Avoiding Student Debt

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The following program was prerecorded, so our phone lines are not open. Proverbs 22.7 carries a grim warning about debt. The rich rule over the poor, and the borrower is slave to the lender. Hi, I'm Rob West. Nowhere is that more true than with student loan debt, now just over $1.75 trillion.

But you don't have to be a part of that statistic. Today, I'll talk with Howard Dayton about how you can avoid it. And we have some great calls lined up, but we won't be taking your live calls today, because we're prerecorded. This is Faith and Finance Live!

Biblical wisdom for your financial decisions. Well it's always a joy to welcome Howard Dayton back to the program. He's not only the former host of this program, but also the founder of Compass Finances God's Way and a great friend. Howard, delighted to have you back with us.

Great to be with you, Rob. Howard, you've written about student loan debt in the past, and you've come across some numbers that should make anyone think twice about falling into that trap. So why don't you start there?

Sure thing. It's really stunning. According to one survey, college graduates are now spending a whopping 18% of their salaries on student loan payments. And get this, 60% of them expect to make payments on their student loans into their 40s.

But it even gets worse, Rob. The survey also found the average student debt for millennials is more than $41,000, and a third reported being clueless as to their loan interest rate. And what's more surprising is that many aren't willing to adjust their lifestyle to pay off their student loans more quickly. For example, less than half of those surveyed were willing to cut what they spend on eating out and entertainment. And the last big discovery of the survey, one third of the grads said they would have skipped college in the first place if they'd known how expensive it would be in the end.

Oh, yeah. And a lot of folks who didn't graduate probably feel the same way, wishing they hadn't taken on this debt and then getting a degree that could lead to a better paying job because they're still unfortunately stuck with those payments. All right, Howard, well, you've come up with five ways that students and their parents can keep from drowning in student loan debt.

So why don't you dive in? Well, the first one, Rob, is to start preparing early. Urge your high school aged kids to take dual credit classes that will count toward college credit. I know of one couple, 17 year old son, this is unbelievable, who graduated from high school having earned 90 college credit hours. So when he enrolled in college, he'd already completed the first three years of his college for free. I love it.

And we're experiencing it now. My oldest is headed off to college next year. He's going to start halfway through his sophomore year because of AP and dual enrollment.

It's incredible. All right, Howard, what's next? Another option is to enroll in the local community college the first two years to complete your general classes or to work full time and take online college classes, which are typically much less expensive. Yeah, that is a great option folks need to look into essentially killing two birds with one stone. So you're reducing the overall cost of college while working and saving for future college expenses.

All right, how about number three? Secure as many grants and scholarships as possible by investing the time to research every possible opportunity. Yeah, my wife Julie is the poster child for that over $100,000 in scholarships coming out of a single family home, she was able to pay for college completely debt free.

It's a huge blessing. All right, Howard, another way to avoid student loan debt? Well, encourage your children to work full time during the summers and part time at college after their first semester.

You know, that first semester, they should focus on getting acclimated to the college routine. But after that, they can look for part time jobs, and then apply what they're earning toward their college costs. All right, one last way to avoid student debt Howard?

Well, this may be the most important one of all. Parents need to start saving early to help their kids to pay for college. And the 529 education saving plan is a great way to do that.

And you can encourage grandparents and other family members to contribute to it with cash gifts for Christmas and birthdays. I love it. All right, that was five.

Does that round us out? Well, I do have a bonus suggestion. And I can't stress this one enough.

Don't cosign for your children's student loans or take out any loans yourselves. All right, great advice, Howard. Always appreciate you stopping by, my friend. God bless you. My pleasure. Love the time, Rob. All right, folks, I hope that was an encouragement to you.

I know it was to me. You can do this. You can pay for college without going into debt.

You may have to get creative and plan ahead. That was Howard Dayton, founder of Compass. Finance is God's way.

You can read more of his wisdom at compass1.org. All right, we're going to head to a break, so don't go anywhere. Still a lot more to come, even though we're away from the studio today and you shouldn't call in. We have some great questions that you're really going to enjoy as we continue to apply God's wisdom to your financial decisions. We'll be right back. This is Faith and Finance Live with Rob West. Hey, if you hear a phone number mentioned today, please ignore that number and don't call us, because today's broadcast was previously recorded. But we think the upcoming information will help you and make you a wise steward of what God's given you.

So please stay tuned. My friend Ken Boa says there's five things we all steward. Time, talent, treasure, truth, and relationships. Let's talk about how we steward God's treasure today. And when we do that in a manner in which it's aligned with his heart and his word, well, we're abiding in Jesus and worshiping him through our stewardship. That's what we do on this program every day.

Welcome to Faith and Finance Live. I'm Rob West. Sharon, you'll be our first caller. I understand you have a comment in Ohio.

Go right ahead. Thank you for what you do. You help a lot of us navigate these choppy waters these days.

Well, thank you. Years ago, when my sweetheart and I got married, I'm very, very, very frugal. And so that was good for us, but sometimes too much so. And occasionally when I worked real hard to save money in the household budget by using coupons running all over town, getting a good bargain, etc. And I would have just enough saved out of the budget to get the new tissues for the kids or whatever. But my husband would look at them and say, oh, I've got enough money to get my new tool for the garage.

And without saying anything, go get it. Needless to say, this created a lot of strife and discontent. I can imagine. And I had a lot of little businesses at the time. I did catering.

I did all kinds of, you know, anything for a buck that I could still stay home. I was homeschooling our kids. And so we found for us, there was no lack of unity by having separate checking accounts.

Matter of fact, it brought a whole lot of unity because it was real clear then where our boundaries were. And I only put enough money out of our budget in there to cover household goods. You know, the groceries, the kids, all the stuff that came day to day. And then I also managed my small endeavors out of that.

And it was easier to keep the records for the schedule fees at the end of the year and stuff. You know, sometimes sometimes separate isn't bad. It helps keep sanity.

Yes, ma'am. Well, I certainly appreciate that perspective. I think at the end of the day, we know God's heart and that's for unity. And that comes through open and honest and regular communication, right?

Jointly set goals, course corrections together, talking about our values and priorities and what that looks like as we make day to day decisions with God's money, but also each of us having our own personalities and wiring and interest and hobbies reflected in the spending plan as well. And whether you do that in one account or two, that's really mechanical. I think that's how we live this out on a daily basis, which is less important than ultimately coming together, two flesh becoming one in this area of marriage. My experience is the separate accounts fosters a little bit more mine and yours and doesn't drive toward unity. But at the end of the day, Sharon, if that's what works for you all and does, in fact, as you said, promote unity, well, then that's a mechanical endeavor.

And I think that's perfectly fine. Clearly, based on your testimony, it worked for you and your husband. And you've been able to work together in this area and glorify God in the process. I think the question is, we just have to be willing to back up and say, are we fostering an environment that's not bringing us closer together and really driving toward communication? You know, one of the things my friend Chaunty Feldhahn, the researcher from Harvard found in this study on money and marriage when she wrote the book Thriving in Love and Money, is that 70% of married couples have conflict over money.

That's probably not surprising. We know it's a common source of conflict. But really, the two things that were key to overcoming that conflict, number one was margin. So it wasn't a matter of how much income they had, it was that they were living below that income, whatever it was, and having that margin was key to overcoming conflict.

But number two, and you won't be surprised by this one either. It was communication. And so we've got to be talking about our finances regularly setting those goals together, starting with our values even before the goals and then getting to a spending plan that reflects that. But at the end of the day, how we handle that mechanically, I think that's up to us. And we have to work on a plan that makes sense for us as a married couple. And clearly, you all made that work for you, right? Yeah, we did. And we also talk clearly about things. Like, for instance, when we homeschooled the kids, that wasn't just my decision.

I felt God calling me to it. But I think both parents have to be in agreement that's the best course of action. And initially, my husband was of the mindset, oh no, we'll somehow manage, we'll figure out how to do it. Let's look at private schooling. But we could not afford that.

There was no way. And even the cost of homeschooling, it costs thousands of dollars every year to get the best resources you need to help you along the way. It's not cheap.

People think they can do that for free. That is a mistaken notion. And we were doing it in the timeframe we lived in Texas. When it was difficult, you had to fight for your right to teach your own children. But we did, and it worked out well.

They're all well-educated and doing quite well in life, and have good, solid families. So I do not regret one minute I spent that way. But I had to find ways to make money out of my home, rather than going to a job. But God gives you what you need. When you're obeying Him, He will bring you what you need when you need it. I've learned to trust Him during those years. What I saw as impossible, that we didn't have the man for, that I felt God calling, I would pray, I'd say, well, am I crazy, Lord?

I think you want me to do this. Yes. Well, we see that clearly in Proverbs 31, don't we, Sharon? The Proverbs 31 woman was very industrious.

And she was managing the affairs of the household, she was working, she was down at the city square, she was working on her property. And so we were created to be workers, both male and female, husband and wife, unto the Lord. And we've got to determine before Him what that looks like for each of us. But clearly, you're an amazing mom and wife, and I appreciate your testimony today, Sharon, about money and marriage and how we can do that in a way that honors the Lord and works for us as a married couple. God bless you, and thanks for listening today. To Louisiana, Chad, you'll be our next caller, sir.

Go ahead. How you doing, Mr. Robb? I was a little off subject today, but I was calling, had my social security number stolen, and I was wondering, where do I go to try to get this fixed and taken care of?

Yeah. Has that shown up anywhere, Chad, in the form of a fraudulently opened account on your credit report? Do you have any reason to believe any of your financial accounts have been compromised, or are you just aware that the number is now out there? Actually, a policeman from up north called and was asking because someone tried to purchase a vehicle in my name, and I started looking at my credit store, and it's dropped almost 200 points.

All right. So a couple of things I think you need to do. Number one is notify any companies that you work with of your stolen identity. I would get all three credit reports pulled at annualcreditreport.com from Experian, TransUnion, and Equifax, just to see if there's any accounts on there that you don't recognize that have been opened in your name, and if so, you're going to want to contact them immediately and let them know that that's been done with fraud. I'd contact your local police department to file a report on that. I would also freeze your credit.

That's going to put a PIN number on your credit report that's going to make sure nobody can open any new accounts without that number. Let's talk a bit more after the break. I have a few more ideas I want to share with you.

I know this is frustrating. More to come on Faith and Finance Live! Biblical wisdom for your financial decisions. Hey, it's great to have you with us on Faith and Finance Live!, but today we are prerecorded, and we won't be taking your calls. However, we've lined up some calls in advance that we think you'll find helpful, so stay tuned and enjoy the rest of the program.

Back to the phones to Louisiana. Chad, before the break, you were sharing that you got a phone call from law enforcement in another state indicating that someone had attempted to open a fraudulent account in your name. Obviously, that's concerning. Just to recap what I shared and then maybe some other ideas. Number one, make sure that this attempt to notify you of fraudulent activity isn't fraud itself.

And here's what I mean by that. Somebody claiming to be protecting you might ask you to verify certain things or provide information. Never do that with an unsolicited phone call. Now, hopefully they didn't ask you to confirm your social security number or something like that that would be fraud in and of itself, but just be careful there. If in fact it is legitimate identity theft or fraudulent activity, as I said, you want to go to ftc.gov and file a report with the Federal Trade Commission. It's probably good to have a police report on file. And so whether you do that with your local police department or this police department out of state, you could certainly do that. You want to get all of your credit reports immediately at annualcreditreport.com.

That's free. Each of the three bureaus. What you're looking for is mysterious accounts, accounts that you don't recognize that may have been opened in your name so you can dispute them and get that taken care of. Place a fraud alert on your credit reports. That's just a notation that is going to allow anybody pulling your credit to see that there's been recent fraud activity. Place a freeze on your credit.

This also is free. It's just a PIN number that allows, you know, it prevents someone from accessing your credit file for the purpose of extending credit to you without a PIN number, which would stop a fraudster in their tracks. Just a few other things. You may want to sign up for a credit monitoring service just to monitor changes in activity. Given this, I normally wouldn't recommend that unless we know that there's fraudulent activity. Something has happened recently. And then I would change your passwords on all of your financial accounts.

Also review your credit card and bank statements for any unauthorized charges. I know that's a lot, but those are really the key things. Does that make sense? Yes, sir. Thank you so much. All right. Listen, all the best to you. You'll get through this. You know, it's happening unfortunately to millions and millions of Americans, so we've just got to make sure we're on top of it. And you know, this is more and more common all the time, but I appreciate you checking in with us, Chad.

God bless you. By the way, Marilyn called and wasn't able to hold, but she wanted to know how to get an amortization schedule. You know, mortgage interest is amortized interest, which basically is a schedule of payments that determines for the life of the loan with that fixed payment that doesn't change what portion is going to interest, what portion is going to principal in the early days, far more going to interest, much less going to principal in the latter days that flips.

She wants to know where she can run that schedule. Oftentimes folks are saying, if I'm going to send extra, how is that going to affect how quickly this mortgage is paid off? Or if I want to pay it off in a certain timeframe, how much extra do I need to send? The good news is there are free mortgage calculators all over the internet. If you'll just, you know, Google mortgage calculator or amortized interest calculator, that will give you a whole host of calculators, Marilyn, where you can plug in the variables you're looking to solve for. Again, whether it's a payoff date or a certain amount extra per month and how that's going to impact the payoff.

The other option is you can call your mortgage servicer and ask them to run an amortization schedule for you based on the variables you would like to present to them. And they can do that for you, but you can have some fun playing with those calculators online. Again, there's hundreds and hundreds of them. They're all free.

Just Google that or whatever web search engine you use and you'll find them. If we can help you further, let us know. Alright, let's head to Louisiana. Steve, thanks for calling, sir. Go right ahead.

Hey, brother, bless you. You gave me so much good financial information, but I got a question. I want to give some money to my children and grandchildren, but I don't know what is the maximum amount that you give as a one time gift and can it be to is that one time gift for one person or can I do it for my grandkids and my kids?

Yeah, yeah. Good news here is you can pretty much give as much as you want. The rule is from the IRS, you can give anyone a gift of $17,000 or up to $17,000 each year based and that's the number as of 2023 without having to file IRS form 709. So you've got you can go up to 17,000 and that's for as many individuals as you want.

Grandkids, kids, friends, family, whoever that might be. Now, if you go above 17,000 in this calendar year 2023, you still don't have to pay any tax on it. There's not any problem with that.

You would just have to file form 709 with the IRS because that's going to then chip away at what they call your lifetime exemption for gifting, which sits today at $12.06 million. So you got a long way to go before you're bumping up against that limit. It's just you're going to have to report it to the IRS if you go above 17 for any one individual. Does that make sense?

Oh, yes, it does. So you're telling me my three grandkids, I can give them each of them and they can put and then the in their name and the parents can put it in a deal for college or whatever. And then for each child, I can give my kids I can give one so I can do that. And it's up to $12 million, correct? For the life for your lifetime or up to 17 in any year per person.

And you don't even have to tell the IRS at that point. Thank you so much, brother. You always come through for me. Hey, Steve, you sound like a generous man and taking care of those kids and grandkids. I love that you're thinking about funding college and what a blessing for you to be in their life and serve and support them in this way. God bless you.

Thanks for your kind remarks about the program as well. Before we head to our break, you know, as I read scripture, I see this big idea jumping off the page around contentment. You know, I think as we consider our role as stewards of God's money, we need to foster this attitude that the Apostle Paul talked about, and that is contentment.

Remember, he said that it's learned. I've learned to be content. He was in a time of plenty and in a time of need, and he learned to be content in either of those. Contentment is a choice.

And when we increase our contentment, well, then we can focus on what God has given us and not on what he's given others. I hope that's an encouragement to you today. Again, we're not here today. We're away from the studio, so don't call in. But just around the corner, we have some more questions to tackle. I know you're going to enjoy the calls we have coming up. Stay with us.

We'll be right back. You know, as we think about managing God's money and it's all his, we're stewards. We need to develop an eternal, not a temporal perspective. Matthew 13, 44 says, the kingdom of heaven is like treasure hidden in a field, which a man found and covered up. Then in his joy, he goes and sells all that he has and buys that field. You see, when we view our earthly wealth with a biblical worldview, we begin to value eternity over our present reality.

When we realize that eternity is our purpose and that God is enough, we can be content no matter our circumstances. You see, the Bible tells us very few can handle riches. Money is not the root of all evil. It's the love of money. So we need to understand that God owns it all. We're stewards.

Money is a tool. We need to hold it loosely and give it generously. And that's the key to growing in intimacy with the Father as we seek first the kingdom, not the things of this world, but the eternal. And when we have that eternal mindset, well, that perspective shift is going to determine our behaviors. And ultimately, that comes by maintaining and spending daily time with God. So perhaps we need to think about renewing our minds and counteracting the messages of this world when it comes to managing God's money.

Hi, I'm Rob West. This is Faith and Finance Live. Again, we're not here today. Our team is away from the studio, so don't call in. But we've got some great questions coming up. In fact, let's go to one of those right now. Let's head to Ohio.

Hi, Jim. Thanks for calling, sir. Go ahead. Thanks for taking my call. Sure. Okay.

I have hopefully a simple question. My wife and I are both retired, and we are social security, and we are tax-exempt from filing taxes because of our income. And she has a part-time job recently with LifeWise Ministries. So we're filling out our W-4s, marking them as tax-exempt. So when she, on her pay stub, basically, noticed there was no withholding for federal and state, which is correct, but there was a small amount still for the city, and they did also withhold some social security and Medicare. Is that normal? Yeah.

Yeah, absolutely. FICA taxes will always be withheld if you have earned income from an employer. The same is true if you're self-employed and have annual earnings over $400. The total withheld, if you're an employee with W-2 income, your employer will pay 6.2% of that. You'll pay 6.2. And then there's 1.45 that you would pay for Medicare.

But you can't get around that. Now, you may end up getting some back if you don't make a whole lot, but those FICA taxes are always going to be withheld out of the paycheck. Yeah. So theoretically, it adds to the amount that we're entitled to later. Yeah. And the city will always get their tax money then, correct? That's right.

Yeah. And again, in your filing, you'll be able to true all of that up at the end of the year. But you did your part in answering the W-4, filling that out correctly and having as little withheld as possible. But they're still going to do those FICA withholdings regardless. Yeah. And like I said, our income is such that we don't have to file income tax unless it would exceed a certain amount.

So you wouldn't get the city tax money back anyway, as far as I remember. That's correct. Okay. All right. I just wanted to double check that because I couldn't get straight answers on our end. So I thought I'd call you.

Well, I'm so glad you did. Jim, listen, all the best to you guys. Thanks for listening to the broadcast and let us know if we can help further along the way.

Eight hundred five two five seven thousand. We've got some lines open to Oregon. Hey, Betty, thanks for calling. Go right ahead.

Thank you so much for taking my call and for all that you do. And my question is, is it does it make sense to instead of putting money in a CD that is like, whatever, 12 months, 15 months, two years, invest in Treasury bills for a short term at the interest rate is like four point five, four point seven. And they're short term and you can reinvest them. Is that you think a prudent way to go in terms of holding the money up for that length of time where I could just do it in the short term?

Yes, ma'am. I think that's a great idea. As long as you're willing to stay on top of that and keep those invested. Obviously, those are considered risk free because they're backed by the full faith and credit of the United States government. And, you know, generally, T-Bills offer fairly low returns, which, you know, the opportunity cost always comes into question as to what could you be doing elsewhere.

But given where rates are now, you can earn a fairly attractive rate without any risk. And as long as you're willing to maintain that and roll it over, you know, I think that's a great opportunity for you. Okay. All right.

Because I think I just want to get somebody else's opinion because I just I'm not sure. So I appreciate that because the rates depends on the week. Like a 26 week is 5.15 or, you know, a 4 week is like 4.59. And so I thought, well, that's that's pretty good for short term. And then if it goes up, I'll reinvest it. It doesn't that doesn't tie up the money for and if I could if I stagger them, you know, like I don't know what the word is, but you stage it out, then you constantly have something renewing, correct?

That's right. So it's a laddered approach is how we refer to that. And yeah, with that laddered approach, you could do that with CDs, you can do it with treasury bills, bonds and notes. But yeah, this is, you know, going to give you the ability to have these funds, you know, coming due over time.

And, you know, especially as, you know, rates level off here later this year, we'll see the prices of these not go down and the yields will still be pretty high. So, you know, this is a great option for you. And they can be purchased in smaller amounts, T bills than other investments.

So they're more accessible, you know, to be able to buy in many cases than other types of investments, especially, you know, given that there's no risk. So I think this is a great option for you, especially, you know, given where rates are right now. Okay, very good. Thank you for corroborating that. And God bless you guys. All right. Betty, God bless you. Thanks for listening today. Before we head to our next break, a quick email.

This one comes to us from Jenny. She writes to us at Ask Rob at Faith Fi dot com. My parents want to start giving money to their grandchildren, my brother and me. This is a question we got earlier in the broadcast. She says, I've heard on your program you can give up to seventeen thousand every year and they can do more if they want. But it needs to be reported. Who reports it and how would they do this? And then as the recipient of the gift, what do I need to do if they give me more than seventeen thousand?

Do I need to report anything? And the bottom line is, if you give more than seventeen thousand to an individual in a calendar year, you have to file IRS gift form seven oh nine. Jenny, that amount is then counted against the gift givers lifetime exemption of twelve point zero six million. So there's a long way to go before you're going to bump up against that. Now, you don't have to do anything as the recipient of the gift.

There's not any reporting requirements, certainly no taxes due on that. So you can just receive that and with a with a grateful heart and move right along from there. Nothing you have to do on your end. Thanks for writing to us. If you have a question, send it along to us to Ask Rob at faithfi.com. That's faithfi.com. Hey, you're listening to Faith and Finance Live with Rob West. Today's broadcast is prerecorded, and that means we won't be taking any calls.

But we do have some calls lined up and lots of great information coming your way that we think you'll find helpful. So stick around for more Faith and Finance Live after this brief break. Have you thought about the fact that your identity is not about what you do or what you have? Your self-worth is definitely not equal to your net worth. Your identity is in Christ. It's Jesus in you, your hope of glory.

That's what Colossians 1 27 tells us. To them, God chose to make known how great among the Gentiles are the riches of the glory of this mystery, which is Christ in you, the hope of glory. As you renew your mind and counteract the messages of this world, as you handle God's money, I hope that's an encouragement to you today that you already have an abundance before you count the first dollar, and that's Jesus, the hope of glory, Christ in you. We're delighted to have you with us today on Faith and Finance Live.

I'm Rob West. And by the way, if you haven't checked out our new website at faithfi.com, I'd love for you to do that. You'll find it on the web again at faithfi.com. While you're there, check out the Faithfi app. I'll tell you, tens of thousands of Christians now are using that app every day to manage their money, God's money, as they set up their spending plan and work to control the flow of money and align their spending with their values and priorities using the digital envelope system there in the app. Also, our Learn tab with the best content in Christian finance and our Faithfi community, where folks every day are posting questions and comments, encouraging others on their stewardship journey. It's all there, and it's a quick download from your app store.

Just search for Faithfi or head to our website, faithfi.com, and click the app button and let us know how you enjoy it as you dive in. All right, back to the phones. Let's head to Arizona. Neil, thanks for calling. Go ahead.

Yeah. Hey, I'm 70 years old. I'm still working full time, and everything's paid off. Half my salary goes into the 401k, and I'm just worried that they're going to steal all my money, you know, the way the government and just the way they're giving it to everybody but the Americans. And so I need to know what to do with it. It just needs some reinsurance.

Yeah, go ahead, Neil. And the other question is, okay, so, you know, like I said, everything is paid for. So once I start taking this money that I've saved, how do you pay tithing on that? If you've already paid tithing on it, how do I do that?

Do I just make it a gift for men on or what? Yeah, let's talk about both of those. Number one is, you know, I love the idea of you saving in this 401k. I still think it's the very best way for you to put your money, you know, in order for the government to be able to touch it, they'd have to pass new laws allowing that to happen. That would be incredibly politically unpopular. And I realize we're in interesting times and nothing is too far fetched.

And yet, I don't see that on the horizon anytime soon. So I think you can safely continue to save there. I love that you are debt free, you're keeping your expenses modest. You know, getting out of debt is one of the very best ways to reduce your level of spending. And as you head into a season, perhaps down the road where you're no longer working for pay, it's going to help to alleviate as much pressure from your budget as possible. So continuing to put 50% of your pay into that 401k and building up that nest egg that you'll eventually roll over to an IRA, an individual retirement account, and then manage in a way that's consistent with your risk tolerance, your age, your goals and objectives, and then convert that to an income stream, you know, makes a lot of sense to me.

So I think you're, you're on the right track there. With regard to your giving, you know, whenever we give a tithe, if we're going to apply the Old Testament principle of the tithe, which I think is a great starting point for our giving, because it really allows us to give systematically and proportionately as God provides increase, that's really the key is what is my increase? Now, if you're already tithing on a gross amount before you put that in, essentially, you've already tithed on that money. And then what you'd have to determine is what portion of that ultimate account and whatever it grows to, when you take money out is a return of capital versus investment gain, right? Because anything that's a return of capital, you've already tithed on anything that's an investment gain you haven't, that's part of your increase.

So I think you've got a couple of options there, Neil, you could either just say, Listen, everything I get is a gracious gift from God. And I'm going to, you know, give systematically on that, even if in a sense, I'm, I'm, you know, tithing on that again, or you could say, Okay, of this portfolio, here's the total amount I put in, and what percent is represented in the total balance that are my contributions, which leaves the remaining percent of the account, that's investment gain. And then every time you take a distribution, you could say, well, the percent of the total that I'm taking out, that was my contribution, I'm going to consider that as a return of capital. And the other percentage, I'm going to go ahead and tithe on because that I'm going to consider investment gain.

I think you could take either of those approaches. Does that make sense? Yeah. What do you know about I bonds? So inflation bonds, you know, normally are not very popular, just because the rate on them is very unattractive.

That has changed. And particularly late last year, they were very attractive at 9.62%. Are they still attractive today?

I would say they're fairly attractive. Here would be my caveat, Neil, I would only be looking to put money into I bonds and by the way, you can only put in 10,000 per person per year, I would only put money in that has a one to three year time horizon. And here's why it's got to be at least one year because you can't get the money back.

Prior to a year, you're just not allowed. If you're going beyond three years, I'd rather you, you know, be an investor in a properly diversified stock and bond portfolio, I think you're going to get better returns over the long haul. Because I see these I bond rates continuing to fall right now it's at 6.8. When it adjusts again in May, it's going to come down lower, it still will be attractive.

But eventually, I think in a year's time, we're going to see them back down at levels you're not very excited about. And so for that reason, I wouldn't be putting money that has a, you know, five year or more time horizon, because I think you'd do better elsewhere. But with money that you're wanting to get a decent return on with basically a risk free investment, which is what I bonds are, that has a one year one to three year time horizon taking advantage of this, you know, rate currently north of 6%, I think is a great opportunity. Yeah, I have a credit, you know, not a bank, but a credit union. And then I got over 50,000 and savings and it just, it's not keeping up with inflation.

Sure, sure. Yeah, that's exactly right. Well, so taking 10,000 and dropping it into the bonds right now, just knowing what I just mentioned a moment ago, I think can make some sense. You do that by opening an account at treasury direct.gov. That's treasury direct.gov. And then you just do an electronic transfer.

And the only way you can buy the bonds right now is electronically they don't issue paper bonds. What I'm saying do you do you believe in buying gold and silver instead of paper? I like gold and silver, but I would be at the upper end of my typical range for gold and silver and not get highly concentrated. So I would say a typical range for most folks is between five and 10% of their portfolio. And because I think gold's a little more attractive right now, just given what's going on economically and so forth, I'd push it up to the upper end of that range, but I wouldn't be going 20, 30, 40, 50% of my investable assets. Just because even though it's a hedge and it's a store of value, and it does well in uncertain times, the long term performance and heightened volatility of gold and silver, it just doesn't measure up with stocks and bonds historically. And so for that reason, I wouldn't want you to be highly concentrated.

Plus, it doesn't generate any income. You've got to store it if you're taking physical possession. And if you're trying to liquidate it, sell it, you've got markups on the sale from the dealer.

So for all of those reasons, I'd keep it to no more than five to 10%. Neil, I hope that's helpful to you. We appreciate your call, my friend. And God bless you. Let's head to Arkansas. Chris, you're next on the program. Go ahead. Yes, sir. Just a quick question.

My wife is disabled and we're fighting Social Security as usual. But anyway, we took out a loan about six months ago to pay off all our credit cards to the tune of about $12,000. It's a 14% interest. I have CDs and I don't know whether to go to the bank and borrow against them, which the interest rate would be lower or to cash one and completely pay it off.

What would you think I should do? Yeah, I think the question is, have you solved the problem, Chris, that got you into the credit card debt in the first place, which was probably, you know, overspending? Exactly. Well, my wife became disabled two years ago and we're simply just living on my income.

Fortunately, all we have is a mortgage, but we pay off all the credit cards and haven't gotten back in that situation since. But just wondering which one do you think if either one would be the best? Yeah. Would that deplete all of your liquid reserves if you did that? No, it wouldn't.

We have about five back in reserve, somewhere around $45,000, $50,000. All right. Yeah, I'd be comfortable with that. So long as you really feel like genuinely you're not going to build those balances back up. If you had some concern about that, the other approach would be to contact my friends at christiancreditcounselors.org.

They could get the interest rates down and with the level monthly payment and the reduced interest rates on the credit cards, you'll get that paid off 80% faster. But if you feel like you've solved it and you want to knock it out and you're not going to deplete your reserves, I'd be comfortable with that as well. Thanks for your call today. Well, we're about out of time today. Before we go, the late Larry Brickette used to say this. He would say, the way we handle money is actually the clearest indicator into what's going on in our lives spiritually.

Now for some of us that is stops us in our tracks and we say, Oh, I don't like the sound of that. And yet it's an opportunity for each of us to say, regardless of the mistakes we've made in the past or the decisions we've made in our financial life, from this point forward, I want to be found faithful. What is faithfulness?

It's obedience in the same direction over a long period of time. And when it comes to our money, we have an opportunity to go to God's word, to renew our minds, to get into the scriptures and see what he has for us in those 2,350 verses and those parables, more than half of them that deal with money. And we can see the heart of God and how we should be rich toward God and handle money in such a way that it's evident that God is our treasure and not our money. You remember in Mark four and the parable of the sower, Jesus, when he was explaining to the disciples, what choked out the word from bearing a 30, 60, a hundred fold return, he said it was the deceitfulness of riches and the cares of this world and the desires for other things. Let's not let that be true about us in the way we handle God's money. Let's hold it loosely.

Let's give it generously and let's use it to honor the King of Kings. And let's do that together on this program each day. Thanks to my team today, Amy, Dan, Clara and Jim. Thank you for being here as well.

Faith and Finance Live is a partnership between Moody Radio and FaithFi. I hope you have a great rest of your day and come back and join us next time. We'll see you then.

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