe ones for you, 800-525-7000. That's 800-525-7000. Let us help you apply biblical truth to your financial questions.

I'm Rob West. This is MoneyWise Live, and we'll be right back. We're delighted to have you along with us today on MoneyWise Live, biblical wisdom for your financial decisions. We've got a line open perhaps for you on your financial question today, 800-525-7000. Before we head back to the phones, you know, here at the start of a new year, a lot of folks are thinking about, how do I get on God's plan for my finances?

How do I pay down debt and live within my means? And maybe this is the year I start and implement that spending plan and start to rein in my spending to make sure that the story that my spending is telling is reflective of what's most important to me, that I'm accomplishing my goals, that I'm giving every dollar a name, not allowing it to slip through my hands into who knows what. Well, perhaps a spending plan is in order for you, and that's where the MoneyWise app comes in. We spent years with a team of developers building what I believe is the very best money management system out there today, and it's chock full of biblical wisdom to support and encourage you along the way.

It employs the latest technology and security so you can download your transactions and use the digital envelope system and track your spending with custom envelopes and smart intelligence that automatically categorizes each transaction for you. You can maximize that with a pro subscription to the MoneyWise app. And good news is, right here at the start of the year, we have an incredible limited time offer available for you to get MoneyWise Pro at the lowest price point it's ever been offered. So to learn more, just head to MoneyWise.org slash pro. There's a 14-day trial where you can put it through the paces, make sure it's going to work for you.

Again, MoneyWise.org slash pro. And we'll look forward to hearing from you as you jump in. All right, let's head back to the phones today.

Spokane, Washington. Hi, Derek. How can I help you, sir? Good. How are you?

Um, thanks to the Lord to be with you. Um, I had a question. So my question is that, cause I'm, I'm, I'm trying to, you know, this new year after COVID and just trying to make it little by little scrimping by, um, you know, rent got high, uh, because of the new year. Um, I guess the moratorium went up and people know not paying their rent.

So we're stuck paying their share that wasn't paid. So, you know, rent went up. And so now I'm, I'm in this dilemma of trying to save money to invest. And prior to, before the year of the, uh, last year, I'm sorry. Um, we were trying to, me and my wife were trying to save money to invest it in, perhaps moving out of the apartment complex and move to a more housing.

I'm a better house. So in this situation, I'm just having trouble to be able to, you know, utilize any part of my investment. And because of, because of all that's going on now, I might have to dip into my savings and my, my other, um, investment account.

So what should I do? Yeah. And specifically related to what, Derek, I know you had mentioned to my producer student loans.

Are you wondering how to approach that or are you asking a question more general? More general, um, the, the student loans thing is I had to do another administrator forbearance. Basically, uh, you know, Joe Biden had that, had that plan where, um, I think he's going to suspend student loan payments out for a while. So that helped out a little bit.

Yes. Well, yeah, you're right. On December 22nd, the U S D O E, uh, extended the emergency relief for student loans, which includes a suspension of student loans, a 0% interest rate.

They stopped collections on defaulted loans. So, uh, you know, that does provide some relief. Um, so I think the key for you, you know, whenever we're in a tight spot, uh, just like you're in right now, and we all go through these is to, first of all, begin to record all of your expenses.

Maybe you've done this, if you haven't, you need to start there. So you understand exactly what's going out on a monthly basis. And, you know, I like to put in place, what's called a mayday budget where we deal with the most important priorities. We've got to keep the mortgage or the rent paid. We've got to keep food on the table. We've got to keep the utilities on and we've got to keep the, you know, gas in the car and the car paid so you can get to work and everything else is kind of on the table at that point where we go in and we look at what can we cut and maybe start with those big four and then rebuild the budget from there with only the things that are absolutely necessary.

And I'd be looking at what can I, uh, you know, eliminate, um, you know, what can be sold in terms of assets and let's get that to the bare minimum. Then once we get to a budget that balances, even if we're taking advantage of things like forbearance on the student loans, we then look at how do we control the flow of money for whatever it is that remains in the budget. And I think whether to paper system or the MoneyWise app, which hold on when you're done here today and I'd be happy to give you a pro subscription as our gift so you can get that set up inside the MoneyWise app. But I think the key is having a system to control the flow of money in and out. And then we need to look at priorities in terms of the priorities for any surplus above, you know, what your required expenses are.

I would start with getting at least $1,500 in an emergency fund, which is what you'll fall back on. And then we can kind of, you know, move down the line from there, whether that's, you know, beginning or a re starting your payments to your student loans whenever you're available or saving for, you know, moving to your next home, whatever that might be. But tell me what questions you have other than just kind of how I would approach getting started here. What do you call another question?

I mean, as an in general. Yeah, I just want to, you know, after I laid out that thought on where you might go from here, what questions does that spark in your mind? And was there something specific that I didn't address?

The only thing specific that I sort of related to, you know, such a general question was, I mean, cause you laid it out pretty well. And, and that's kind of something that I'm doing right now. Uh, you know, I have a, I have a, my computer has, uh, has established a system, a system for, for where the money gets going, sort of like the traffic and keeping track of all my finances. I keep my receipts. Um, just last week, uh, we went to, we went to go food shopping for him for the week's dinner. We, we sorta, I sort of maintain having the receipts all together. And then I, I started like circle all the, uh, all the cheap, cheap meals that we could, you know, do as far as like being frugal with our, and I think we, we ended up paying for as far as groceries out less than a hundred dollars. Um, so it was like $50 each on both end, me and my wife, and we were able to afford dinner for two weeks, um, just by doing that.

But, um, what, what am I related to question to the, such a general, a specific question for such a related, uh, general question. Um, what about as far as my, um, I know where you, you taught, you touched a little bit credit score. Um, I think just like you said, if I, if I can reduce my credit score, if I can reduce it, I mean, I could have a good credit score. It would assist me 30% more, um, which would have helped me a lot with my, uh, with getting a house. I, you know, I suppose so, you know, with the lower interest, then it gives me, it could give me like a boost or a jumpstart. So how would I be able to get a credit card if I have like a, uh, let's say a very low credit score, you know, cause sometimes. Well, I agree having a good credit score will help you down the road.

That's not the most important thing right now, but it is a factor. Uh, using a secured credit card would be the way to go on that. Derek, just go into your bank. You can put a couple of hundred dollars on deposit. They'll give you a limit up to that amount. Then start charging a very small budgeted item every month and pay it off in full. And that on-time payment will help you reestablish credit on cutting your grocery bill.

Check out my friend, Crystal Payne at money saving mom.com money saving mom.com. She's got some great ideas. Thanks for your call. We'll be right back. Stay with us. Thanks for tuning into MoneyWise Live.

I'm Rob West, your host. This is biblical wisdom for your financial decisions. Hey, thanks so much to so many of you who supported the ministry of MoneyWise Live and MoneyWise Media at the end of the year. We were asking you to come in with your support. If you're a part of the MoneyWise community to help us meet some year end giving goals and to be able to plan for 2022 and all of the ministry activities. So many of you a part of that, let me just say thank you on behalf of our team.

If you weren't able to get in on that, I would tell you there's still time. We always can use your support as a listener supported ministry. The quickest and easiest way to give is online. Just head to moneywiselive.org and click the donate button.

You'll also find a phone number and a physical mailing address if that's what you're looking for. Again moneywiselive.org slash donate and thank you to so many of you who are supporting this ministry. We are incredibly grateful. Every line full, we'll get to as many calls as we can today.

Next is Oswego Illinois WMBI. Hi Amy, how can I help you? I am just wondering how does an, I don't want to say an average person, but you know a middle aged person save for retirement if you've never saved for retirement? Yeah, I can totally understand your question and you know a lot of folks are in that difficult spot where they've just had more expense than they know what to do with and they have often delayed or just neglected to save for the long term because of the tyranny of the urgent from a financial standpoint. And I think the key to that Amy is just to recognize that and say, you know what, we wish we would have started sooner, but we haven't. But we're going to do what we can from this point forward to live well within God's provision to limit our lifestyle, live frugally so we can create more margin that's going to allow us to save for the future. And then once we do that, and that's hard work, I don't want to minimize that where you have to go back to the spending plan and make some hard decisions on what to cut and in some cases it may be as simple as just trimming some expenses that aren't too difficult. In other cases, it may be a major decision like downsizing and selling a home or going down to one car, whatever that might look like.

But then you've got to figure out where you put that excess. And once you have an emergency fund that's funded, and I would say that's three months expenses, and once you've paid off at the very least all of your credit card debt if you have any, then I'd be looking to put as much as you can away toward retirement. If you're playing catch up, I'd be looking at 15% or more getting into a retirement plan, and we'd like to do that if possible in a tax-deferred environment. So I would look first at a company-sponsored 401k or 403b if you have one. If you're self-employed, you could look at a SEP IRA. In either case, you could also supplement that with a Roth IRA or a traditional IRA to be able to put more money away on a tax-favored basis. But the key is going to be just start where you can, and that's going to involve you living modestly, cutting expenses so you've got the money to set aside. And if you do that for the next 10 years, and perhaps then if you're debt-free when you're entering retirement, the savings that you're able to put away, plus Social Security, plus perhaps some part-time work beyond maybe the period where you're working full-time, all of that together hopefully will allow you to continue to fund your lifestyle. And if at some point you all can't work any longer, you've got the assets to support you.

But tell me what specific questions you have based on that answer. So are you saying that if we've accrued debt, and mind you, we don't grocery shop every week, we just get milk and bread here and there. So are you saying we've consolidated our debt, and we just pay one fee there, and we pay our insurance, like our health insurance and our mortgage, and our car payment and things like that.

So our monthly income or our output is, our debt-to-ratio of course is more than of course what we bring in. So my question to you I guess is, are you saying get rid of the debt, the credit card debt first before we put away for our retirement, or are you saying do both at one time? Yeah, I mean if you, you mentioned a consolidation loan, so that changes it a little bit. I would probably encourage you not to get the consolidation loan and really focus on paying off the credit card debt. Here's the reason why you'd want to do that, is the interest rates attached to that debt, if it's credit card debt, is far greater than what you're going to get even in your retirement accounts. So it just doesn't make sense to be funding a retirement account when you're paying 16-17% on credit cards. It'd be better to go and get out from under that debt and then really focus with all the margin that you have on saving for the future.

Now you've got this consolidation loan, the interest rate is down a little bit lower, you've maybe extended the term a bit longer, that's where you're going to have to decide, do you continue waiting several years to start funding your retirement given this consolidation loan, and I think that's a little more tricky. What do you owe on this one debt that you have that is the roll-up of what you had previously? $23,000. Okay, and what's the interest rate? 23%.

Oh well, yeah. And how much are you putting toward that on a monthly basis? $800. Alright, and on the current plan, do you know how quickly it gets paid off?

I think they said it'll take two years. Okay. Yeah, I would focus on that with everything that you have. I mean, there's no reason you're going to be wanting to put money into the stock market when you're paying 23% on $23,000.

That just doesn't make any sense. You may want to check with our friends at ChristianCreditCounselors.org to see if they can help you get that interest rate reduced so you can pay it off a little bit quicker. Again, ChristianCreditCounselors.org. But until that's paid off, Amy, that's going to be my singular focus. Let's try to eliminate as many expenses as we can. Let's see if you can even get that $800 a month up to $1,000 or more because that's a lot of interest that we're paying.

But as soon as that's gone, let's redirect every bit of that into long-term retirement savings. And again, check with ChristianCreditCounselors.org to see if they can help. And if you have other questions along the way, and certainly once you get it paid off, give us a call back and we'll help you move forward from here. We appreciate your call today and all the best in the days ahead.

Minerva, Ohio. Hi, Neal. How can I help you, sir? Hello, Rob. Thank you for taking my call.

Yeah, go right ahead. My question is, my understanding from listening to you is that every year that you delay taking your Social Security, it increases by, I don't recall the amount, it's around 8% or so. That's right. So my question is, what I don't want to do is I don't want to start taking my Social Security and find out if I had waited one more month, it would have gone up 8% for the rest of my life. So the question is, is that one year calendar year or is it anniversary year? Well, it doesn't happen all at once though.

So here's some good news, Neal. You actually get two-thirds of 1% for each month you delay after your birthday month, which happens to total up to 8% for each full year you wait until age 70. And the clock starts ticking the month you reach full retirement age. So every month you wait, you're going to get that two-thirds of 1%.

It's not like you get all 8% each anniversary. Does that make sense? That makes perfect sense. Thank you. Okay, Neal, we appreciate your call today.

All the best to you in this exciting season of life. Folks, this is MoneyWise Live, where we recognize God owns it all. We're stewards.

Money is a tool to accomplish his purposes. We want to help you do that with purpose and passion. We'll take more of your calls just around the corner.

Don't go anywhere. We'll be right back. Thanks for tuning into MoneyWise Live, biblical wisdom for your financial decisions. As we begin a new year together in community, we want to explore the scriptures and apply God's truth, which is timeless and always relevant.

It's never going to change. We want to apply that to the decisions we're making each day as we manage God's money. That's right.

It's all his. And here's the key. The way we spend it is the clearest reflection of what's important to us. You remember Jesus said, where your treasure is, there your heart will be also. Our heart follows our money. Well, where is your heart based on where you're spending your money? And perhaps this is the year to say, I want to realign some of my spending as I define my lifestyle and as I give and as I save and as I pay back what I owe. Well, let's do that together.

You can join our MoneyWise community online at MoneyWiseLive.org where decisions are being posted and answers are being given by our MoneyWise coaches. Or we can do that together each day here on the radio. Let's head back to the phones.

Huntington, Indiana. Shareena, how can I help you? Hi, Rob. So this is the first time I've ever called. I think the second time I've heard you.

I listen to bot radio all the time. So my question that I have is my husband is military and he's a postal worker. So he's working on two retirements. We are looking to eventually, you know, end up having a family. I'm in my early thirties.

He's in his late thirties. And so my thing is, if I continue work, is there really any point in me doing a retirement savings with him having both of those? Or would I be better to use those finances to pay off as much as possible so that I could end up being a stay-at-home mom to take care of the kids? Yes.

Well, it's a great decision. And both of those would give excellent pensions, both the military and the post office. So it would be important to understand those. The risk is if something happens to him and he's not served or put in enough years to earn those, there would be obviously some survivor's benefits. But you'd want to understand the implications of that if you're relying solely on those two pensions.

But because there should be quite a bit there and you'd want to understand that and what you can expect and how many years he needs to put in to earn those and obviously life insurance until he's at least qualified for enough years to receive both pensions in full so that that death benefit would pay out what you need to then sustain yourself and convert to an income stream for the rest of your life. If all of that's been done, then I like what you're saying here because if you have a conviction to be able to stay at home, I think that's great. Having a modest lifestyle, living debt-free to the best you can, being able to save for other expenses that are going to come down the road.

Kids are going to add quite a bit of expense and being able to replace cars without financing, being able to pay off a mortgage sooner rather than later. I think all of those things are great and so if you were to perhaps take your income and focus on those priorities so that you can be able when God provides to be able to stay at home, I think that's great. So I think you've got a great plan here. You're thinking about it properly so long as you've offset any risk of the Lord taking him home prior to one we might expect.

Does that make sense? Yeah. I was going to say, he's got three years left in the military to where he could retire. So that's kind of some of the reason why we were starting to look at it.

He's actually wanting to stay a little bit longer to where he can retire as an officer instead of an enlisted. So we were talking about paying everything off and I know I've listened to Dave Ramsey's stuff on trying to pay things off to like really, really early and I know it's possible to pay off a mortgage in like two years of like a $90,000 home. So I know our home is a little bit more expensive than that but I figure if we were to really solely focus on that for five years, I was just wondering how much of a detrimental that could cause towards like my retirement side.

Yeah. Well, I think that's great. As long as you understand what he's going to be getting and that syncs up with the lifestyle you'd like to maintain in retirement, then I think that's fabulous because let's treat your income now as something we don't want to rely on so that when you're ready to stay at home and the Lord provides that opportunity, you're able to do that. But in the meantime, let's focus really solely on you all getting out of debt.

If you could get that house paid off, if you could get any other debt paid off and other goals that you have in the near term through your income alone given he's going to have a robust retirement, especially if he stays in and to receive officer status. I like that plan, Sharina. I think you're thinking really well. Okay. Thank you very much. I appreciate your time. All right. God bless you. All the best to you in the days ahead. Thank you for listening and calling.

Chattanooga, Tennessee. Hi, Tyler. How can I help you? Hey, thank you so much for taking my call. Hey, my question is regarding where Jesus commands in Matthew 542, give to the one who begs from you and do not turn away from the one who would borrow from you. So I guess my question is, is how do you plan for that? And, you know, while being a good steward of what God has blessed you with, how do you also be obedient to what Jesus says to do there to see what that looks like with you?

Yeah, yeah. Well, here's the really cool thing, Tyler, is that the Lord leaves that up to each of us. He says, I'm going to entrust to you provision.

And out of that, I want you to be generous. You know, a lot of times we start with providing for our families. And it's interesting if we look at the Council of Scripture, you know, we'll see very clearly that the primary reason he gives to us is so that we can share with others in need and yes, to provide for our families and oh, by the way, based on 1 Timothy, to enjoy what he's given us as well.

But he leaves to each of us to decide what that means for us. What is our lifestyle? You know, do we follow the model of, you know, others who have done a reverse tithe where they tried to live on 10 percent and give away 90 percent? Well, that works for some.

Others say, I'm just not there yet. You know, I think you've got to define your lifestyle and that's really what it all comes down to. What are you going to spend on your lifestyle? What do you want to be able to give, starting with your local church and being able to give systematically and in proportion to your income? And by living modestly and having margin, it then gives you the flexibility and freedom to follow the leading of the Lord to give beyond the tithe, which my friend and the author Randy Alcorn calls the training wheels of giving. And so now we're starting to give to those causes and issues and people that God has placed on our heart. Well, unless we live within our means and live modestly, we don't even have the option to do that. And so I think it starts on your knees to say, what would we like to be able to do? And then each year let's build a plan to do that. And perhaps every year let's look to increase what's available, which means over time we're capping our lifestyle. So as income increases, we're not allowing lifestyle creep to occur, but we're giving more and we give beyond the base that we established from the last year. And then we're asking the Lord and the Holy Spirit to reveal to us where we should be giving and who are the people that are in need and what are the causes and ministries that are on our heart that align with our passions and where God is moving that we want to give to as well.

So I would spend some time, you and your wife praying about it, asking the Lord to make that clear, and then do the hard work in your budget, in your plan, so that the money is available for you to follow the leading of the Lord. And then report back to us how it's going. Tyler, thank you for your call today. Let's head to another Tyler in Iowa, I believe.

Tyler, go right ahead. Yeah, thanks for taking my call. I'm finishing a nursing degree and a lot of hospitals are offering pretty big sign-on bonuses like, you know, five or even ten thousand dollars. And I was curious if those are taxed differently than regular income and what you would recommend planning on how to use that.

Yeah, very good. Well, it's a great question. And you're right, we're seeing a lot of sign-on bonuses, especially in industries where there's a lot of competition. You know, bonuses are subject to income taxes. They don't simply get added to your income and taxed at your top marginal rate. So your bonus counts as supplemental income and is subject to federal withholding at a 22% flat rate. Also, you'll have to check on state taxes as well.

The withholding rate will vary depending upon your state. So you want to plan for the tax side, which is a good thing that you're thinking about that. But in terms of how to use the money, you know, I would look at it, depending on what your goals are, as not money that just gets kind of thrown into the general pool of lifestyle spending.

But how can I use that to accomplish a goal? Maybe it's shoring up an emergency fund. Maybe it's eliminating some debt that's going to eliminate a monthly payment. Maybe it's saving for that next car purchase that's going to happen in cash. Maybe it's a down payment on a house that you're looking toward.

So I'd look at it, again, aligning it with your values and priorities, not just dropping it into checking where it gets consumed by lifestyle spending. And listen, all the best to you in the days ahead. I hope you find what God has for you for your next job. We're going to finish today in Nashville, Tennessee, WMBW.

Hi, Gene, thank you for your patience, and how can I help? Hi, I was wondering, as a senior, should we tithe on our Social Security if we've already been tithing gross when we were working? Yeah, it's a great question, Gene, and it's a legitimate question asked by people who are good-hearted, wanting to honor the Lord like yourself and do the right thing. I don't think there's necessarily a right or wrong answer there.

I'll tell you personally what I think. I don't try to drill down and try to estimate on how much is considered an increase, because remember, when we give, if we're giving a tithe based on that principle that we see in Scripture, it's based on our increase. So the provision that comes into us that's the increase over and above what we had originally. So the question would be, do we try to drill down on how much is increase, how much is return of capital that we've already put in? Well, in the farming economy of the biblical times, they didn't subtract the amount of the wheat they had planted in computing the tithe.

They tithed on the whole increase. So I would just look at this as a gracious gift from the Lord, regardless of what I've invested, and remember that giving is about nurturing a closer relationship with Christ, by loving Him for His provision. It's an act of worship.

It's an expression of our thankfulness and obedience. And here's the thing, just as my friend Robert Sutherland said to me in the break a few moments ago, when we shovel it out, God always has a bigger shovel coming back this way. That may not always be financial, but we're going to experience His blessing when we're living within His will. Gene, all the best to you as you pray through that decision. We appreciate your call today. Folks that's going to do it for us.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Thank you to Amy, to Robert, to Dan, and to Gabby T. Thank you for being here as well. Come back and join us tomorrow. I'll be here and we'll see you then. God bless you. Bye-bye.