Misconceptions Lead to Student Debt

What's your family mystery?

You know, that unresolved issue nobody dares bring up? I decided to talk about mine and let you eavesdrop on the journey. My name is Brian Dolan, and in a brand new podcast called The Grandfather Effect, I dust off the skeletons in my family's closet to determine why my grandpa stopped speaking to us.

On the journey, I ended up discovering something else entirely. Listen now on the Moody Radio mobile app, or wherever you get your podcasts. There's a rumor that the government is about to cancel $100 million in student loans. That should take care of at least four people. Hi, I'm Rob West. Okay, so that's an old joke, but it illustrates the need to borrow as little as possible for education, because it can quickly get out of hand. Today I'll talk with Art Rayner about six misconceptions that lead to big student loan debt. 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 decisions. Our guest today is MoneyWise contributor, Art Rayner. He's not only written many books on biblical finance, he's vice president of the college at Southeastern, and that gives him some really informed opinions about student loan debt. Always great to have you with us, Art. Rob, it is always such an honor to be on MoneyWise.

Thank you. Absolutely. All right, so you have an article at MoneyWise.org titled, Six Lines of Thought That Result in Significant Student Loan Debt. I'm really excited to unpack this today, because I think this is such an important topic. So dive in, if you would.

What's first on the list? Yeah, at first I'd like to say that I wrote this article, because student loan debt is such a significant issue today. According to the Education Data Initiative, the average college graduate leaves school with around $40,000 in student loan debt. Wow. That's a lot of debt.

Yes, it is. Right now, many high school students are receiving their diploma and heading off to college and they're wondering, how will they cover their costs? Now, based on statistics, the majority are going to use debt at some point while pursuing their degree.

And this is not purely a function of cost. Sometimes students are taken in by just incorrect lines of thought that lead to a lot of debt. So if you're a student, you really need to avoid these misconceptions.

And here's the first one. Attending a costly school will get you a better job. Attending a costly school will get you a better job. Higher tuition does not always equate to higher salaries. Employers don't look at the amount you paid to get a college degree.

They just look at the degree. And after your first job, where you went to school starts to actually take a back seat to your prior work experience. So find a school that makes financial sense for you, where you can get a good ROI on your education. That's a great thought. And that one alone could save you a ton of money.

All right, Art, what's next? Well, the second misconception is that you need the quote unquote college experience. Now, there's nothing wrong with enjoying your time at college. I enjoyed my time at college, especially if it works within your current financial situation. But more and more students are realizing that having the college experience, it's just simply not worth having that college debt. So they're getting jobs to help offset tuition costs so that they won't be paying on student loans 10, 15, 20 years after graduation.

And number three is this. It's okay to stretch out college. Certainly there is some leniency here, but you need to be careful when choosing to stretch out your degree program.

You may actually end up paying more and you actually run a greater risk of not completing your degree. And don't take those throwaway classes. Don't take the underwater basket weaving classes.

Make your investment worth it. Make sure every class that you take is intentional. You're not talking about the badminton class I took there in college, are you? I took a class on the study of bugs. Now, how does that apply to personal finances? It doesn't, but I was able to get a quick A. I will say I did get PE credit for going skiing during gym term one year, and I wouldn't trade that for anything.

All right, what's number four? This one has to do with education and loans. Yeah, it's that you don't need to know what you're signing. And I run into this all the time with those who have student loan debt.

They just did not know what they were signing. You need to educate yourself on student loans. Before you sign any papers, understand the commitment involved, what it'll take to pay off the loan, and what other alternatives are available.

You'll need to understand your loan when you're paying it off, so you better understand it before you sign that document. And number five is this. Everything will take care of itself. We hear this all the time.

It's just going to be okay. Well, unfortunately, that's not how it always works out. Student loans are stubborn things. They even survive bankruptcy. I'm less concerned with the student who feels burdened by the student loans than the one who feels no burden from their debt. Unless you manage to get through the obstacle course of debt forgiveness program, that's not easy.

Your loans will have to be repaid no matter what. Great thoughts. Check this article out to learn more. It's called six lines of thought that result in significant student loan debt. That was Art Rayner.

You can learn more also at ArtRayner.com. All right, your calls are next. The number to call is 800-525-7000.

Stick around. Thanks for joining us today on Money Wise Lot, biblical wisdom for your financial decisions. Hey, we've got some lines open today. We're just about to go to the phones, but we'd love to hear from you. The number to call is 800-525-7000, whether it's your spending plan, paying off that debt like we'll be talking about here in just a moment with Clint and Chattanooga, or maybe it's saving for the future.

Whatever's on your mind today, we'd love to hear from you. Again, 800-525-7000. All right, let's head to the phones.

St. John, Indiana. Mike, thank you for being our first caller today. Go right ahead. Hey, Rob. Thanks for taking my call. It was cool hearing from you today on Carlin Crew, by the way. Love that. Oh, great. Yeah, that was so much fun.

I love being on with the boom crew. Yeah. So here's my question. Me and my wife just sold our house that we built three years ago, and we made just under $300,000 on it. And we're going to downsize, and the next house is about $515,000.

And I could pay cash for it, but it'll only leave me with about $20-25,000 in the bank. Would you say to get a small loan mortgage, a 15-year, or would you say pay it off and just start building back? Yeah, that's a great question. A couple of questions for you before I weigh in. One would be, what would be the total of your monthly expenses each month in the aggregate if you ran to gifts? Oh, about $3,500 a month.

Okay. And how much do you have in surplus, or would you have if you didn't have a mortgage on a monthly basis? Probably about $25,000 in cash. Yeah, but on a monthly basis, let's say you don't have to pay the mortgage, how much margin would you have every month, money left over at the end of the month that you could put into savings? About $2,500.

About $2,500 a month. Okay. Great. And then you'd have about $20,000 in savings. And are you all saving for retirement through a company-sponsored plan or something like that? Yeah, I got an IRA.

Okay. So an IRA is only going to allow you to put in $6,000 a year, $7,000 if you're over 50, you could double that for your spouse. But are you also contributing to another type of retirement vehicle, or is it limited just to the IRA contribution? Well, I'm part of a company, and I'm hoping when retirement comes, I can sell out and walk away with some with that. Okay.

So you're looking to cash out based on your ownership or partial ownership of the company, as opposed to trying to save a bunch of money right now beyond just the IRA? Correct. Okay. And what is your age?

I'm 30. Okay. Great.

Well, here's the thing. I love what you're doing right now, and I love the idea of you being completely debt-free. And with that $20,000 or so, you essentially have six months expenses. You guys are living modestly. If in fact you're living on $3,500 a month, six months of expenses would be $21,000.

You're basically there. And you've got $2,500 a month that you could be putting away, which is great. So I would say, if it were me, go for it. Let's be completely out of debt, unencumbered, buy that house with cash. You've got six months worth of expenses in your emergency fund. I'd call that fully funded. And then the question is, what do we do with this $2,500 a month?

And I'd love for you to do some planning, just so you understand, you're highly concentrated in that company. So if that company does well, you're going to do well over time. If it doesn't, you've obviously got a lot riding on the success of that company in terms of the long-term value of that being able to be converted to you cashing out and then having a pretty healthy retirement fund. The IRA alone is probably not going to get you to where you want to go to be able to offset your expenses in retirement, supplementing Social Security. So I guess the only other question would be, once you cap your lifestyle, meaning you're not looking to spend more on a monthly basis on just lifestyle spending, and once you've paid off all your debt, which you'll be completely debt-free, then that leaves only two buckets.

The GROW bucket, that that you're saving for the future, and the GIVE bucket. Now with regard to GROW, if you've already established your emergency fund, then you've got $2,500 a month that you could potentially put into long-term retirement savings. If you all have kids, you could look at a college fund as well. With retirement savings, I'd love to get as much going in on a tax-deferred basis as possible, and so if your company offers something there, you might want to consider it.

But you've also got an incredible opportunity to dial up your giving and really pray through a plan that says, Lord, what would you have us do over the next 12 months in terms of our giving, and what other giving opportunities would align with our passions, and how can we lean into that both on a systematic and a plan basis as well as a spontaneous basis if the Lord were to lead you in that direction. But I think at the end of the day, Mike, I love the idea of you all buying this with cash, not having a mortgage, having plenty of margin every month that you can use to fund your other goals, and you've already got your emergency fund in place, so I feel really good about that. Awesome. Thanks a lot, Rob.

That clears it up for me. Good deal. Well, thanks for calling, and listen, congratulations for being on such a great financial footing here at the age of 30. I know the Lord's going to use you in significant ways. Just be open to what He has for you, and we appreciate your call today.

800-525-7000. We've got several lines open today. We'd love to hear from you. What's on your mind financially speaking? We'd love to unpack it today along with our other MoneyWise listeners who are out there listening in. Again, 800-525-7000.

We're going to stay in Indiana. Addison, welcome to the broadcast. Go right ahead. Hello. Sorry, I'm really anxious. I didn't think I'd actually talk to you. Hey, I'm glad you called, Addison. Just take a deep breath and tell me what's going on. Well, I have a son on the way.

He's my first kid, and I'm just really anxious about how I should properly keep my money so to make sure that I don't waste all my money. I don't know. I feel like a lot of people do that.

They spend all their money, and then they don't give their kids a good childhood. Yeah. Well, here's the thing. As a young guy with a family and a kid on the way, that's an incredible blessing from the Lord. So we start with thanksgiving and gratitude to say, Lord, thank you for what you've given to us, especially this amazing gift of a child, but also the resources that he's entrusted to you. And I think the starting point, Addison, is to say, I'm going to recognize that God owns it all, so everything I have is his. He's tasked me to be his money manager. His role as provider, my role is that of faithfulness.

So what does it look like to be found faithful as a young guy just getting started building a family? And I think it's really, first of all, after you recognize your role, then to say, what principles can I glean from Scripture around how I should handle money? And I think that starts on your knees, you and your wife saying, Lord, what would you have for us? And how can we take this tool called money and use it to reflect your priorities, not ours?

And where are you leading us as a family? And what can we do to live well within our means and avoid using debt as best we can? Have some margin, meaning some surplus beyond our bills that come in every month and the spending that we do so we can fund those goals, giving goals and saving goals so you can save for your future and not be a burden on your kids, but also so you can save for a college education, things like that that you might want to bless your kids with.

And then, you know, as you're going along through that journey, as your lifestyle continues to grow and as your income grows, I think the key question will be how much is enough so you can really understand how much you're trying to accumulate over time and what lifestyle has God called you to? The first place to really begin, Addison, is a spending plan. And have you and your wife taken the time to put a budget together? We recently have gotten a house. We just moved in right together. We haven't really talked a lot about financials, as I think we should, but so we really haven't gotten around to no budgeting or none of that, which we probably should because, you know, I have a swiping problem. I like to buy things.

Yeah. Well, that's good that you recognize that. And a plan can really help you all stay aligned in terms of your decision making. Again, what's most important to you? And the only way you're going to fund your long term goals is if you know what they are and you have a plan to do it. And that means you've got to live within your means and you're not going to be able to do that effectively unless you give every dollar a name, especially if your tendency is toward being a spender. And, you know, we're usually we're either spenders or hoarders or kind of somewhere in the middle. And if your tendency is toward spending, you know, having that plan that says, you know, I want to give myself some freedom to enjoy what God has given me within this, but it's going to be in the context of a well thought out plan, not a spontaneous reaction. So I think that's the beginning point is for you all to put that budget together. I would start by tracking what you're spending for 30 or 60 days just to find out what are the things we're getting a bill for. What is the discretionary spending, which tends to be the budget busters, the eating out and the, you know, entertainment and clothing, things like that, and then get that either into the Money Wise app or on paper. And then from that point, you know, have a plan to control the flow of money in and out, because the best thing you can do for your son on the way is make sure you all are being good stewards of what God has entrusted to you.

So let's do this. I'm going to do a couple of things. Number one, you hold the line, we'll get your information, and I want to get you a six month pro subscription to the Money Wise app. I also want to get you connected to one of our Money Wise coaches to help you guys put that spending plan together. The other thing I want to do is send you a book called Money and Marriage God's Way that will help you and your wife really get pointed in the right direction as it relates to how you manage money under the Lordship of Christ, understanding his principles.

So you stay on the line. We'll get all that out to you. And I think that'll get you going in the right direction. We'll be right back on Money Wise Live.

Stay with us. Thanks for joining us today on Money Wise Live, where we apply God's wisdom to your financial decisions. We've got a few lines open today, we'd love to hear from you. The number to call is 800-525-7000. Hey, we sent out our weekly Money Wise Weekly Wisdom email today.

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Check it out when you sign up today at MoneyWise.org. All right, back to the phones we go. Chattanooga, Tennessee. Hello, Clint. Thank you for calling today. How can we help? Hey, Rob.

Thanks for taking my call. So, here recently, my wife and I wrote down a budget to kind of double check what we spend per month based on our monthly income. And that way, we can kind of see what's going out, what our savings are, and all that good stuff.

But, I do have a question. My question is, I want to see about paying off some debt so we have more monthly savings coming in. And the two, out of the list that we created, the two that I'm looking at is a car loan that does have some interest rate and it's got a couple years left on it, and some credit card debt, but the credit card debt does not have any interest. And we've got about $6,600 in our savings. That's not including our, we got like two and a half to three months of our emergency savings put back, so we're not even looking at that amount. But, my question is, would that be good to pay off both loans or should I focus more on the one that has the 4.2% interest rate?

Because by doing this, it would deplete our savings account. Sure. So, I appreciate that background and I understand the money you're talking about is different from your emergency fund. Did you say the money you have to apply toward debt reduction is $6,600? Is that right?

Yes. Alright, and what is the balance on the credit card debt? So, the credit card is a little over $1,200 and the car loan is just under $5,000. Okay, alright. And how long does that 0% last on the credit card debt?

That 0%, it's good, I think it's got like seven months left on it. Okay. Now, if I'm seeing these numbers right though, if you owe just under $5,000 on the car and $1,200 on the credit cards and you have $6,600, you should be able to pay off both, right? Correct. But my thing is that would kind of almost eliminate like a general savings account. So, we would only have the emergency savings at that point.

I'd have to build back up just the general savings account. Yeah. What other savings are you doing separate from this? Are you contributing to a company-sponsored retirement plan or anything else? Yes.

Yes, I am. Okay. And what percent of your income are you contributing? 5% and my company matches that. Okay.

So, you're putting in 10. And does your wife work as well? She does. She's a teacher. Okay. And she has a retirement plan as well? Yes. Okay.

You know, I'd be okay with you all doing that because here's the thing. You know, you're going to save that guaranteed 4.2% on the car loan by paying that off. You're certainly not earning that in savings. And that credit card debt, I'd love to just get out from under that.

I realize it's 0%, but seven months from now, that's going to jump up to probably 12 or 15 or more. And so, let's just go ahead and wipe that out and then you're going to save the minimum payment on the credit card debt plus that car payment every month that you can use to rebuild your savings. I think you've already got three months expenses. Let's try to get that to six months, but we can do it by saving these two payments and then you're debt-free and let's try to keep it that way. Does that make sense? It does. I really appreciate it. Okay.

Yeah, I think that's going to give you a lot of peace of mind to know both of these debts are paid off and give you all some excitement and energy about putting that money aside, maybe doing some more giving and even increasing your retirement contributions, perhaps even up to 15%. So, we appreciate your call, Clint. God bless you, my friend.

800-525-7000. We've got one line open. We'll be right back on MoneyWise Live.

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Just search for MoneyWise biblical finance in your app store today. All right, all the lines are full. Some great questions coming up. So enjoy as we head to Indiana. Tom, thanks for calling, sir.

Go right ahead. Yeah, thanks for taking my call. I have a SEP IRA and I have purchased some real estate with it and it's rented out, stays rented out pretty well, makes itself money, pays for itself. I just want to know how that all works when it comes to retirement age. Yeah. How that goes through. Yeah, in terms of the required minimum distribution or something else?

Yeah, yeah, like that. How would that work against the property? How does that work? Yeah, well, with a self-directed IRA, whether it's a traditional, a simple or a SEP, you can own real estate inside the asset. So the great thing is that all the appreciation of that happens on a tax deferred basis and there's income coming into that account and so forth.

That's a great thing. Now, when you get to age 72, you will have to take a required minimum distribution based on the value of the account and your age. You're not going to be required to liquidate the holdings. You can take an in-kind distribution. So if you have any cash portion of that account, you can use that to satisfy the required minimum distribution every year and continue to allow the real estate asset to grow. The key would just be making sure there's enough to distribute at least the required minimum out of the account to satisfy the IRS requirements.

And what would that be? Well, it's going to be based on the IRS table. So you could go to the IRS's website. You'll have to determine the value of the holdings in it because you'll have to get a valuation. And based on that valuation and your age, the IRS will tell you exactly how much you need to take out and it will change each year because each year you get older and the RMD is based on your life expectancy. So it'll be pretty simple to calculate. I would probably have a CPA or accountant do it for you for the first couple of years if you normally do it yourself. Otherwise, it's normal.

But if you want to get a good idea of what that is, you could just go to irs.gov and get a good sense of what that required minimum will be for the year. Okay. And it's probably just better off just to, if you can, just let it ride, right?

Oh, yeah. I mean, that would be great because then as this property continues to appreciate inside that SEP IRA, it'll just grow in value. There's no drag of the taxes on it because it's tax deferred. And then obviously, as you liquidate that, if you need to draw an income from it in retirement, you'll be able to do that. But this is a great option for you as you have a real estate holding inside that tax deferred environment.

Quick question. Would it be advantageous to turn it into a Roth? I know it's costly.

Yeah, it is. You know, it's all going to be taxable to you. And I think, you know, once the only reason you do that is if you think you're in a more favorable income bracket tax bracket right now, then you will be in the future. Now, clearly, we have low tax rates right now.

They're likely headed higher down the road, depending upon which parties in control in Congress. But at the end of the day, when you get close to retirement, when you don't have the compounding years working for you, as many at least, and you're going to be looking at adding significant amounts of taxable income, it usually doesn't make sense. So you could run that by your CPA and run some scenarios, but I think especially given the fact that you wouldn't be able to do this in portions because you own one single asset inside that SEP IRA, it would all become taxable to you at the point you do the conversion. To a Roth. Okay, so you paid all the taxes up front.

You do for whatever portion you convert to a Roth, and that could be pretty costly and push, you know, a good portion of that up into a higher tax bracket. So I would explore that, but it's likely that you're going to just need to leave it where it is, and then when you get to 72, you'll start to take those required minimums. All the best to you, Tom. We appreciate you checking in with us today. To Chicago, Jessica, thank you for calling. Go right ahead. Yes. Hello. Good afternoon.

Hi. I have a gift that was given by my parents of $6,000 for me to become a first time home buyer. I have not used it because I haven't been able to purchase a home, but now I have a credit card debt of almost $11,000. I did have some of it with zero APR for balance transfer, but then I have about $4,000 of it where it has about a 15% interest rate. So my question is, do I use the $6,000 to pay off the credit card debt and then use my 401k to buy my first time my home? Yeah, I would not do that, Jessica. Let's talk through this together, and obviously you need to make this decision.

I don't want to tell you what to do, but let's just kind of process this. Number one is your mom and dad gave you that money specifically for a down payment. Is that right? That is correct. Okay. And have you been talking to them just about your home buying process and the fact that you haven't had something? Have you all been communicating about that?

Oh yes, definitely. Okay, great. And the $11,000, where did that come from? Was that one event or has that just kind of been building over time because you're living beyond your means?

It's that, the latter. Okay. And what about now? Are you going under every month in terms of you have more expenses than income and so that's, you know, you're continuing to add to those credit cards? I haven't continued to add to it, but I haven't been able to save, yeah, because I have more expenses.

Okay. And, you know, when you look right now at the home buying situation, what are you thinking you're going to spend? What price homes have you been looking at? I've been looking at around $200.

I'm in between $200 and $215 with my husband and so that's what we're looking at. Okay. And what do you have in savings? Do you have anything in savings beyond the $6,000? I do not.

I only have a 401k and an IRA. Okay. All right. So I think the next steps for you guys are, number one, I would really delay this home purchase. Number one, you know, first of all, the housing market is sky high right now. Number two, I'd really love for you to have a 20% down payment before you go into it. That's, you know, $40,000 or so and you've got six, $40,000 on a $200,000 home purchase. And so if you go in, you know, only with $6,000 on a $200,000 home, I just don't think that's going to give you enough equity if the housing market were to take a dip.

You guys are already a bit overextended vis-a-vis the credit card debt. I think you've just got to delay that. So I'd put the $6,000 aside and just not touch it.

That's a great blessing that your mom and dad have given you, but it's for later, not right now. The thing you and your husband need to focus on right now is getting a spending plan that balances so you're living within your means. And I would not pull from that 401k.

If anything, I would stop contributing new money to the 401k and I'd contact my friends at christiancreditcounselors.org to get on a monthly payment plan to pay that credit card debt off, but do it within a budget that balances. And we're going to pause for a break, but stay on the line, Jessica. We'll talk a bit more off the air. We'll be right back. Hey, thanks for joining us today on MoneyWise Live as we apply God's wisdom to your financial decisions. We're going to head right back to the phones in just a moment.

We'll be back in Indiana with Paul and Ohio with Gary, but first Tampa, Florida. Sarah, thank you for calling today. Go right ahead.

Yes, thank you. I've been a businessman forever back with Mary Paquette, so this just brings me joy. And years ago, my family participated in a crown workshop at our church.

The call today is amazing. I'm divorcing my husband and I are divorcing after 30 years of marriage and it's painful, but it must have it must happen. We purchased our home for $100,000 25 years ago and now it's worth over $300,000 or more. So we owe $30,000 on the mortgage.

I've paid it since we've had it and then we have a home equity line of credit that's $35,000. So nobody lives in the home but me because the children are grown and he has moved on. So the question is, should I buy him out of the house or should we just sell the house and understand that the market in Tampa is one that I can sell it for $300,000 and I pay like less than $2,000 for mortgage right now. And if I sell it and try to find another place to live, it may be difficult for me to find a place but it's just myself so I don't need a four bedroom home anymore. So I just don't know I kind of want to keep the home because I would like the children if they ever needed a place to come back, they're grown at 25 and 30. If they ever needed a place to come home to I wanted to have a home. But at the same time, I don't know that it's feasible or wise for me to hold on to the past.

Yes. Well, Sarah, I appreciate that question. First of all, I'm so sorry to hear about your divorce. I know this is a difficult season.

We'll ask the Lord to be near to you and really just walk with you every step of the way. I know the financial decisions are real and can be difficult as well. I think the first question is what would you like to do? And I realize you've said you've explored both sides of this decision. One is selling and that gives you the ability to downsize, have less upkeep, less responsibility. The home's not as large, easier to maintain. Perhaps you're in a town home where you don't have to keep up with the yard and those kinds of things. The other side of the equation is you've been there a long time, you love the home and you want a place for your kids and grandkids to come back to.

So I think part of this is where's the Lord leading you in this next season? And then secondly, what financial means do you have? Do you have the ability to buy your husband out from under this if you were to have to pay him $150,000 or take out a mortgage to be able to do that?

I could. I am retired and for my pension I get, well, I could retire. I'm just 50 so I have decided not to pull it yet because right now it's at $82,000 a year that I would receive. But I think it's wise for me to wait until retirement age to pull it out.

Right now I am not working. However, I have an IRA that I rolled over from a different, so I've been paying my bills which I only have the mortgage and less than $5,000 in credit card debt. No car loan or anything like that.

Just the regular utilities and the mortgage on the house are the only things that I pay. And I do have in the IRA $50,000 so I could easily pay the, you know, so yes I could do it if I wanted to. Sure.

Okay. So if you have the financial ability to do that and then you'd have to decide do you want to try to liquidate assets and pay him in cash or do you want to take on a mortgage? You know, at 5% interest, a 20-year mortgage on $150,000 would run you about $1,000 a month and then you'd have to add homeowners and taxes on top of that. It'd probably be, you know, $1,300, $1,400 a month I'm guessing and so you'd have to factor that into your budget or you could do a combination of paying him out of your assets and a smaller mortgage. But I guess the bigger question is, you know, what does God have for you in this next season of life? Is this an opportunity to downsize? And, you know, even though I know you'd love to have a place for the kids, I think that's something you really just need to pray through and think through.

Perhaps take the next week or two and just, you know, pray earnestly and ask the Lord to give you just a real peace of mind here. If you were going to sell it, obviously that's the, you know, best way to go in terms of satisfying whatever portion he would be entitled to because when we liquidate assets, tangible assets, then it allows the proceeds to be distributed more easily. You pay back the two notes and then you all would divide the distribution, the proceeds of the sale.

There's not going to be any taxes due, any capital gains because you all lived there a long time and it sounds like, you know, you'd have $500,000 in gains that would not be taxable and you'll have about $250,000 and that's great. So I think the next decision is really just about whether or not you want to keep the home or sell it and if he's willing, you know, to sell it to you, he's already moved out of the home. I assume he'd be willing to do that if you'd buy him out, but is that the right move and would you be, you know, better off in something a little smaller, maybe where there's still an extra bedroom but maybe not three extra bedrooms, you know?

I think that's what for months I've been saying no. I'm saying the children need to have a place to come home to, but at the same time, wherever I am, they can come. So I think that you have helped me fill the deal. I think I'm going to sell and just move on and be happy with my new life in a smaller place, but one still filled with love. That's exactly right and if you're there, I'm confident that will be the case and the kids will still come visit and you can make that exactly what you want, but on a day-to-day basis, Sarah, you won't have quite the upkeep and the expense associated with keeping this larger place.

I think over time, you'll be glad you did. Let me pray for you before I let you go today. Father, we just lift Sarah up to you. Thank you that she is your child, Lord, and as she journeys through this difficult season, we ask you to be near to her. Give her a vision for what you have for her in this next season with her kids and ministry and at her church and, Lord, help her as she navigates these financial decisions as well. Thank you that you say in James that if we ask, you'll give us wisdom and so we're asking today for wisdom as she journeys through each of these decisions she has before her. Lord, thank you that you love her and you're right there with her and thank you for your son Jesus above all else and we ask this in Christ's name. Amen. Sarah, thank you for calling. May the Lord bless you. We're going to finish today in Ohio. Gary, thank you for calling.

Sarah, go right ahead. Thank you for taking the call. I have a $600,000 life policy, whole life, paid up. I'm 76 years old. I borrowed $340,000 to pay my bills from being in the hospital with leukemia and to keep my home up. Leaving me currently $260,000 life or death benefit. Do I pay back that and avoid paying the 5% interest each year? Or do I just let the policy rise and every year it goes down by 5%? Yeah, and if you were to, what is the surrender value on it today if you were to take it out, cancel the policy? If I took the money out, about $190, $200.

Okay, and that would be $190 or $200 after the loan's been paid back, correct? Yes. Yeah, okay. And what about your income needs right now, Gary? Are you drawing anything from this? Do you have a need for this money? No, I've got at least six months in need, you know, what my normal income would have been. I've got about $67,000 saved. Yeah, okay.

Very good. I'd like for you to visit with the financial planner just to look at the details of this policy, understand the tax implications of this. I mean, clearly, if you're having to obviously pay 5% a year, if you could get this money out, you don't need the death benefit. You could satisfy the loan and have a couple hundred thousand dollars that you could put to work for you and be able to access this as you need it.

You know, that makes some sense to me, but I want you to have somebody look this over just to make sure you're getting wise counsel that we understand not only the details of the policy, but as I said, also the tax implications of this. Do you have an advisor, Gary, that you've worked with in the past? No, I don't. Okay. Are you comfortable navigating the internet?

I'm blind. Okay, let's do this. I'm going to ask you to hold the line, Gary, and I'm going to have one of my team members get your information. And we're going to have somebody reach out to you over the telephone to connect you with a couple of advisors, perhaps one that I think would be a good fit for you there in Ohio, just to look over what you have in that policy, your other assets, and just give you some direction. So we don't make this decision without having all the facts, because I want to make sure we get you pointed in the right direction and position you well for for the future.

So you stand the line. Deb will get your information and we'll get somebody to reach out to you and help you make a final decision. Okay. Thank you. Yeah, you too, Gary.

All the best to you. Boy, some wonderful callers today. God's people are such a blessing. Thank you for inviting us into your story and bringing your questions today, sharing your heart. It's always a joy to be with you each day. I want to say thank you to my team today, Deb Solomon, Amy Rios, Amy Lee, and Jim Henry.

I also want to tell you that MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I'll be here tomorrow. I hope you'll come back and join me. We'll see you then. Bye-bye.