Concrete Steps Toward Getting Out of Debt

As the New Year gets underway, many people feel motivated to do things like lose weight, cut back on social media, and yes, get out of debt. Unfortunately, New Year's motivation often wanes quickly. Hi, I'm Rob West, and today I want to give you practical ideas for turning a New Year's resolution into genuine progress, at least in the getting out of debt area.

That's just ahead. Then to the phones for your questions on any financial topic. Our number is 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial journey. Well, as you may know, every so often on our Monday program, we like to revisit the five basic things you can do with money.

Here they are. You can earn it, live on it, give it away, owe it to someone or the government, or you can grow it for the future by saving and investing. So that's earn, live, give, owe, and grow.

Well, today I want to focus on the fourth of those, owe. As I mentioned, a lot of people at the first of the year resolve to get out of debt or at least make progress on reducing their debt. That's a good resolution because debt, especially consumer debt, things like credit cards, put a drag on your overall finances.

Getting those debts paid off will improve your financial situation tremendously and provide a great sense of freedom in your finances. But as I say, motivation often wanes quickly. As we get a few weeks into the year, many resolutions fall by the wayside. So to stay motivated, you need to have a plan. You may remember that a few days ago I mentioned the idea of making your resolutions SMART.

That is S-M-A-R-T and that stands for Specific, Measurable, Attainable, Realistic, and Timely. So let's start with this specific thing related to debt. Find out where you are. By that I mean you need to have a concrete understanding of how much you owe and to whom along with the terms, including the interest rates. You need to know that because just to give an example, it'll make much more sense financially to attack a credit card debt that's at 18% than a car loan that's at 3%. Okay, so that's the first thing.

Find where you are. As you catalog your debts, I suggest you list them in order from the lowest balance to the highest. Second, and this too is very specific, stop adding to your debt.

As the old saying goes, it's hard to get out of a hole if you keep digging deeper. You may want to stop using credit cards and instead move to a debit card or cash for your spending. That'll help you avoid further debt. Now third, this is an idea from financial writer Matt Bell, he says tell someone what you're doing. In other words, ask someone to hold you accountable to your plan to get out of debt.

It's remarkable how much it helps to have an accountability partner when it comes to following through on what you committed to doing. Fourth, create a specific plan for paying down your debt. Now, there are different ways to approach this. Perhaps the easiest method is to commit a specific amount to debt reduction each month. Let's say it's $500 and you have five credit cards. Pay at least the minimum balance on four of your cards but pay as much as you possibly can on the card with the lowest balance.

So to continue the example, let's say your minimum payments total $300. So you pay that but then pay the remaining $200 toward the lowest balance card. When you focus your payments this way, you'll be able to pay off that lowest balance card soon. Then when it's paid off, you'll keep paying $500 a month on your debt but now focus your attention on the new lowest balance card.

After a while when that one is paid off, you keep paying $500 a month and put most of the money toward the new lowest balance card. This approach of fixing your overall payment at the same amount each month and attacking the lowest balance card will create a steady sense of progress that you'll find encouraging. And note how this approach is smart. It's specific, measurable, attainable, realistic and timely.

It's not vague at all. It's clear and purposeful. Now after you get all your credit cards paid for, you can then start attacking other debts that may be at much lower interest rates such as car loans and school loans. If you were paying $500 a month against your credit cards, that $500 is now freed up to accelerate payments on your other debts. This process of creating a systematic plan for paying down debt has worked for many, many people. And again, first you need to get a clear picture of where you are, then commit to not taking on more debt and finally create a clear, easy to implement plan that you can stick with. By the way, it's really important to get an accountability partner. All right, your calls are next, 800-525-7000.

Much more to come. Stay with us. Thanks for joining us today on Faith and Finance Live.

I'm Rob West, your host. This is where we apply the wisdom from God's word to your financial decisions and choices. What are you thinking about?

Let's talk about it financially speaking. We've got some lines open for your questions today at 800-525-7000. The calls are coming in quickly. So if you've got a question, why don't you get in line and so we can tackle that with you today.

800-525-7000. Before we head to the phones, we started today on the topic of debt. You may be someone who's been thinking about, perhaps you're concerned about or struggling with credit card debt, but don't know where to start. Well, let me break it down into two categories. If you have less than 4000 in credit card debt, generally speaking, the snowball method is the most effective.

What is that you ask? Well, that's essentially where you start with your budget, get all your bills covered, look for places to cut back so you can free up margin, something left over at the end of the month. Now, line up the cards, the credit cards from smallest to largest balance, pay the minimums on all of them, but that margin that you freed up in your family budget?

Well, apply 100% of that excess to the balance that's the smallest. Let's get that one knocked off. Maybe that's three or four months from now.

It's gone. Well, that's going to give you the momentum, the encouragement to keep going right down the line. And the data says that if you use that snowball method and see some progress, you're probably much more likely to continue making progress until everything's paid off. Now, if you have more than 4000 in credit card debt, well, our good friends at Christian Credit Counselors and underwriter of this program offers a debt management program that can get you out of debt 80% faster while honoring your debt in full. You'll have a fixed monthly payment that fits into your budget. They'll help you come up with that. And through the lower interest rates they're able to access with your existing creditors. Well, it's a very effective strategy. You can learn more at christiancreditcounselors.org and get started today. All right, let's take your phone calls.

800-525-7000. We're going to begin in Farmington, New Mexico. Go right ahead, Roger. Hello, I have a CD that's going to be maturing this week. It's a sizable amount.

I'm not sure if I'm ready to share that. I'm thinking of different options based on what I'm learning and being pulled of. By the way, I do have a financial advisor or planner and it's through him, and I learned about MYGA. I forget what that stands for, but as I understand it, instead of a CD, it's through, I guess, an insurance company and the interest rates are much higher than most CDs. As an example, you know, four plus percent on the MIGAs. And you said MYGA, is that right?

Yes, I have. Yeah, do you think that's basically a guaranteed annuity? I suspect a multi-year guaranteed annuity is what he's talking about. Yeah, they offer guaranteed fixed interest rates for a period of time, usually between three and ten years.

You know, if you want tax deferral and a guaranteed rate of return, it is an option, and so you certainly could look at that. CDs are paying obviously much better rates now than they were previously as the Fed funds rate has continued to rise, and it will continue this year in 2023 based on what the Fed is telling us. For instance, I'm looking at a four and three quarters percent one and a half year CD right now. You know, that's nearly five percent for the next year and a half. You know, you could push that out about the same level, about four point six percent for as much as five years. And, you know, that's a pretty good rate of return and rates are continuing to rise.

So I think we'll see that move higher. And so, you know, one of the benefits of keeping the money is the annuities tend to be complex and they've got surrender charges if you need to get your money back. Whereas with the CD, you'd have access to your money at the end of the term and you could either roll it over or if you need to take a portion of it to do something with, you could certainly do that as well. So I think that's the question is whether you want to lock it up into an annuity product that has some complexity and, you know, some of the you lose some of the liquidity in terms of, you know, until that surrender charge is until those run out, which could be as much as seven years versus a CD where, you know, if you built a CD ladder, maybe you've got a one, two and a three year CD ladder, a third and a one year CD, a third and two years, third and three years. And then every 12 months, you're rolling a portion of that over to take advantage of higher rates.

But you're also having a liquidity event at that point where you can get access to the funds without any penalties or charges at that point. Does that make sense, Roger? Yeah.

As a matter of fact, that's what I have done. I had a one year, 24 months and 60 months. Okay. Six months of maturing this week.

And I did kind of that latter effect. The others I readested elsewhere through suggested investments through my advisor. So this is one coming up. I mentioned MIGAs and you mentioned the CDs, which I have a printout from my credit union right now. I went to them last week and their current rate ranges, the high end is about 3.3. And surprisingly enough, only for a price of 3.25 and surprisingly enough, just for a one year versus 2.25 for a 60 month.

Sure, sure. Well, I think you first you got to decide kind of which direction you want to go. If you want to stay with the CDs, there are better options out there. So for instance, if you had to bankrate.com, if you're comfortable using the internet, again, bankrate.com and you were to click on the CD button, they will show you who has the best offers right now for CDs. And what you'll find is that, you know, with a FDIC insured online bank, that's, you know, has five star rating, which, you know, just has to do with the, it's rated objectively by the bank rate team on a number of factors, including service and the strength of the institution. You'll find that, you know, I'm looking at a CD right now from a five star rated online bank at 4.15 for 12 months. I'm looking at another one for a one year CD at 4.3.

So there are other options. You'll get that FDIC insurance and you'll have liquidity in a year with a great rate in the meantime. So I'd check that out, Roger, at bankrate.com.

Just do a search. You can put in your, you know, term length you're looking for, whether it's a one year, two year or more, and find out who has the best options and then take advantage of it. If you want to go with the annuity, you certainly could.

Just make sure you understand what you're getting into and what kind of surrender periods you'll need to wait before you get access to the funds without paying any penalties. We appreciate you calling today, sir. God bless you. Thanks for being a part of the program. Folks, we're going to be taking more of your questions. We've got some lines open at 800-525-7000. First, a quick email, though, we receive questions all the time at askrob.faithfi.com.

We try to get as many of them on the air as we can. This one comes to us from Ann. She says, we try to honor God by tithing on the gross income from our jobs. We own and rent out two single family homes.

One is paid for, one has a mortgage. Should we tithe on the total amount of rent we receive from our tenants or on the rental income minus expenses? And I would say, Ann, if you're applying the principle of the tithe, which is on the increase, specifically as it relates to a business, and that's what I would put this rental property in the category of, then you would tithe on the income minus expenses, and those expenses would include the interest paid on the mortgage. So I would look at the net amount that's available as profit to either be paid to you or retained at the end of the year, and then tithe on that amount.

That's truly your increase with your business, not with your income, but with a business. Thanks for writing to us. We're going to take a quick break. Much more to come on Faith and Finance Live. Stay with us. Great to have you with us today on Faith and Finance Live. I'm Rob West. We're taking your calls and questions today on anything financial.

Looks like we have one line open. 800-525-7000 is the number to call. Hey, it's a new year, so it's naturally a good time to review your budget. Well, to help, we're offering some special savings when you download the Faithfi app. Not only can you manage money like other leading apps, but you'll also get access to leading biblical financial resources and a community of like-minded believers, also on their own stewardship journey. No other finance app offers all these elements in one place, specifically built for believers. So just go to faithfi.com. That's our brand new website at faithfi.com, and click the app button to get started.

And know that when you use the app, you're helping to fund our ongoing outreach to share God's financial principles with others. All right, back to the phones we go. Lines are full of some great questions coming up. Let's head to Alabama. Hey, Mike, thanks for calling, sir.

Go ahead. Hey, thanks, Rob, for taking my call. My son is 39. He has a traditional 401k with the company that we work for. He was thinking about moving some to the company sponsored 401k Roth. He knows it's going to be a taxable event if he passes some over to the other one. But he is committed to 10% right now to his regular Roth.

Our company matches three on three and then 50 cents on the dollar for the next two, up to five dollars. He is at 10%. I told him to back down to five so he gets the full match and then fund the Roth out of his excess that he was going to be putting into the other one. But he was wondering, would he have enough time to recoup the taxable event, probably work in another 20-25 years, if he moved a portion out? And if you think he would, how much do you think would be a smart move?

Yeah, very good. And does he have the funds available to pay the tax without having to access that from the 401k? Just for the sake of this argument, yes. But if he don't, then we'll know that, you know, that's going to have to come out of that also. He's 37, so he'd have to pay the penalty and the tax. So he's just wondering about being able to have enough time to recoup that.

And I told him I wouldn't give Uncle Sam that money. I would just take my 401k down to five and then take the Roth and bump it up to 10. Yeah, now both are 401ks. You're not talking about a Roth IRA. You're talking about the Roth 401k in addition to the traditional 401k, correct? Correct. And they're both with our saving pool.

Yeah, okay. Yeah, so a couple of thoughts here. I mean, I'd take full advantage of the match whether it goes into the Roth or the traditional.

I like the idea of him having both buckets available. And so one idea would be just to say, let's, let's freeze the money that we had been putting in the traditional and just move, leave that there, let it continue to grow, and then start contributing moving forward into the Roth. Because as you said, with 20 years on his side, I like the idea of having tax free growth. Now, what's unknown here, Mike, is where taxes going to be in retirement? Are they going to be higher or lower? If they're higher, then obviously, you know, you would have the, the better option would be the Roth IRA, because you're paying the today's tax rates. If they're lower, because they basically stayed the same, and his income is dropping in retirement, well, then, you know, paying the tax at retirement would be a better option from the traditional.

And so, you know, we just don't know. And so the idea behind having both growing for him is that, you know, he could choose which bucket to full pull from at that time, depending on what makes the most sense. Now, one other interesting fact here is that as a part of this omnibus spending bill, and we can debate whether or not that makes sense at a later time, but specifically related to 401ks, some interesting things were in that that affect retirement accounts. Currently, if you're contributing through a salary deferral as an employee to a Roth 401k, the match from your employer has to go to the traditional variety of the 401k. But as a part of this, this omnibus spending bill starting in 2024, the, the employer's contributions, the match is allowed to go into the Roth as well.

And so you'd have 100% of what he was contributing going there. So I guess that might be a better option that doesn't create a taxable event, which is if he likes the Roth, and I would agree with 20 years on his side, you know, I like the tax free growth. What if he were to just leave what he has right where it is, and then just start contributing his portion to the Roth. And then in 2024, he could have both his and the employer's match going into that Roth.

What are your thoughts? Well, hey, right now he's contributing 15% to the traditional. Yeah.

So would you just do five to capture the traditional match? And then go to the Roth? Yeah, they don't give him the match on the on the, the Roth contributions?

Not yet. They may after this new bill comes into effect. But right now they don't do a match only Roth.

Okay, well, you may want to just double check that. Because usually the match is not subject to whether you choose the Roth or the traditional, they match regardless, it's just that their match goes into the traditional, even though you're putting your salary deferral as an employee into the Roth. So what I what I would suspect happens is if he were to call HR and say, listen, starting today, I want to put 15% into the Roth, they'd say that's fine, we're going to match up to three. And then beyond that 50 cents on the dollar, our portion is going to go into the traditional IRA, you're still getting the match, but it's just going into the pre tax version. And then come 2024, they'd be allowed to put it into the Roth if that's where he wanted it to go. Does that make sense?

Oh, yeah, yeah, that makes sense. And that that's probably the way is the the other thing to consider is not every company allows you to make a transfer to convert an existing traditional 401k to a Roth. So moving that money is not a given.

They may not even let him. But I think the bottom line is perhaps the way to think about it is where do I want future contributions to go rather than creating a taxable event? And I would say let's leave the money in the traditional right where it is. He starts putting 100% in the Roth assuming they're going to match it into the traditional. And then until 2024, we stay on that track.

And at that point, we can have everything going into the Roth 401k, which I think could be a great option. Listen, if he has any other questions, have him give us a call back. Thanks for checking with us. Joyce, Shawn, and we're coming your way just after the break. Stay with us.

We'll be right back. Thanks for joining us today on faith and finance live where we apply the wisdom from the Bible to your financial decisions and choices. Here's the reality. You know, the way we allocate money, it really indicates in many ways where we're at spiritually, where our heart is at. It's a reflection of what we value, where we've placed our trust.

And here's the good news. God's word provides all kinds of counsel, wisdom principles that we can apply to today's decisions as we define how much is enough for our lifestyle and our accumulation as we decide how much to give away and how much to keep, what it looks like to really hold God's resources loosely and live within his provision. The big idea, contentment and generosity. Completely throughout scripture, we see that we're to be generous sowers and to whom much is given, much is required.

Well, as we manage God's money, the money we live on and spend, the money we give and owe and grow, we can pull those principles out of scripture to apply to the decisions and choices we're making each day. Well, let's do that together with your questions. 800-525-7000. We've got two lines open. We'd love to hear from you.

Let's head south to Miami. Hi, Joyce. Thanks for your patience. Go ahead. Hi.

How about you today? Thanks for taking my call. Yes, ma'am.

I have two questions, but I don't know if I could get to the second. I have my guarantee signer that I signed for, but they keep using the CAD and keep going up on the bill. I don't know how to handle that. Should I put a hold on it that they don't create any more bill?

Just pay off what they owe? Yeah. Are you talking about an authorized user or a credit card? That's it. Authorized user. Thanks for correction.

Okay. And who is that authorized user that you're referring to? Is it a family member? Just, no, a friend, a friend from church, but she didn't have any credit.

I went to the bank. I helped her out, but she keeps using it every month. Everything she wants. If she wants to change her oil, she uses it. If she wants to pay insurance, she uses it, and it's going up. Joyce, tell me.

I saw something come in the mail for 15%. If she transferred, she could have 15 months with no interest. I was thinking if that was a good idea to introduce her to. Well, let's back up though for a second because I want to help you sort this out here. When you first set this up, what was the understanding in terms of adding her to your account? Well, she needed some money to pay some bill, to pay a bill.

Okay. And so you added her to the account and gave her the credit card and said, you can use this for your bills? I went to the bank and they sent her a card. She has a card in her name, but it's my account.

Okay. But she's using it like it's hers. Instead of what I had tried to help with to pay off what she owed, it's going higher and higher.

Oh yeah. And have you confronted her about this to say this wasn't a part of our original understanding for you to be used this freely? I talked to her about it, but she's no longer going to the church I go to. I don't want to hurt her feeling, but in my spirit, I'm kind of upset about it that she knows that she's not doing the right thing. And I don't usually do that because a family member asked me to do it and I didn't do it.

Yes. Well, Joyce, you've got to look after yourself here and she's taking advantage of you by taking this account and using it in a way that it was not intended to be used. So I think you need to cancel this card immediately. Unfortunately, because you've added her as an authorized user, you're out of the goodness of your heart.

And I completely appreciate the spirit in which you did it initially. It's just that because she's misused the situation and taken advantage of you, you're now entirely responsible for this debt. And she's not because she knows that she's not legally responsible for it.

You are. You're the one who took out the account and you gave permission for them to send her a card. And so if she were to take this card tomorrow and buy a sports car, you'd be responsible. And at this point, we can't have any reason to believe that she would do the right thing with regard to how this is used and not take further advantage of you. So I think the next step here is immediately to call them and cancel the card and tell them I need to remove her as an authorized user, perhaps even cancel the account entirely or have them at least issue you a new account number that would be in your name only, especially if the card number on the authorized user card was the same as yours.

And then we've got to decide how to handle this moving forward. I would sit down with her if she's willing to do so. And she may not, especially if she knows that she's taken advantage of you. But I would attempt to sit down with her and confront her about this and tell her that you would like her to pay this back as she's able to and develop a plan to do that in writing that she would agree to. If she doesn't respond to you, would follow the biblical model. Even though she's not in your church, I'd contact whoever whatever church she's going to and sit down with her and follow Matthew 18 and bring somebody else with you, perhaps from her church, to sit down with her and say, listen, this was not what we discussed.

But that's ultimately going to be up to you how you handle it. But I just don't think you're in a position right now to let one more minute go by with this account staying active, especially given her track record of how she has misused this in the past. If she's unable to repay it or she's unwilling to meet with her, with you, and or you don't want to confront her about it, well then the next step is for you to decide how you're going to repay it as to not create further harm in your financial life.

Because if this gets past due, it's going to obviously reflect very poorly on your credit report and that's going to hurt you moving forward. What is the balance on this today, Joyce? Right now, last time I check it, it's $7,000. She's paying every month. She's paying. Is she paying the minimum or is she paying more than the minimum?

She pays the minimum and sometimes she pays a little more than the minimum. But my problem is that she needs to stop purchasing. Yeah, and the only way to do that is to call the card as soon as you get off the phone with me and tell them to cancel it and to take her off and perhaps reissue the account number so she no longer has access to it because you have no way to prevent her from charging up additionally thousands and thousands of dollars. Now, maybe she won't, but certainly the pattern that's gotten us to this point where you now have a $7,000 balance would tell us that she is very likely to continue to charge on this. So I would call the credit card company immediately and turn off her access to this card and then I think you need to request a meeting in person with her to ask her how she's going to not only make the minimum payments but start to make some real progress on getting this paid off.

And then from that point forward, you need to also be ready to step in because if she decided one month not to make a payment and she gets more than 30 days past due, it's going to start showing up on your credit report that you're delinquent and that's going to have some real adverse effects to you in terms of your credit report. One other approach once you close the account and you're done with it would be to contact our friends at christiancreditcounselors.org and have them close the account, get the interest rate down, and then hopefully she or together she and you could work toward paying this off once and for all. And I wouldn't talk about any further assistance until this balance is down to zero, not anywhere close to where it is today at seven thousand dollars. So we'll ask the MoneyWise community to be praying for you. I certainly will, Joyce.

Ask the Lord to give you some wisdom and some favor as you navigate what will likely be a very difficult discussion but I'd take some action now in getting this access to the card closed off immediately. God bless you. Thanks for calling. We'll be right back. Thanks for joining us today on Faith and Finance Live. I'm Rob West, your host. Before we head back to the phones, it's Monday which means our good friend Bob Doll stops by. Bob is chief investment officer at Crossmark Global Investments.

You can learn more at crossmarkglobal.com and while you're there be sure to sign up for his dolls deliberations. Bob, good week to you, sir. How are you?

Thank you and the same to you. All right, Bob. What are you thinking about this week? What's the news of the day and how are you thinking about investing? So the news has everything to do with what the news was in late December.

We're in a new year but not everything changes. The markets don't know the calendar's changed so we're still worried about inflation although there's been some better news of weight. How far and how long will the Fed keep rates high? Does that mean we're going to have a recession?

What's that going to do to earnings? You know, the same list, Rob, as we had before and you know our view is when you put it all together it's going to be a much better year than last year but still very choppy and tough to make money. Yeah, no doubt about it and Bob, I know we talked as we reviewed your 10 predictions for this year about earnings estimates. Undoubtedly, they're too high at this point, huh?

Yeah, we think so. I think analysts are kind of waiting for management to report fourth quarter and give a clue what 2023 might look like before they adjust their estimates but I think there'll be more downward revisions in front of us whether we have a recession or not, Rob. I mean, if we have a normal recession, earnings have to come down a lot.

That's not what we're calling for. We're thinking a mild recession which is still not fun but earnings are the key this year. Last year was all about interest rates and inflation and valuation levels coming down. Remember, in 2022, earnings were up. The stock market got whacked. Reason?

PE ratios. Valuation came down because interest rates went up and stocks were the victim. Yeah, no doubt. Bob, you indicated in your predictions for this year that you thought international could actually outperform US stocks.

Isn't that right? Yes, and I need to point out to listeners that that happened in 2022. International stocks went down less than the US. A lot of people don't believe that because of all the problems we're aware of outside the US but the US took it on the chin more.

Reason? Our market had further to come down. Valuations here were much higher and, of course, our Fed went a long way to raise rates which brought valuations in. So this could be the second year in a row international does better. Let's hope it does better because it goes up more than the US rather than down less, Rob. Yeah, exactly, but it is surprising and you touched on this a bit that, you know, as much as you and I talked about the fact that if we were grading on a curve, the US was in better shape than the rest of the world given geopolitical problems, COVID issues in China, not to mention just all the ongoing issues in Europe that we would have not expected international to outperform and yet it did and even despite where we find ourselves today, you think that could continue. Is that surprising? Yeah, to a lot of people it is but when you think about it's always versus expectations and China is now reopening its economy. That's at the margin better news. We were all concerned, not that we still shouldn't be, about shortage of energy and high price energy in Europe. Still an issue but less of a big deal than we would have guessed two months ago. They found alternative supplies, so far the winter's been warm, so less bad news can mean up stock prices.

Yeah, no doubt about it. Bob, what about the change in leadership of the house? How might that affect any particular sectors moving forward, especially energy? Yeah, I think that all that circus last week will be forgotten quickly to the average man on the street.

It's ho-hum, what have you done for me lately? But I think it's going to be tough to get, it was already going to be tough, now it's going to be tougher to get any noticeable legislation through. The margin of Republicans over Democrats in the house is minuscule and the other direction same thing in the Senate, so it's going to be hard to get stuff done. So I think it's going to be more of the status quo, Rob. Yeah, very good.

Last question, Bob. What is the key indicator you're watching to signal that inflation is coming down? Is it that next inflation report or do you look at some other factor?

Yeah, there are a bunch of them. The Fed's favorite is personal consumption expenditures, PCE. What does that look like? But the CPI is also important, the GDP deflator. Last week we got the labor results for the month of December and wage rates went up less than expected. So there are four or five of those statistics we're watching carefully.

Most of them come out monthly, Rob. Very good. Before we let you go, Bob, I know we're saying active management in a market like this is really critical, which is why I'm delighted to know that you've got some funds there at Crossmark. Which ones in particular are you overseeing? So large cap core, which is designed to beat the S&P 500 and did handsomely last year.

Large cap value, large cap growth style specific and an equity market neutral fund, which is an absolute return portfolio was up 9% last year up. Incredible. Well, you can learn more at crossmarkglobal.com. While you're there, be sure to sign up for the weekly Dolls Deliberations. Bob, thanks for stopping by, my friend. Happy New Year.

All right. And to you as well. Talk to you next week. Let's head back to the phones here in our final moments of the broadcast today.

To Florida we go. Hi, Sean. Thanks for calling. Go ahead, sir. Yes, sir. I have a tax question here. I have a IRA and I'm also a countryman, so my employer is 401k.

Yes. And I want to know how to reduce my taxes here. Well, the only thing that's going to reduce your taxes in the short term in terms of having an impact on your current year taxable income is the traditional 401k or IRA. That Roth is going to be an after tax contribution, so that's not going to do anything to reduce your current year taxable earnings. The benefit to the Roth comes way down the road in retirement where you pull the gains out, because remember what you put in has already been taxed, but the gains are all coming out tax-free. Whereas with the traditional 401k or traditional IRA, when you pull that money out, you pay tax on it as income. With the Roth, all those gains are coming out without any tax, but that doesn't help you at all in the short term.

So if you're looking for something to reduce your overall tax liability for 2022 in the case of a traditional IRA contribution for last year, which you can still do until you file your return, or for this year your traditional 401k contributions are going to do the most in terms of excluding a portion of your income going into those accounts on a pre-tax basis, and that's going to lighten your tax liability for the current year. Does that make sense? Yes sir, yes sir. Okay, very good.

That plus any charitable contributions as well, as long as you itemize, could help you there also, Sean. Thanks for checking with us, sir. God bless you.

To Indiana. Hi Ann, thanks for your patience. Go ahead.

Thank you for hearing me. Our son is 16 and he wants to buy his dad's car, so we wanted to try to help him build some credit. He has a job, he has money for the car already, but what we're wondering is, I know you say not to co-sign on loans, if it's a $1,000 to $1,200 loan to buy his dad's car, would that be beneficial for us to co-sign and let him build credit that way, or would you say it's still not to do that? Did I also hear though you say, Ann, that he actually has the money to buy it for cash, or does he need to take a loan either way? He doesn't need to.

He does. We just didn't know if this might be something to help, you know, start. Yeah, I mean certainly it could, but I don't like the idea of you paying even a dollar of interest that you don't have to, just for the purpose of building credit. Not to mention the fact that I don't love that example either, that if he has the ability to buy with cash that we would encourage him to take out a loan, because even though I totally get where you're at in terms of wanting to have him to have a good credit score and there's a variety of uses for him to have a positive credit score down the road, there's other ways to do it.

So let's, what are those? Well, one would be you could add him as an authorized user on any of your credit cards, but not give him the card. So he doesn't get access to it, but he just inherits your good credit as you all are on-time payers to any of your accounts.

The key there is if you have a late payment, that's also going to be reported. So just make sure you guys are, you know, being real responsible and timely with your own payments, but you know, that would be one way to do it. The second is he could open a secured credit card in his own name. So maybe he takes a couple of hundred dollars and puts it on deposit and then they issued a secured card against it and we teach him how to set up a budget and live on, you know, a spending plan and maybe one of those budgeted items is some small recurring charge. Maybe he has a streaming service that he pays for, you know, something that he's planned to spend his money on and it hits that account every month and then he pays it off. Well, every month that's going to be, you know, reflected on his credit report with him as an on-time payer and you could go to bankrate.com or nerdwallet.com and find out who has the best secured credit cards right now and use one of those.

You could also google something called a credit builder loan, which is for this purpose of building credit, but you get to keep essentially all of the interest yourself. So I would go with one or, you know, several of those options before I would take out a loan on a car that he doesn't really need to take a loan on. Does that all make sense? It does. I appreciate your time. Thank you. You are very welcome. And hey, if you stay on the line, I'd love to send you a copy of Howard Dayton's book, Your Money Counts.

Pass it along to him as our gift because I'd love for him to start learning God's way of handling money and this could be a great resource to do it. Maybe you guys work through it together a chapter at a time. Thanks for calling today. Stay on the line. We'll get your information and get that book out to you.

Thanks for checking and for being a great mom looking out for your son. Hey folks, thanks for being along with us today. My team, I couldn't do it without them. Jim Henry providing great research today. Dan Anderson, our engineer. Tahira Haynes producing today and Ryan Hansen handling our foes. This is a partnership with Moody Radio and Faithfi. We'll see you tomorrow.