Financially Faithful in the Busyness of Life

If then you have not been faithful in the unrighteous wealth, who will entrust to you the true riches? Luke 16 11.

I am Rob West. We're called to be good stewards of God's resources but being financially faithful amid the busyness of modern life isn't easy. Today I'll tell you how to stay faithful in managing your money. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial journey. Well, it's easy to feel overwhelmed these days and be tempted to take the path of least resistance with money. Maybe it's easier to grab a cup of coffee on the way to work than to make it yourself or to hit a fast food drive-thru rather than making dinner for the family. But those expenses add up quickly and before you know it, there isn't quite enough money left over at the end of the month to meet your obligations and you're charged a late fee.

It doesn't have to be that way. With preparation you can avoid it. First, carve out some time each week for prayer. Ask God for wisdom in managing your money.

James 1-5 tells us if any of you lacks wisdom, let him ask God who gives generously to all without reproach and it will be given him. Next, you need a spending plan. It's essential for managing your money faithfully. If you're not living on a budget, download the free Faithfi app in your app store. It has three different ways to set up a budget with step-by-step instructions and help from our team. The Faithfi app will also track your expenses so you stay on budget. Developing your budget will show clearly whether you have enough income to meet your expenses.

If you don't, there are really only two options. You can either cut your expenses or look for ways to increase your income. Trimming the budget may be easier so look at the categories where you spend a lot of money first. You may not be able to do much right away with your rent or mortgage but what about food? Groceries and eating out can gobble up a big chunk of your budget but planning can save you a lot of money.

Limit getting carry out to one to two times a month. Instead, draw a menu plan for the week. Make a list of the items you'll need to prepare those meals before you go to the store. Actually, shopping online for groceries can save you money because you're not tempted by impulse buying and you see the running tab of the items you choose. That will help you stay on budget by not overspending in your food category. Most of the bigger chains offer online shopping now often at no charge. Then look for other ways to trim your spending.

Are you still subscribing to streaming services you're not using? Can you form a babysitting pool with other parents or maybe look for free activities in your community? Every little bit helps. Once your budget is balanced, ideally you'll have something left over. This is also essential. Unless you can learn to live below your means, you'll be running up debt every month.

More on that in a bit. The next step in staying financially faithful is to take that leftover money, even if it's only a little, then begin saving up your emergency fund. You absolutely must have a reserve of cash to meet unexpected expenses.

Things outside your budget like a furnace needing repair or a medical bill. Start with a goal of $1500, then keep going, adding bit by bit. You'll want to eventually save 3 to 6 months living expenses in your emergency fund. It may take a long time and you will no doubt have setbacks along the way, but the peace of mind you'll get once you have your emergency fund in place will be worth the effort. Okay, I mentioned debt earlier.

If you have it, you know first hand that Proverbs 22.7 is true. The borrower is slave to the lender. Make a plan to get out of debt. You can split your leftover money, applying some to your emergency fund and the rest to paying down consumer debt.

Use the snowball method to speed this up. Pay all of your minimum payments, but more on the account with the smallest balance. When that's paid off, put your extra money on the next smallest balance. Rinse and repeat until the debt is gone. If you're having trouble meeting those minimum monthly payments, contact our friends at christiancreditcounselors.org to get on a debt management plan. They can get your interest rates reduced so that you can pay off your debt 80% faster. Once your consumer debt is paid off, you can turn to retirement savings. Strive to save 10 to 15% of your income in a tax advantage plan like an IRA or 401k. If your employer offers matching contributions, you want to do this as quickly as possible to take full advantage of that free money. All of these things are important, but perhaps the best way to be financially faithful is to remain generous.

Strive to be a percentage giver to your local church and then look to give sacrificially beyond it. All right, your calls are next. The number to call is 800-525-7000. This is Faith and Finance Live, and we'll be right back. Great to have you with us today on Faith and Finance Live.

I'm Rob West. All right, it's time to take your calls and questions today. We've got a few lines open.

The calls have been coming in, so we're about to dive in. The number is 800-525-7000. That's 800-525-7000.

We're going to go to Pelos Hills. Mary Ann, I know you called yesterday and didn't get through. I'm glad you called back.

How can I help? Well, thanks for taking my call. I got some money in a bonus recently, and I want to figure out the best use of it. I took out a car loan in September on a 2016 Honda, have a balance of about 24,000 on it and a payment of about 770 a month.

I got the loan through my credit union and they've told me I can re-amortize it to drop the amount of the payment if I want to do that. I've also got a regular IRA and a Roth IRA. I'm wondering if I should put some in there, some towards the note on the car or one or the other.

I'm trying to figure out the best use of about between $10,000 and $12,000. So the bonus was $10,000 to $12,000 and you owe $24,000 on the car, correct? Correct. Okay.

Do you have a sense, Mary Ann, of which you want to do? Here's the bottom line. This comes down to are both of these productive uses of this money?

Absolutely. The idea of investing is great. The idea of paying down debt is great. We can look at the financial side of this purely, but is there something in you that just really wants to see this balance on the car come down or are you truly wanting to know which is the most financially productive? Probably the more financially productive because most likely I'll be able to pay the car off with whatever, assuming God willing, whatever bonus I get next year in January, I could pay it all off if I wanted to. Or, you know, I've got some other potential funds coming in if I sell my house to use that to pay off the car note. I just, I'd like to get out of debt, but I also want to be smart about using what I have to increase my retirement savings.

Yeah, very good. And then if you don't mind me asking, what is your age? I'll be 60 this year. Okay. And do you have retirement savings in a 401k or something other than the Roth? I do. I have a Roth IRA and I have a regular IRA.

Okay. But you don't have a company sponsored plan like a 401k or something like that? They have a pension where I'm working now. It'll be a relatively small one, but I've got several hundred thousand between the, I've got most of it in the regular IRA and about 15,000 in the Roth, which is why I was maybe leaning towards putting some in the Roth. Yeah.

I like that idea for a couple of reasons. Number one, you don't have a 401k at work. You do have that pension and you've built up quite a nest egg and that's great, but I think your ability to continue to fund this Roth moving forward to have as much as you can available to supplement social security is going to help you. Number two, the market's down. So as you invest in perhaps more or increasing the investments you already had, you're buying at a discount.

And we like discounts when we go to the mall. We also should like discounts in the stock market because we're essentially with the same dollars buying more shares and those will recover if we have a long time horizon. And even at age 60, you do, if the Lord tarries and you're in good health, you need this money to last decades. So this is a great opportunity this year over the age of 50, you could put in $7,500. So if your emergency fund is fully funded, and I would define that as three to six months is I'd say take 7,500 of this 12,000 or so and go ahead and fully fund the Roth for this year. Let's participate in the recovery as the market increases.

Once we get beyond this recession or even prior to it. And then if you wanted to take the balance and put it on the car, that's great. You know, if you are going to be able to completely eliminate the $770 a month car payment, and then you could turn around and take that amount and start pumping it in every month into the Roth, that'd be great, but you're not going to help yourself from a cashflow standpoint by, you know, putting 12,000 on the car because you're still going to have that payment and it's at a low interest rate.

So I think fully funding the Roth, putting the balance on the car, and then trying to pay that off as you have additional funds makes some sense to me. Fantastic. I really appreciate it. Can I ask you one quick additional question?

Of course. I'm thinking of moving from Illinois to Tennessee and I'm sure you know, no state income tax in Tennessee. I'm wondering if there's any sort of residency requirement, if you happen to know, to be able to eliminate. So like if you were going to live both places, is that right? Well, I would move to Tennessee probably permanently and I'm thinking there's probably a six month residency requirement.

Yeah. Generally that is the rule, but you know, you have to be in the state for six months. When you're relocating there for the first year, I'm not sure if there's a particular, you know, way to get around that on an ongoing basis. Generally to establish residency in a particular state, you have to be there at least six months.

And I know a lot of folks from Illinois do that in the state of Florida because of the no income tax there. But for that first year, I don't know. We could certainly look into it, but I couldn't give you a definitive answer on that. Okay. All right. That's very helpful. Thank you so much. Appreciate it. You're welcome, Marianne. Absolutely. Thanks for your call today.

To Pennsylvania. Hey, John, how can I help you? Yeah.

Thank you for taking my call. So I recently received a nice inheritance and I tithed on that. And now that along with our regular tithes throughout the year comes probably to about the same amount as I typically earn in a year. So can I put if I put that on my can I do that on my tax deduction? Is that going to trigger an audit?

Well, you know, anytime you're making a substantial contribution that goes up above a certain threshold, and in this case, if that tithe is above, you know, all of your income for the year, first of all, you wouldn't be able to deduct all of it. But, you know, it certainly will make you more likely that you would have an audit anytime there's something kind of out of the ordinary like that. And if this appears to be too much, you know, they'll take a closer look at it.

Obviously, there's a clear explanation and there's no reason why, you know, you can't itemize if you go above the standard deduction, you know, for this year, which happens to be this year, I believe it's 27,700 for a married couple. You know, you can itemize that. And, you know, I wouldn't be terribly concerned about an audit. I mean, obviously, if you've done everything the way that, you know, you should you'll come out of that it should be fairly simple.

There's a logical explanation for this. But anytime you have a disproportionately large charitable contribution, the IRS will inspect that a little more closely. And the likelihood of an audit certainly is increased, although it's still, you know, a low percentage, given all of the tax returns that are out there. So it'd probably be being a good steward if I did put it on to itemize it, right? Oh, absolutely. Oh, totally. Yeah, there's no reason not to.

I mean, I wouldn't pay a dime more tax than you're expected to. And if you have the ability to itemize and you've made a large charitable deduction, I would absolutely take full advantage of that and not think twice about it. OK, perfect. Thank you. Thank you.

Absolutely. You are very welcome. And thanks for your call today. Well, folks, we've already covered a lot of ground and a lot more great questions to come.

We've got one line open at eight hundred five to five seven thousand. You know, as we think about managing God's money, we want to hold it loosely. But the goal is to be found faithful.

That is obedience in the same direction over a long period of time. How are we financially faithful? Well, we want to take our cues from God's word, not this world. We don't want to be caught up in the temporal materialism and greed and envy or some of the hallmarks of the cultural worldview of money. We want to replace that with a biblical worldview that allows us to operate as a steward with contentment, with generosity at our core and being faithful in the same direction over a long time. Let's do that together as we talk about your questions. We'll take a quick break and back with much more on Faith & Finance Live. Stay with us. Great to have you along with us today on Faith & Finance Live.

I'm Rob West. Hey, before we head back to the phones, have you checked out our brand new website at faithfi.com? That's faithfi.com. While you're there, I'd encourage you to take a look at the Faithfi app. I think you'll find it to be an incredible money management tool for you to build a spending plan, stay on track with your spending throughout the month, but also the Faithfi community where folks are posting questions every day, responding to each other, encouraging one another on their stewardship journeys. And in our content section, you'll find the best podcast videos and articles in biblical finance. Check it out today at faithfi.com. And to download the app or to learn more, just click on the app tab while you're there. All right, back to the phones to Birmingham.

Hi, April, how can I help you? Hey, yes, I was just curious. I have two old traditional 401ks from previous employers.

They've just been sitting there for a few years and I didn't know if I could just like maybe combine them and contribute to them and then also open a Roth IRA or is it better to just do one? Yeah. So are you at a new employer that also has a 401k? No, unfortunately, he doesn't offer a 401k. Okay. All right.

Yeah. So I like the idea of simplifying this April, reducing the number of total of the total number of accounts that you have by rolling these two 401ks into one traditional IRA, you would be able to combine them and then you would be able to also make future additional contributions to that. You could then open separately a Roth IRA. So you'd end up with two retirement accounts, you'd have the individual retirement account and then the Roth IRA as well.

And you could decide how to contribute to those moving forward. If you've got the bulk of your funds coming into the traditional because that's how you were contributing to the Roth, or excuse me, to the 401k, then I like new contributions going into the Roth, especially if you've got plenty of time before retirement. That gives you a tax free bucket growing as well so that if it makes sense down the road to pull from that, because let's say marginal tax rates are higher than they are today. Keep in mind the Tax Cuts and Jobs Act rolls off in 2025. So we're probably looking at higher marginal tax rates down the road. So having that tax free growth, and then pulling that money out tax free in retirement makes some sense to me.

So yeah, I think combining them into the traditional, then opening the Roth and then making contributions there moving forward makes a lot of sense. Okay, thank you so much for your help. All right. Thanks for going April to Florida.

Hey, Mary, thanks for calling. Go ahead. Yes, I'm a retired person. And I've rolled my 401k and my pension into an account in the bank. And I understand CDs have a good interest right now.

So I'm thinking about a CD. Are those insured by the federal insurance? Yeah, so typically, you'd get a CD from a bank and you would just want to make sure that it's FDIC insured. But in most cases, if you're getting a CD from a bank, they absolutely will be. Now, the other thing is, if I take money out of that CD, then that will be like taking the amount I need to take out. Or that would be taxable is what I meant saying. Yeah, so the CD would be purchased inside of an IRA. Is that right?

I don't know. Okay, well, when you rolled, well, there's both options. So you can buy it inside an IRA. You can also buy it inside a taxable account. But if you rolled a pension and a 401k over to your bank, you probably rolled those into an IRA so that that wasn't a taxable event. And if that's the money that you're in the account that you're looking to buy the CDs, then it would be inside that taxable environment. So you wouldn't be thinking about the interest as being taxable. All of that money is growing tax deferred inside the IRA, if that's in fact what you have.

But you're correct. As you take withdrawals or what are called distributions from a retirement account, then that would be added to your taxable income in the year of the withdrawal. So what I'm saying, if I take money out of it, I understand, let's say I do it for nine months, and then I have a short period of time I can take some money out.

And then it goes back into nine months again. Yeah, but see, the question is, is this all happening inside of a retirement account? So there's the account itself, and there's taxable accounts and non taxable accounts or tax deferred accounts.

And then there's the investments inside it. So if all of this activity, the buying of the CD, and then the redemption of the CD, and then the purchase of another CD, if all that's happening inside an IRA, because you rolled money out of a pension and a 401k into an IRA, and then you're buying and selling those or redeeming those CDs inside the IRA, then that's not taxable activity. It's only when you pull the money out of the IRA, not out of the CD, but out of the IRA, that it becomes taxable. Okay, well, I've already done my distribution for this year. I see.

Out of the IRA. Okay, and that's the money you're looking to put in the CD? No. Okay. All right, go ahead.

I'm using that to live off of. Okay. All right.

I have in the IRA, I want to put into a CD. Okay. All right. But I was a friend of mine said that after nine, I'm going to do nine months, let's say. And then I can take some money out if I want.

But then it goes back into nine months where I can't touch it again. Yeah. And are you wondering about the tax implications of that?

Well, if I took it out, yes, I think there's probably going to be tax implications. Yeah, for sure. All right, let's do this.

I'm going to hit a break here in just a moment. It's a CD. Okay. Yeah. No, that's right. So here's the kind of the bottom line is as long as anything that happens inside the IRA is not going to generate a taxable event.

You're correct. When it goes into the CD, you're locking it up for whatever that period of time is in the CD until the maturity. So you put the money in a nine month CD, it's in the CD for nine months. And when it comes out, it's now available to you, but it's still inside the IRA. So there's no taxes unless you were to make a withdrawal or a distribution from that IRA.

So as long as you leave it in, you could keep rolling it over into new IRAs, getting that interest paid to you inside the IRA, but it's not taxable to you unless you take it out. Hopefully that clears it up for you. Mary, we appreciate your call today so much and we can help you further. Don't hesitate to reach back out.

God bless you. Hey, we're going to take a quick break and we come back a lot more. We'll be heading to Tennessee. We'll talk about whole life insurance and then Charleston and Florida and perhaps your question.

800-525-7000. Stay with us. We'll be right back.

Hey, great to have you with us today. You know, my mentor, Ron Blue, the author and teacher, here's what he says about money. He says it's a tool to accomplish God's purposes. Well, that's right.

That makes sense. It's also a test. You know, if we look at Scripture, we see that, well, there's a lot to say about the fact that we can very easily accomplish God's purposes. And that's why we're here.

We're here to help you. We see that, well, there's a lot to say about the fact that we can very easily allow money to take God's rightful place in our lives if we value earthly riches over true eternal riches. And so we need to be on our guard about money being a test, but also it's a testimony to the world. Think about this. Our willingness to trust God when we have little and to share generously when we have much provides witness to an unbelieving world. So perhaps as you think about your money, think about it in that light.

It's a tool, it's a test, but it's also a testimony. And perhaps that'll change how you handle God's resources. All right, back to the phones we go. By the way, two lines open, 800-525-7000 to Tennessee. Hey, John, thanks for calling, sir. Go ahead.

Yes, thank you. So I've seen a lot about getting a whole life insurance policy to be able to transfer wealth and also be your own bank. And, you know, all these things that sound really good, but I really don't know how it makes sense.

I'll have about an extra. I'm 50 years old and I haven't done well with retirement. And so I didn't know if I have about an extra $500 a month to put into some sort of an account.

And I didn't know if this was a good means to do that. Yeah. So do you have a retirement plan at work, John, that you're funding?

I do have a 401K that I match up to the six percent that they do the company match. But I think I'm a little too late in the game. Yeah. Yeah. So you're trying to play catch up.

I think the key here is just to be systematic in your contributions. How much have you been able to put away in that 401K at this point? There is about $45,000. OK. And how far away is retirement and your best guess? Well, I'm 50 years old and I also have young children, so I'm probably realistically 70 or 20 more years. Yeah. All right. So you got time on your side and I realize you feel like you're a little behind.

And, you know, from the kind of benchmark standpoint, I would agree. Doesn't mean we need to get more speculative or take more risk. It just means we need to keep our lifestyle in check, try to reduce debt as you're able. If you hit retirement at age 70 and you haven't taken Social Security and you've let that grow beyond full retirement age, you know, probably 25 percent more than what you would have gotten at full retirement age. Your house is paid off. You're completely out of debt. And you've spent this next 20 years diligently saving.

I think that's really the key for you. I love that you maxed out the matching portion of your 401K. I would say the next option would be let's go ahead and fund a Roth IRA. You can take that 500 a month and drop it right into a Roth. The other option, if you want a little less complexity, just because in the Roth you're going to have to pick the investments. And if you don't want to have to do that, you could just add more to your 401K. Just have them up that percentage. Because really the goal that we want to get to on that 401K is not the 6 percent they're matching, but really we want to get probably closer to 15 percent as you're able to. Now, I realize that's not easy and you've got kids and there's a lot of expense there.

And so, you know, you're just trying to do the best you can and that's fine. But as you're able to, I would try to boost those 401K savings. But yeah, setting up an automatic contribution to a Roth would be another great option. If you wanted to do that, I'd probably just use an index fund or a high quality mutual fund that's just going to give you good growth over the long term.

And don't watch that statement every month, but just make that automatic contribution. And you'll be surprised between your 401K and the Roth, over the next 20 years you'll be able to build up quite a bit of retirement nest egg. Is the whole life, life insurance policy, is that not a good investment? It's really not. You know, I would rather you just focus on having the right kind of term coverage, which is, you know, the whole life is about 6 to 10 times the cost of a comparable term policy and it just adds complexity. Plus, you're not going to get as much upside as you would just investing straight in the stock market. So, the fees and the complexity and the additional cost, I think for me, I would rather you do your saving outside of the insurance product and just use the insurance policy purely for what you need it for and that's the death benefit.

And the most cost effective way to get the death benefit your family needs is through term insurance, not whole life. Okay, that makes sense. Thank you. Alright, thanks for your call, John. We appreciate it.

Let's head to Charleston. Hey, Ryan, how can I help you? Hey, hope you're doing well today. Doing great.

So, I have about $1,800 of surplus income per month and I'm trying to figure out whether or not I put that into an IRA, maybe a Roth or towards savings. Okay. Essentially, go ahead. No, that's fine.

Go ahead and give me the rest of the story. Okay. So, I currently max out my 401k contributions and I am using a HELOC for an emergency fund as I'm $110 that I will be turning.

It is for my primary residence that I will be planning to rent out at the end of the year and will not have housing costs for the next two years when I go to Germany. Cool. And have my company pay for it. Excellent. Okay. So, the extra surplus is going to come in the form of lower expenses because your company is going to pick up most of your living expenses. Is that right?

I already have a surplus of $1,800 a month that I need to figure out whether or not to put it into savings or should I be investing it while the market is down. Got it. Yeah.

And so, is that surplus going to go up when you move to Germany? Yes. Okay. Great. And what do you have in liquid savings right now? Anything? About $10,000.

Okay. $10,000 in liquid savings. And obviously, you're living modestly because you've got quite a bit of surplus here. I think you've got a couple of options.

I mean, you don't have any debt right now because all you have is a line of credit with a zero balance. Is that right? Correct. Yeah.

So, you're in a great spot. I mean, it sounds like you're young. What is your age? Twenty-nine.

Okay. So, you're 29. You're about to have this rental property. You're maxing out your 401k. You've got plenty of surplus income that's only growing. I think you're in a great spot to not only continue to save but also to begin to accelerate your giving because there's a real opportunity here for you to think about what God is doing and where you're passions are and align some of this with that, with his activity. But beyond that, I think given that you've maxed out that IRA or excuse me, the 401k, I think the next option is to in fact fund that Roth, especially as you said, while the market's down.

It's a great entry point for you. And that's really the only other place that you can invest on a tax advantaged basis apart from an insurance product and I wouldn't do that. So, I think you're going to obviously fund that fully with this surplus in a very short period of time. So, I'd probably start by funding last year. So, you could put in 6,000 for 2022 prior to filing your return and then you can start working on the 6,500 that you can put in this year. Beyond that, you're on track with I would say all of the savings goals that you have. So, at that point, it's just a matter of continuing to keep your eyes open and say, do I have other goals like purchasing another property, maybe when you get back or do I want to accelerate my giving?

I think either of those would be great options beyond the Roth IRA and the 401k. Hey, congrats on making some great choices here, Ryan. Thanks for calling today. We'll be right back. Stay with us on Faith and Finance Live. Thanks for being with us today on Faith and Finance Live.

I'm Rob West, your host. Hey, are you a part of the Faith Five family? You count on this program, you listen to it, maybe not every day, but most days you found some value in the biblical principles we share. Well, we'd invite you to be a financial supporter of the ministry. You can give securely online or find the address to mail a check or even a toll-free number to call our team and make a gift. When you head to our website, faithfive.com, just click the Give button.

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Again, head to our website, faithfive.com, and just click Give. All right, let's head to the phones. Lakeland, Florida. Elle, thank you for calling today. Is it beautiful in Lakeland today? It is. It is very sunny and nice, and thank you for taking my call. You're welcome.

How can I help you? I was wondering what advice you have for a 26-year-old wanting to save for a house in three to five years. And I could give you more information on the assets and stuff, but basically I'm just wondering what would be good to invest in or how much to set aside for that.

Yeah, I love that question. So you're 26. You've set a goal to buy a house in three to five years. And are you planning to stay there in Lakeland, Elle?

Probably around this area, either Tampa, anywhere Tampa to Auburndale area. Got it. Okay, very good. So there's two kind of targets that you're going to want to set. The first is that down payment. And if you listen to this program, you know that I'm going to want you to have at least 20% to put down. And then the other piece is you're going to want to look at what the mortgage payment is going to be, including taxes and insurance on the mortgage that you end up with. So you buy the house, you put 20% down, you've got an 80% mortgage on the property, and we want to make sure that that payment, including taxes and insurance, is not more than 25% of your take-home pay, if possible. And what that's going to do, Elle, is really help you to make sure that you've got enough left over for you to cover all of your other expenses. Not only those things you get a bill for, but the things that are non-recurring that maybe come up a few times a year or quarterly, like your car insurance, but also that you've got some margin left over because that's what's going to help you to fund your other goals. Maybe it's saving for retirement or some other goal that you have, replacing an automobile down the road, that kind of thing.

So give me a sense of whether you've started to look at houses and how much you think you can spend, and then that's going to help us determine what will your goal be for the down payment, and then we want to make sure that that mortgage payment is not more than 25% of your take-home pay. Okay. Well, thank you.

I'm in the very early stages. I felt like it was put in my heart to start thinking about it. Yeah.

I love that. So I don't have those numbers right now. I do have a sum saved up in the bank that I could put towards... I have a good amount saved up in the bank that I could put towards something, and I just didn't know if for now, since I don't have those concrete numbers, should I be putting them in something that gains more interest so I'm not losing money on what I already have? Yeah, that's a great question. I'm very, very early in that process. Well, that's great. I mean, you want to start early, so that's a good thing because it's going to take you some time to get up probably to that ultimate savings goal.

I think you're right. You do want to put it into an interest-bearing savings account. I'd probably use L1 of the online banks.

So even if you're checking accounts at a brick-and-mortar bank locally there in Lakeland, you could open an online savings account and then link it electronically to your checking, maybe at Capital One 360 or Marcus or Ally Bank, one of those. Those are all going to pay like 3.5% in the way of interest and maybe even a little bit more. And the great thing is there's not going to be any fees for those.

So literally 100% of what is going to be right there, it's safe. You can earmark it for that down payment and you're going to earn a little bit of interest along the way. And then I think the next step is for you to start looking around and getting a feel for what the home or the condo that you want to buy is going to cost.

Look at the size homes and condo that represent the amount of square footage you would want and the location you want. And let's say you figure out that it's going to cost you $300,000. Well, you're going to need $60,000. If it's going to cost $200,000, you're going to need $40,000 for a down payment. That's going to give you a good sense of kind of what your savings goal is. And then you can get online and get a mortgage calculator.

If you just Google mortgage calculator, you'll find 100 of them free and you can figure out, okay, if I buy a $200,000 home and I put down $40,000, now I've got a $160,000 mortgage and it'll show you based on today's interest rates what your payment would be and it'll even estimate the taxes and the insurance based on the zip code. And then that will let you know, okay, is this payment something that would be 25% or less of my pay? And if so, then you're headed in the right direction. And if not, then maybe you need to regroup a little bit. Does that make sense? Yeah, that definitely makes sense. And I don't know, this is very much an amateur question.

I am positive. I would very much like to save up enough to not have that much debt on it. I think I'm heading towards a place where I could comfortably make a down payment, which is good. Would you still recommend the same saving method if I wanted to save as much extra as possible to purchase with it as minimum debt as possible?

I would. And the reason is because of the time horizon. So anything that's less than five years, especially if it could be as soon as three years, I don't want you to put that at risk. So I don't want you to invest in the stock market because you may find that you're ready to go and buy that house.

You find the perfect one and then the investments you bought are down and now you've got to sell them at a loss. So the time horizon says we need to have this really protected, which means savings account. Now, if you want to have a little more interest, you could put it into a CD. So let's say you had 10,000 today and you said, you know what, I want to go ahead and lock that up in a 15 month CD because now I can get four and a half or four and three quarters percent instead of three and a half in a savings account.

You could certainly do that, but I'd stay in either a savings account or a CD just so your money is protected and it's ready when you need it. Okay, perfect. Thank you so much. I think that gives me a lot of insight and what to look into and also some reassurance that I feel like I'm on the right track. You absolutely are and I love that you're already thinking, Elle. I mean, here you are at 26, you're thinking about buying your first house and you're saying, yeah, 20% is great, Rob, but I want to do a lot more than that down.

And that's great, right? Because you want to get out of debt, which is exactly the way that you should be thinking. And if you have the ability to do that and you can keep your lifestyle in check and continue to save and make that house purchase, man, you're never going to have that weight of having too much house with a mortgage payment that's going to put some stress or strain on your financial life. You certainly don't want that and you're headed in that direction. Hey, you stay on the line. We're going to get your information and I want to send you a Ron Blues book, Master Your Money, that I think will be a real encouragement to you. It's our gift to you. And thanks for calling today, Elle. God bless you.

Let's head to West Palm Beach just south of where Elle's at. Hi, John, how can I help you? Hey, Rob, thanks for your time, man. I really appreciate it.

Absolutely. So my wife and I, we've been married like 36 years. We're finally empty nesters, enjoying it. But unfortunately, you know, we're trying to play catch up right now. We've been in debt most of our life, I guess.

You know, you know how it goes raising kids. Yeah. But we've been able to catch up pretty good the last three years. I'm currently in one of those target funds. I'm in a 2030 target fund, which is supposed to kind of transition over time, I guess, as you get closer to that number.

But this last year, I mean, we we got absolutely hammered. And I feel like now, you know, I may need to work another three or four extra years just based on the hit that we've taken last year. Yeah. So I guess my question is, you know, should I just stick it out and pump more money into this thing?

Or should I look at another avenue as far as investing? Yeah. What is so you say how far are you away from retirement based on what you know today? Probably about eight to 10 years, I'm guessing. Okay.

All right. So you've got eight to 10 years and you're in a 2030 fund. So you've probably got as much as maybe 60 percent in stocks. Is that right? 40 percent in bonds?

Yeah, I think it's like 65, 35, something like that. And then it kind of every year it kind of switches, you know? Yeah. Yeah. I would wait this out, John, if it were me. I mean, ultimately, you're the steward.

You've got to make that call. But I would say, you know, given that you're a minimum of five years out from retirement, you know, this market is going to recover and it's going to recover ahead of the economy in all likelihood. Once we know that the Fed is done raising interest rates and clearly we're not to that point yet. But when we are, there's literally trillions of dollars on the sidelines going to come rushing back into this market. And I have a feeling we'll make new highs in a pretty short period of time. It doesn't mean we're going to have a raging bull market. I think we're entering into a period where it's going to be more modest gains than we've seen over the past decade. But we will recover over time. And I think as you recover what you lost, that's then the time to say, OK, given where I am in proximity to my retirement, now's the time to get more conservative, because if we go through another one of these, I don't want to have to wait for the market to come back.

So I guess if it were me, I say stick it out until you at least recover what you lost. And then that's the time to begin getting more conservative, perhaps switching to a 2025 fund or something maybe even more conservative than that if you wanted to. OK. Does that make sense? Excellent.

Yeah, it does. I appreciate your advice. Thank you. Absolutely. I think the key is I just don't want you to lock in those losses. And then here you are two years from now and the market's recovered and you're thinking, man, I wish I had that money back. But at the same time, I want you to really tune into the fact that you felt like you were too aggressive just based on what you lost.

So when the time comes, let's start moving to a more conservative posture so you're ready to weather the next downturn because they do come in cycles. I appreciate your call today, my friend. God bless you.

Sarah, I'm sorry we didn't get to your question. I know you want to gift your home to your pastor, which is amazing. You know, it can be as simple as adding him to the deed, which you could do very simply. And you can establish a new deed for that.

But I would check with a real estate attorney just on that and let him know what you're looking to do. And they'll tell you exactly the most efficient way for you to do that. We appreciate your call today. Folks, that's going to do it for us. We covered a lot of ground. Always fun being along with you. On behalf of my team, Gabby T., Robert Sutherland, Amy Rios and Dan Anderson, I'm Rob West.

Faith in Finance Live is a partnership between Moody Radio and FaithFi. I hope you come back and join us tomorrow. I'll look for you then. Bye bye.