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Financial Ed for Kids

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
January 13, 2022 5:32 pm

Financial Ed for Kids

MoneyWise / Rob West and Steve Moore

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January 13, 2022 5:32 pm

We all want our children to be pure and upright in their walk with Christ and that certainly includes how they manage money. On today's MoneyWise Live, host Rob West will talk about some ways you can educate your kids on finances and help them learn to manage money biblically. Then he’ll answer your calls and questions on various financial topics. 

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2011 Marines. Even a child makes himself known by his acts by whether his conduct is pure and upright fibroblast. Of course we all want our children to be pure, upright in their walk with Christ and that certainly includes how they manage money talk about some ways you can help them do that, but it's on your calls at 800-525-7000 800-525-7000. This is moneywise live with your financial after sharing the gospel with your children. One of the most valuable gifts you can give them is teaching them God's financial principles that will positively impact so many areas of their lives. Children need to learn that you work hard for the money that supports the family that you're not an ATM machine with unlimited funds they need to work as well to receive material rewards and the satisfaction that comes with doing a job well they need to learn how to budget and spend carefully because there's never enough money to do or buy everything we want. They need to learn how to save not just for rewards but to cover unexpected things just like you do with your emergency fund. And most importantly they need to learn how to give to be generous to God's kingdom because he is their ultimate provider as he is yours as well. A recent article by the humble dollar a secular website caught my because it lists five strategies for teaching wines money management to children. It was also interesting because all of these ideas can be found on the moneywise website in various places. So let's start with the first strategy share the big picture with your kids. Now that doesn't mean showing them how much you make and giving them a copy of your 1040 but you can share many of your expenses with them so they get an idea of how expensive things are and what it takes to provide show them your mortgage and car payments in your weekly grocery costs. You might also show them your retirement account statement that can give them a sense of how important it is to save for the future and how much time and effort it takes to build up a nest egg managing credit wisely is another extremely valuable lesson for older children when they had off to college. They'll be inundated with credit card offers far too often they fall victim to this and run a consumer debt on top of any loans taken out for education. A better strategy is to teach them about credit before they reach college age. That way you can monitor them. You could make them authorized users on your credit card but a better way might be to open a secured credit card account for your team. Several issuers offer them if you're unfamiliar with a secured credit card. It works like this, you deposit a certain amount with the issuer save 300 or $500. You can then use the card up to that limit, but no more. Of course you don't want your team to do that they need to learn to pay off the balance each month out of their earnings. Which brings us to allowances. The article I mentioned actually recommend setting up a three jar system for holding allowance and gift money. The kids receive one jar for saving one for spending and one forgiving.

Well, we couldn't agree more, but will take it a step further.

Have your children put some of their money in the collection plate each Sunday. The earlier you teach them to be generous to their church systematically the better. Another valuable lesson for kids is that they'll have to pay taxes and maybe sooner than later. If your team has a job. The employer may withhold taxes. That means the child will have to file a return, even though they may not have to pay taxes, you would probably use the 1040 EZ form, but filing it with your child would be an eye-opening experience, especially if taxes are owed but impress on your child the importance of being scrupulously honest about money owed to the government. Romans 13, six or seven reads for because of this you also pay taxes, for the authorities are ministers of God attending to this very thing pay to all what is owed to taxes to whom taxes are owed revenue to whom revenue is owed respect to whom respect is owed honor to whom is the last money lesson for your kids involves saving for and buying major purchases. This is a great way to teach budgeting younger kids may want a special toy. Teams may want a cell phone or even a car help them set a face-saving plan where they are at least providing some portion of the money needed for the purchase. The percentage isn't important.

Figure out what's best for your situation. The main thing is have the child participate in the purchase their own money. Well, we hope you found these ideas helpful. Remember the earlier you start teaching kids how to handle money wisely.

Your calls or next year's number 800-525-7000 Rob Weston. This is moneywise live with his moneywise, blister lines open today will be taking your calls and questions in just a moment.

Here's an article 800-525-7000. That's 800-525-7000 whatever is on your mind today we'd love to hear from you. Of course, financially speaking, we began today by talking about money in kids and let me just_our opening topic in terms of the importance of preparing our future adults to handle money wisely. And that's not only just making sure there financially literate. Understanding the importance of having a spending plan and how to put that together.

Understanding how compound interest works and why it's important to avoid debt understand the compounding force of long-term dollar cost averaging, and why we should start early, when it comes to investing, the value of hard work and limited resources. All of those things are key but I think what's even more important than that is really understanding God's heart as it relates to our money and training our kids to recognize God owns it all and where managers of God's resources and therefore money becomes a tool and that money can be a competitor to the Lord for first position in our lives and talking about what that looks like with greed and the comparison trap, and especially as it's fueled by social media with younger generations will we compare ourselves to the best version of somebody else's life on social media. Well, it can lead to a lack of contentment that can lead to comparison and envy that results in overspending beyond her means to maintain the appearance of a lifestyle that we can afford when in fact we can all of these things are really important to talk about very early on and as you think about that. Perhaps you can apply the principles that are former host Howard and talked about what he said we should be MVP parents him standing for modeling model. These ideas in your daily life. The fact that you are operating on a spending plan talk about that for our kids. We exit during the eating out budget over to them one month and had fun watching them wrestle around the kitchen table, not physically fit as they negotiated how they were going to spend that for the family and trading off the lunch out after church for a Friday night dinner out and it was fun for them to understand that the resources weren't unlimited and so if they were going to live within our budget. They were to have to think strategically about that will that's when we can model it G stands for verbal communication. We should be talking about these things regularly, including the idea of generosity and how important that is. And then P stands for practical application. Let's find practical ways to allow them to experience this.

When the ready. That could look like opening a checking account in managing a debit card and early on it skip same spend with clear jars, but throughout the whole of their childhood. We need to be training them and getting them prepared to be adults and manage money wisely and the fruit of that is still be able to experience God's best be connected to his work through generosity and hopefully have marital harmony as it relates to this area of money it's so important.

All right.

Let's take some your calls today.

What's on your mind is it to investing your saving getting out of debt, perhaps at your credit score. Whatever it is, give us a call. We got some lines open and Hans waiting to take your call today. Here's the number 800-525-7000. That's 800-525-7000. Let's head to Ohio to begin with J thank you for calling. How can I help you hello. My question here. I seen commercials on TV that you have life insurance policy that you no longer want, need, or can afford whatever like that that was yeah you know typically there's a couple of the forms of this one of the move more common would be what's called a viatical settlement that this is a very specific type of settlement or where you're selling your policy and it's where somebody relinquishes the right to receive the death benefit as a beneficiary and they sell their policy at a discount from its face value, but a viatical settlement really is for those who are terminal where there terminally or chronically ill and they would be within an expected two years of the end of their life just based on again that terminal illness and so typically what happens is they need the cash to provide for their medical expenses or end-of-life expenses, and so they want to go ahead and get the advance on that money and they're willing to take a discount, the purchaser of that viatical settlement is obviously counting on the internal rate of return based on the day they bided a discount in the date of death that which they'd miss it which time they received the full death benefit if it goes longer than that to year. Where there's not a health crisis involved.

You still can sell an insurance policy to get cash that's typically referred to as a life settlement and the it's, you know there are other options to look at that would be better than that. Even though this is legitimate you want to.

If you want to access some of the cash value you could.

You can look at that option while still keeping the policy in force for beneficiaries in might also be possible to use the cash value as security for a loan from for a financial institution, but typically for most people selling insurance policies is not something I would be looking at for the average person of Lester's extenuating circumstances I would be looking specifically at the cash value and at the very least, I would just be canceling the policy if it's not needed so you can recapture that premium back into your budget on a monthly basis. Does it make sense to thank you, that's a curious but knowing that may not work but you have cleared things up for me and I read it. You are very welcome.

Thanks for listening and for calling today hundred 525-7000 as a number to call to Tennessee hi Alex, how can I help you make you a question about 401(k) profit.

I currently have a 401(k) lawyer and I know on a rock you actually act as upfront as you go get distribution lot. You don't have to do that but I would think that a 401(k) would grow faster that not the truth or actually come out to be more let willing are you seeing the disaster growth.

What is your Kenyan on well whatever went out or look. I had a pretty and I were saying. Regardless of which route it to the same tired, your anger packet upfront account.

I would 401(k) with grout those that are you thinking right there, so the growth really has to do with the investments inside the account.

So if all things were equal in the Roth had the same investments as the 401(k) they would grow with the same rate but you are correct in the sense that when you put in Roth money because you are paying the tax upfront if you put in the same amount, you know, you would obviously have more in the Roth and so you know it would in effect allow you to to grow that just a little bit quicker but at the end of the day it's really about the tax treatment so you with the 401(k) money works going in your getting the tax deduction know that money then would grow and you would then pay it as it comes out as ordinary income versus the Roth were you paying the tax upfront you getting that money into the Roth and then it's growing tax-free, at which point you never pay any tax on the gain. So the opportunity is really to consider whether you are going to do better with the benefit today on the tax deduction versus the benefit later after you pay the tax now of being able to take it out tax-free. That's it parking to come down to what tax rate are you at in the future. Part of that is unknown because we don't know where tax rates are going to be. I would submit, where probably not going to see anything lower than we have today. So the logical expectation is rates are going to be higher but you also to factor in that your potentially earning less in retirement.

So your and potentially a lower bracket even though the brackets themselves may move up, so that's the unknown it's also a factor of just how long do you have for this money to grow and is it worthwhile to go ahead and pay large chunks of tax if you were to convert it to a Roth versus leaving it in the tax-deferred environment if it's Artie there because you been funding a 401(k) for a long time and then either converting it over time, or not converting it at all and just as you get into retirement going ahead and pulling out of the 401(k) as your income needs dictate present all make sense on the younger banks all night for a while longer. Like a lighter lot 28 not currently have a little over 12,000 locates you know as a young guy, though I would actually say converting it to a Roth. Now, if you have that option is a good idea. Just because you were not talking about a large sum of money, so it would be, you know, not an amount that would likely push you up into a higher bracket for that portion of the income that's taxable, but you have time on your side for this money to grow tax free and that's where the real power of the Roth comes in because as this money is growing over the next let's say you're 30 or 40 years it out. You have all that gain that is tax-free as opposed to having to pay the tax on it later. So I think in your situation. A conversion is probably something to look at just because you've got time on your side and that's really powerful when it comes to looking at the Roth IRA option so hopefully that subtlety Alex. We appreciate your calling and may the Lord bless you and folks were going to head toward a break here.

We've got lots of great questions lined up with Jeanette was to talk about credit card data in a possible home equity loan to pay it down. Phil has a 15-year-old daughter that was involved in a car accident wants to know about how to use the settlement money what to do with that Jerry has some 40,000 and a mortgage must pay it off in the next three years. She wants to get some counsel in Baghdad and perhaps your question 525-7000 takes her to excuse me, was heroes yesterday got that question stacked up your old ones are fools to sit back and enjoy. We got some great including this one were to head south to Florida where Jeanette is located Jeanette how can I help you today call out Cory $25,000 and we are trying to figure out evening will be a great idea you take an equity line of credit and use its credit card credit card along okay. What's the amount roughly 25,000 locates and what was the source of that that was a just lifestyle expenses or was there a specific event that resulted in that that were to come from.

I think because when we try out a lot of credit card because of comments outlined so we took out a loan to pay a note that now we have done long now I See You Know I'm Not a Fan of Using the Home Equity in Any Form, Whether It's a Home Equity Line of Credit or Home Equity Loan to Pay down Consumer Debt, and Here's Why. I Understand on Paper, It Might Make Some Sense Because You're Taking High Interest Debt and Your Replacing It with a Lower Interest Rate. The Problem Is That in Just about Every Case That I've Seen.

Number One, You End up Paying It Back over a Longer Period of Time Because in Getting That Lower Interest Rate. It Takes the Pressure off and Typically the Payback Period Might Be 15 Years or More and so Even Though You're at a Lower Interest Rate You're Going to End up Paying As Much or More Because of the Time. The Payback Period Is Much Longer. Number Two, You're Taking What Is Unsecured Debt That Is That If You Were to Default on They Could Get a Judgment against You. But It's Not Collateralized by a Particular Asset. If Something Were to Happen That Is Unforeseen in Your Financial Life and You Are Unable to Pay Versus You Putting This into a Home Equity Loan or Line of Credit Which Is Now Collateralized by Your Home. So in the Event You're Unable to Pay. Now Your Home Is at Risk and Has the Ability to Be Foreclosed upon Think the Other Issue and Perhaps This Is As Big Is That You We Have Credit Card Debt, Usually Because in and Let Me Say As a Caveat, It May Be Because Unforeseen Circumstances Coated the Pandemic Had Caused A Lot Of Hardship for Folks Financially Related to Their Jobs. Depending upon What Sector of the Economy Therein Eliminated Positions Hours Cut Back and It Was Really Difficult and That May Be the Extent of It. But for Most Folks Credit Card Debt Is Symptomatic of Living beyond Their Means. Consumptive Lifestyle beyond the Provision That They Have. So They're Not Living on a Budget. They Consistently Spend More Than They Have Available It Credit Card Is an Easy Place to Kind of Take All That Excess. It Builds up over Time and before You Know It You've Got More Than You Have Ever Imagined. And Then You Come in, You Pay It off with the Home Equity Line of Credit That Takes the Pressure off Makes You Feel Better, but You Haven't Treated the Underlying Problem Which Is Living beyond Your Means and so the Year from Now. You Call Me Back and Say Rob I Got This Home Equity Line of Credit. Guess What, the 20 to 25,000 Is Back and I Would Want to See That so I'd Rather You Do Want to Two Things. One Is the Snowball Method, Where You Pare Back Your Expenses As Best You Can Take Every Bit of Margin, Starting with the Smallest Balance Attack That First One Paying the Minimums on All of Them and They Go Right down the Line, but Better yet 20 to 25,000 Debt Management Program Is Probably Your Best Option.

I Contact Her Friends Are Christian Credit They Can Get Those Interest Rates Reduced to Paying One Fixed Monthly Payment and You Pay It off on Average 80% Faster through Debt Management. I Think That's by Far. Your Best Approach and the Work with You on Setting up That Spinning Is Christian Credit and Jeanette. I Think That's the Solution for Us Will Be Right for Joining Us Today and Moneywise Live on Rob West Euros.

This Is Biblical Wisdom for Your Financial Decisions. All the Lines Are Fulsome Great Questions Coming up with the Back to the Phones in Just a Minute, Did You Get a Moneywise Weekly Wisdom Email Today. If You Have a Free Moneywise Account. Check Your Inbox Is Right There Waiting for You. If Not, Had a Moneywise and Create Your Free Account so You Can Receive Our Weekly Wisdom Email Today a Note for Me on the Experts and Predictions in the Stock Market That We Talk about Some of Our Recommended Reads in There You'll See a Great Article from the National Christian Foundation on Five Common Obstacles to Generosity Article from Our Trainer on the Value of Financial Goals Are Trending Podcasts Including Our Episode from Yesterday Called the Boy Who Cried Wolf a Great Episode of Moneywise Live with Jerry Bowyer Talking about Some Folks Calling for Her Collapse in the Banking System That We We Did Address That I Had on Yesterday Was a Great Addition If You Didn't Hear It, I'd Check It out, but You Also Find Our Scripture of the Week.

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You Can Sign up Moneywise Sorry. Let's Head Back to the Phones Today Were Going to Head Next to Youngstown, Ohio Hi Phil, Thanks for Your Patience Can Help User Michael Rob Jerk yet like My Daughter. Here the Settlement Coming from an Accident and She Was in Last Year and It's Roughly about $12,000 and She Also Has a 529 Plan That Is Set up Its Currently Set up. Now, with Roughly $15,000 in Their Okay and I Guess I Was Looking for Your Advice and How to Manage This Money yet to Get I Get the Best Return for Our Investment. She's 15 Years Old yet Recognizable Okay so Very Good.

Well, so First of All, Is She Doing Okay She Have Any Ongoing Problems Related to the Accident.

No Luckily by the Grace of God. She Is Doing Well Yesterday. She Was Actually Hit Head on by a Car That Going on the off Ramp Avoiding a Police Officer so Will Not Situate Them in What the Seatbelt I Think That It Would've Been a Different Story. But There the Lord Was Looking over One by the Grace of God. That's Incredible Wealth Reason I Ask Is One Picture Number One She's Doing Okay. Number Two If There Was Any Medical Issues That You Anticipated for the Future. Obviously, Holding onto That Settlement to Take Care That Would Be Key and You Would Want to Invest It, but She's Just Fine. More Grateful to the Lord for That, Then It's a Matter of How Is the Best and Most Wise Way to Use This Money. You Mentioned a 529 and I Guess That Would Be My Question Is, Did You Have in Mind Earmarking This for Something Other Than College Because Unless She's Gonna Get Significant Scholarships Were You All Have the Ability to Step in and the Pay She's Likely Going to Need Far More Than the 15,000 She's Got Already in the 529 and That Would Be a Great Place of the Next Four Years While She's in High School for That Money to Continue to Grow, so She'd Be up to 27,000 Which Would Give Her a Great Start, At Least Depending on Where She Goes. Hopefully Cover the First Year, and Any Growth That That You Have on That Money Would Be Tax Free As Long As It Used for Qualified Educational Expenses, and of Course One of the Benefits of a Settlement Is If It's a Related to Personal Injury It's Knocking to Be Taxed so You Should Be Able to Put the Entire Settlement into the 529 so That Would Be My Recommendation. Phil, Unless You Had Some Other Specific Purpose for That Money That Was Not Related to Educational Expenses.

Yeah, Not at That Moment. I Mean, I Wouldn't Get Excited about Driving Right Now and That's You Know I'm Not There Quickly, but Maybe Take a Small Course and Then Maybe to Put It down on the Carpet, Other Than I Was Good and All of That. That's Is a Good Plan Anything That You See a Shorter-Term Time Horizon on a Good Stick That in Savings When You're Ready to Make That Car Purchase. You Got That There for the down Payment and the Rest Go and Put It into the 529. Let's Keep Growing, Albeit It Will Be Somewhat Conservative, Because You're Getting Close to Root College Year with Her Being a Freshman in High School, but Any Growth That Happens over the Next Several Years, You Know, You'd Be Able Use Tax Free, so I Think That Sounds like a Good Plan to Me. Phil, I Would Stay on the Track. Tell Your Daughter We Are so Thankful to the Lord That She's Okay and We Appreciate Your Call Today. God Bless You Sir up to Chicago, Illinois. Karen, Thanks for Your Patience.

I Can Help You Today Use Will Come to Being Intentional about Finding My Retirement a Little Late, but I Am Free with the Exception of My Mortgage and I Could Pay off My Mortgage with Three or Four Years and Am Wondering If It Would Be Tonight Managed to Do That to Work at Paying off the Mortgage and and Having No Debt. Or Would Be Tonight Managed to Really Put Much Money in Retirement Accounts That That I Have Is This Great Question Karen. A Couple Questions for You. Number One Based on What You Know Today and I Realize This May Change How Far off You Think Retirement Is a 5 Cm Okay and What Percentage of Your Income Apart from You Accelerating Your Retirement Contributions with What You Are Considering Putting toward the Mortgage. If You Didn't Do That.

What Percentage of Your Income Is Going into Retirement Right Now Right Now about 15% Okay and How Much of You Saved up to This Point, a Role As You Said You're a Bit behind but We Have Currently Probably Different, and around 200 Okay 200,000 and Have You Worked on a Retirement Budget Just to Get a Sense of What You Think Your Expenses Will Look like. Recognizing Most Folks Live on Somewhere around 70 to 80% of Their Pre-Retirement Income in Retirement Because Failure to Take That 15% Right off the Top. We Are No Longer Saving for Retirement. Then, If Your House Is Paid off. Now in the Next Three Years, but Certainly by the Time You Get to Retirement. That Would Be Great.

So Obviously Your Expenses Will Come down If You're Dropping a Life Insurance Policy or You Know Any Dependents Are off the Payroll.

Have You Looked at What You Think Your Best Estimate of What That Might Look like I Have Okay and Do You Think That with Social Security You Have a Good Sense of How Much What the Gap Is That You'll Need to Solve for with Income from Your Investments.

I Do Think That Number Is per Month Will Probably Maybe around 2000 and 2000 Okay Yeah You Know I Think the Key for You Is to Get As Much Going into Retirement. As You Can.

I Mean, You Know, If You Were Able to Build That up to 300,000 over the Next Five Years or so We Were to Look at You Pulling All to about 4% a Year. That Would Be 12,000 a Year, or about a Thousand a Month so That Would Still Leave You about $1000 a Month In Terms of You Taking an Income from This Portfolio That We Would Expect You Could Make up with an Investment Strategy That's Income Focused and Keep That Principal Intact so It Lasts throughout the Rest of Your Life so That Tells Me That We Need to Try to Accelerate This a Bit Faster so I Would If It Were Me, I Mean, Unless You Have a Real Conviction to Be Debt Free As Soon As Possible. If You Do I'd Say Go for It. Don't Look Back but If You're Comfortable with Either. I'd Probably Say Let's Prioritize Putting As Much As You Can in Retirement and Let's Make the Payoff of the Mortgage Loan This Early Three Years, but by the Time You Retire so That 5 to 7 Years and That Way When You Hit That Point in Your Life That Major Expense Is Gone, but You Been Able to Put As Much As Possible Away, Get It Working for You on a Tax-Deferred Basis in the Retirement Account so You Can Get That Income up to Talk a Bit off the Air. This Money Wisely Minimize My Glasses Is Biblical Wisdom for Your Financial Decisions.

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Oh, all right, we've got of flying a phone call is here in about 10 minutes so will get through as many as we can today. Next up is Dennis in Tennessee Dennis Karen Ed, I shall exceptionally to my question. And so I have my house I have gained about 100,000 and equity in the last years I had priced out a few days ago and I am about 25,000 in debt with I truck payment and I have 24,000 of backpackers from the IRS that something that was rectified.

The correct correct way for McAllen years ago. Nothing I can do about and I about 10,000 in credit card debt, and I'm thinking, should I just sell my house. The spring and pay all that that you know but I it's hard to buy something new because the market so high, so maybe some house and rent all the data and you now and start able to find my retirement more and more cash flow. So how gorgeous My debt over time.

You know slower and hold on about maybe ago. Yeah, that's a great question Dennis and I understand you probably would feel a lot better knowing all this was cleaned up and paid off.

Get kind of a fresh start and move from there. The only hesitancy I have with that is your rentals rent is is sky high right now because of what's happened in the housing market, the lack of inventory that the price points of where so many of our homes are not aware Tennessee you are, but if you're anywhere near Nashville or Franklin. It's even more so you know the these prices are through the roof and rental prices have followed suit because of that, so I would just want to make sure that before you did this you had a plan and you knew based on where you want to try to live and how much space you need and what you're looking to rent you understood what did Juergen have to pay to get that because it may end up being counterproductive in terms of the amount that you have to pay it so that would mean then you stay in the home and as long as you got enough income where you're able to make all the payments on the car and the IRS debt than the credit cards and stay current. Then I would be to get on a debt management program get the interest rates down on the credit cards. See if you could start taking those off one of the time.

Of course you want to stay current on whatever you've negotiated with the IRS in terms of hopefully an offer in compromise or your on monthly payment plans and then you want to keep that car payment obviously paid up and then the key will be to get a budget that balances were all those debts can be paid you're making progress on them, especially with the debt management program and the credit cards and your living within your means so you got margin to make sure you got an emergency fund so we don't ever have this debt come back giving your funding retirement and I realize there's competing priorities, limited resources, so you may be in a spot where you just don't feel like you can do all of that and you're going to have to sell the home but if you don't have to sell it and you could make it work. You know, I think that perhaps could be the better approach just given what's going on in the housing market and what you might have to pay in terms of the monthly rent to get something comparable once you sell it, so I give me your thoughts on that. Yeah, you know how high right you qualify that while I could really catch on and possibly buying another property and you know Palko my data now being an even I know it's hard like I can buy one that's not bad. I got a fixer-upper painted in and utilize. I did my home. You know that but I like your saying to where I could stay in it like equity keep building up and paid on my mortgage.

All my debt first with the snowball effect. But no, anything I learned my lesson on how I got a spot in the first place. Yes, and you will be able to build it up so yeah that's the challenge.

I think you need to do some homework. Dennis just to see because you're right. With the market being where it is. You could get top dollar, now your home. But if you're looking to them by something else you're going to pay top dollar on the next purchase. Now you could downsize. I don't know you know when a much space you have and if you find something less expensive that's appreciated on a percentage basis as much, but because it's a small piece of property, smaller parcel, you know, smaller home, fewer bedrooms or whatever it is you can then downsize and you've got some cash to take you know out the highest interest credit cards or pay off the IRS debt.

I just want to make sure you do this with a plan. And so it's renting and you know where you're going to go and you know it's gonna cost you, and you got a budget that balances if it's not renting it. It's buying something. You know what you want to go by and make sure that you can get it for the price you want and that you have actually enough left over after you buy that new property that's also sky high that you can actually accomplish some of these goals you have on the debt reduction so just make sure if you do this you know where you're going and you have a plan to get everything paid off. Otherwise, let's dial in if there's enough income to staying where you're at getting these set things paid off living on a budget and let's just see if you can make some progress over time. I don't think were in a bubble situation with the housing market certainly could cool off, but I don't see any kind of precipitous drop on the horizon or by any means just because of the continued lack of inventory silk/Lord gives wisdom on that. Dennis is you think through it, I realize it's a tough decision, but I'm confident you'll make the right one. What you do your homework. Thanks for your call today. To cut to Wheeling, Illinois in Chicago for a how can I help you. My apologies. You go right ahead. Thank you for taking my call. One year out and had a stroke half years ago I was living in Texas but I will get back I had to come to Kenya for a debated caretaker felt some land and I was banking and Franklin which was very expensive so I felt some land intact. And bought a house here in Nashville. I have a small loan on the house mortgage on land and hold the mortgage on the land and check for payment of the net 900 and My mortgage payment on the landing check for payment in Tennessee 90 to pay off now and cannot say I'm wondering if you cash to pay off not allowing a man how I should save it in reserve. Yes ma'am, I completely understand your questions got bless you for moving to Tennessee to care for your son, that's great. Would that depletes all of the reserves that you have say if you were to pay off the small loan on your home. No, what would you have how many months worth of expenses would you have left will probably pay that year the four years okay and obviously the the money that you're getting from the mortgage that you hold from Texas is awash with the mortgage so that would be additional income.

Do you you you would need that that be surplus income because I assume you're living off of Social Security is that right I okay so this would be an extra 900 a month so you have four years left of reserves plus an extra 900 a month for the mortgage that you hold in Texas and you wouldn't really need any of that because that would be surplus.

So I think that's a great position to be in your living modestly, you'd be completely unencumbered Faye with that mortgage paid off debt free.

You'd add 900 a month to your income which you could continue to build back up your savings and just put you in a really strong position. So, unless you had a real conviction. Otherwise, I'd say you go ahead and pay off that house, and I think you have a lot of peace of mind knowing that you you're completely out of debt. What you think I factor and not doubt that I'm wanting me to make back okay here in Nashville and down here that I've been here thinking and I'm longing to go back to 10 years, you might have a quiet town I have to not have type back is out on that game out of the last five years, so you only have to be there two years to get that tax exemption here find me here now to out of the last five years, he would have any capital gains on that first 250,000 of gain and you said you had 100,000 and gain so you be able to pull 100% of that out without paying any capital gains tax.

As long as you reach the two-year mark. All no man Listen you hold the line.

We'll talk a bit more off the air because I want to make sure we get all your questions answered. I'm so sorry to hear about your son but I'm delighted that the Lord give you some clarity here. I will talk more here.

Just a second. I bless you to do it for us today. Folks moneywise.

Love is a partnership between Moody radio moneywise medium to say thank you to Jim, Amy, Devon, Hans, my team, thank you for being here as well come back and join us tomorrow. I'll be here will see

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