Avoid Credit Card Fees

The average credit card late fee is now as high as $35, and that's just one of many fees you could be paying if you're not careful.

I am Rob West. Credit card companies make billions each year in interest charges and other fees, but almost all of them can be avoided. I'll tell you how to stop paying unnecessary credit card fees today. 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 decisions. Proverbs 21, 20 tells us, precious treasure and oil are in a wise man's dwelling, but a foolish man devours it. With a little planning and oversight, you can prevent credit card fees from devouring your treasure, and some of them you may not even be aware of. Obviously, the biggest fee you'll ever pay on a credit card is interest, which now averages around 24% of your remaining balance. That means if you carry a balance of $1000, you'll pay $240 a year in interest alone. This is why it's so important to pay your balance off in full each month.

If you have to adjust your budget to pay extra each month, you should do it as soon as possible. And remember, the interest you pay on the balance will more than wipe out any rewards you receive for using a credit card, so don't be fooled. Now, some credit cards have annual fees. It's a surcharge that you have to pay just for the privilege of using the card. While some cards with annual fees might charge as little as $35, others may ding you for as much as $500. Either way, you don't want to pay an annual fee, and you don't have to. Cancel that card and look around for one with no annual fees.

And while those cards may give more rewards, remember, it won't matter if you carry a balance. Late fees are something else you don't want to pay. They could run as high as $30 for a first-time offense and go up to $40 the second time you're late making a payment. You can avoid late fees in any number of ways. Sign up for text alerts when a credit card bill is due.

You can also set a reminder to alert you each month before the due date. You can even make a payment each time you use the card for an equal amount to the charge. That way, you'll never have a minimum amount due. You can set up an automatic payment from your checking account if you carry a balance, which again, you want to pay off as quickly as possible.

Here's something else to avoid. Cash advance fees. Check your credit card agreement. You might find there's a fee for taking a cash advance, an even higher interest rate on the amount you take out in cash. And the transaction doesn't even have to result in you actually getting cash. This fee could also be charged for getting money orders, exchanging foreign currency, wire transfers, sending money to a friend using an app, and making an auto loan payment. You can avoid cash advance fees by simply having cash on hand to meet any of those needs.

Again, adjust your budget so you have margin. That's money left over after paying all of your bills so you'll never need a cash advance. Okay, another one you never want to pay is a returned payment fee. Your bank will charge you a fee if you bounce a check.

Everybody knows that. But if a check is going to a credit card company for a monthly payment and it bounces, the card issuer may also charge you a fee for a returned payment, which could be as high as $40. And if that mess results in a late payment, well, we've already told you about that one. There's really only one way to avoid returned payment fees, and that's by always having enough money in your checking account to make necessary payments. The only way to make sure that happens is by living on a budget. And if you're not, download the FaithFi app and it will help you set one up in no time.

Then stick to it. Another charge you're likely to incur if you're not living on a budget is an over the limit fee. That's when you've maxed out a card and you keep using it.

In many cases, the transaction will be declined, but there may also be a fee attached and it could run from $25 to $35. Now, you may be able to sign up for over limit protection with your card issuer, but that's really just treating the symptom. You never want to carry any balance on your card let alone the maximum balance. So the best way to avoid over the limit fees is to pay off your balance. By the way, carrying a balance in excess of 30% of your available credit will negatively affect your credit score. Another reason to avoid carrying a balance. Okay, we've gone over a whole batch of credit card fees you want to avoid, but it's not a complete list. Your card issuer may be able to charge you for other things like replacing your card, opting for paper statements, or increasing your credit limit.

Again, check your agreement to see what possible fees are in the fine print. All right, your calls are next. 800-525-7000 for any financial topic. I'm Rob West and we'll be right back.

Stick around. It's great to have you with us today on Faith and Finance Live. I'm Rob West, your host. All right, it's time to take your calls and questions today on anything financial. We've got some lines open and we'd love to hear from you. The number to call is 800-525-7000. That's 800-525-7000. Let's begin today in Chicago. Hi, Flora. Thank you for calling.

Go right ahead. Hi, my question was about an adjustable rate mortgage. It's due to a so-called explode 2035. I have an annuity of $1,200 and my mortgage is $1,200. That's the income. I wanted to know what... I couldn't get a mortgage. I couldn't get a loan.

What do I do now? You have a loan now on your mortgage and the payment is equal to the income you're receiving from your annuity, but the payment has been going up with the adjustable rate. Is that right? Slightly, yes. The rate is 3%, but it's high because my taxes is due to be renewed or what do you call it?

Go down because I'm a senior. Okay, well that's great, but has the interest rate on the mortgage been rising? No, it's 3%. Okay, so it's a fixed rate mortgage though, right? Yes. Okay.

Go ahead. No, that's good because if you had an adjustable rate mortgage with these rates headed up, you would have been increasing. That payment would have been increasing dramatically along with the mortgage interest rate, but given the fact that you're locked in at a really low interest rate given where rates are today, that's a good thing. So what is the main question you're trying to wrestle with at this point? I hope to be able to be close to paying it off, but what's going to happen if I don't?

Okay, I'm not following you. So this mortgage will last if you just continue to pay the minimum payment, the scheduled payment, you'll pay it off in 2035? Is that what you said? I believe so. They said that's when it's due to all of the interest will come due. I see. Okay, so it's a balloon meaning you're going to pay the interest on the back end?

That's what they said, yes. I don't see it. Okay, well what you need is an amortization schedule.

That's the term for it. I would call your mortgage servicer, whoever you pay your bill to, and ask them for an amortization schedule to show you what your scheduled monthly payments are. And then if there's this balloon on the back end, because they either moved, you know, during the pandemic or some event, financial event in your life, or just because you had a balloon mortgage, although we don't see those typically, if they moved a lot of the interest to the back end, you'll see exactly the date and what will be owed. And the idea is that you would need to either refinance prior to that point so that you can get on a regular fixed amortized mortgage where it's the same monthly payment for the life of the loan until it's paid off, or you're going to have to sell the property so that you can satisfy the loan if you don't have the assets to be able to pay off that large balloon payment on the back end. Is that the challenge that you're wondering, how are you going to stay in the house if you can't refinance it? Yes, I thought maybe there was another option somewhere.

But like you said, that sounds good. Because like I say, I have an annuity, but that might not work at the time. Well, the annuity is providing you a regular stream of income, which sounds like it's working right now. But if you all of a sudden have this large payment at the end to cover all of the interest, you know, you would either have to pull that out of savings, or you'd have some other asset that you'd have to convert to cash. So you could satisfy that large balloon payment on the back end. If you're unable to do that, then you would need to, you know, refinance the property. Why wouldn't you be able to refinance it?

Do you have bad credit? I'm retired, and I'm on Social Security. But I can do a little work. Okay, let's do this. What I'd like to do is have my team get your information. I'm going to have one of our certified financial counselors give you a call just to help you look at that amortization schedule and come up with a plan on where you need to go from here. So what you will do is if you're interested in this, give us your information.

This won't cost you anything. One of our volunteer coaches or counselors will give you a call. You'll get the amortization schedule from your mortgage company. And I think once you have that information, they'll be able to help you analyze it and talk about what your options are. Does that sound good? Okay, yes, yes, yes. Okay, very good. So you stay on the line, we'll get your information. And then we'll have one of our certified Christian financial counselors give you a call. And Flora, thanks for your call today. We appreciate it very much.

800-525-7000 is the number to call. We've got some lines open today. We'd love to hear from you with whatever is on your mind.

Let's head to Cleveland, Ohio. Hi, Naomi. Thanks for calling. Go ahead. Hi. Thank you for taking my call.

Sure. I have a question about a 529 plan. I bought a plan to try to have some kind of an inheritance for my grandchild and have been modestly putting like Christmas presents, birthday present money in it. He has recently been diagnosed with severe autism. And my daughter was concerned when she found out about the 529 plan about him being able to access that money when the time comes and suggested an ABLE fund. But I guess I'm looking for what do I do if he's never going to be able to sign for himself and won't really be, you know, essentially disabled for the rest of his life?

Yeah, yeah. Well, the ABLE account, and I'm sorry to hear about his medical condition, the ABLE account is actually a part of the same tax code under Section 529. It's just 529A, which stands for ABLE, which is the state-run savings program for eligible people with disabilities so that they can save in a tax advantaged way. And it's under the same code that also allows for the 529 college savings plan. And so you are able to do a transfer from the 529 college savings to the 529A or ABLE.

The beneficiary is the account owner and the income earned by the account is not taxed. So that makes it a pretty low cost but very effective tool for saving for this purpose so that you can take advantage of public benefits for income, health care and food and housing assistance without the assets in this disqualifying you in any way. So what I would do, do you have a financial advisor that you work with? Well, I moved from Wisconsin to Ohio to take care of my mom with dementia. So my financial planner suggested that I go to somewhere in Cleveland, but I didn't know because my grandson's in California how that all would relate.

Okay, yeah. So he referred me to Ohio to somebody in Ohio and I don't have one here. Okay, so what I do is reach out to a certified kingdom advisor there in your area who can kind of walk you through all of this whether you qualify for the ABLE account and how you'd go about transferring it over and just understanding exactly how those accounts work. But it may be a great tool for you especially for those funds that are already in the 529 plan to be moved over and available for his benefit throughout the rest of his life.

To find a certified kingdom advisor in your state, you can just head to our website, faithfi.com and just click find a CKA. Naomi, thanks for your call today. We appreciate it. We'll be right back with much more. Stay with us.

Grateful to have you with us today on Faith in Finance Live. I'm Rob West. Heading back to the phones to take your calls, let's head to Florida. Hi Linda, go right ahead.

Hi, thank you for taking my call. I have a credit card that's about $12,000 and my income is social security only $1100 a month and I'm wondering if I can get the interest rate down on that or what I can do to, I don't know, help. I need help. Yeah, no, I understand that Linda, especially on a fixed income.

I know that can be challenging. Let me ask you, what led to the debt in the first place and do you feel like you've been able to stop whatever got you to this point so that we wouldn't be adding to it in the future? Yeah, I can stop using it. I think I used it the other day by accident but I just pulled out the wrong card and you know but anyway. Yeah, okay. I guess what I want to make sure of is that typically when there's credit card debt it's just living beyond your means and I understand living on a fixed income is challenging so if that's the case and you've not made the changes in your spending plan to be able to eliminate the use of that credit card for unbudgeted purchases then I would say you know we need to address that first but if it was a one-time event that led to it or a series of events or you've kind of already right-sized your budget then that's different.

Do you follow? Yeah, I, excuse me, I was doing pretty good and then my sister told me I should take my dog to the vet and so I did and it was $300 and I used and I used the card and then it just spiraled. She wanted me to get furniture and put it on my card and she was she was dying and you know I said okay put her on the card and just think it just went things from there I'm pretty sure yeah I did put it on my I needed a bed and I ended up you know getting one sure and gave it away to my niece because it wasn't too it didn't work for me and I have chronic pain chronic pain all the time. Well I'm so sorry to hear that now I realize that life can be challenging and I think the key is we just need to make sure you know as you work toward getting this paid down and ultimately pay it off that to the best of your ability to try to build up a little bit of a nest egg or an emergency reserve so that when the unexpected comes we fall back on that and we don't create this cycle where you're you know charging up debt with money you don't have and then paying it down and then charging it up again and that's going to come with just really trying to limit your spending wherever possible and again I realize that's easier said than done. In terms of the answer to your question about how to get this paid off my preferred approach especially with with the amount of debt that you have at 12,000 would be what's called a debt management program you might also hear it referred to as credit counseling and basically what happens is the account is closed now you could have another account a debit card or even another credit card if you wanted to although again I'd be very careful with that but whatever card goes into the debt management program the card is closed you would make one monthly payment through a non-profit credit counseling agency we prefer Christian credit counselors they've worked with hundreds and hundreds of our listeners and through the lower interest rate which is what would happen every credit card company has a reduced interest rate that they offer whenever a card is placed in their credit counseling program so you'd be able to take advantage of a lower interest rate and then by sending one level monthly payment combined with that lower interest rate you'll pay it off through credit counseling 80% faster on average and so you would just head to christiancreditcounselors.org they would meet with you over the phone help you work up your budget tell you what that lower interest rate would be and if that makes sense to you then you could enter the the card into the program and I think that would help you you know get this going in the right direction without you having to take out a new loan to pay it off or consolidate it or anything like that does that make sense okay you said christiancounseling.org yeah let me give you that to you again it's christiancreditcounselors.org christiancreditcounselors.org wait wait hold on i sure let's do this i'm going to have you stay on the line and my team will get on and make sure you get that exactly the way you need it but i think that's going to help you accomplish what you're looking for uh linda so you hold the line and we'll give you that web address when you're ready thanks for calling today to spokane washington hi cj go ahead hi thank you um i had a question about um saving for my kids um i have four younger kids and or i'm in a position where i've been blessed that i can start saving money for them um but i'm not sure if they're all planning on college and uh i know i like that savings vehicle for it but i don't i don't want to be locked into that if they're not going there's anything i can do anything better or anything like that well i think the key is to recognize the limitations on any of these types of accounts so one is a 529 college savings but you're right unless you were taking it out on a pro rata basis for scholarship awards or grants the money really has to be used for qualified educational expenses or else you're not going to get the benefit from it so if you want it more widely available than college you probably don't need to put it in a 529 you'll also hear when it comes to kids a lot about what's called a custodial account the challenge with that type of account is that you it becomes the child's asset at the age of majority so whatever that is in your state typically 18 uh it's automatically their assets if they want to buy a sports car they can buy a sports car if they're making you know the poor lifestyle decisions at that point it could accelerate that uh if they're not financially mature just in terms of their ability to handle money which many 18 year olds aren't um you know that would potentially create problems so the easiest way to go about this uh cj is just to open um an account for each one of the children uh in your name or jointly if you're married you and your wife would open accounts and you could open different accounts for each child and and essentially you'd earmark one for each child but it's still your asset you control it and then i would make a systematic investment into the account every month or a lump sum if you've got it and then you'd have to decide how you want to invest it if it's money that because they're young is 10 plus years out i would probably put it in the stock market especially now with it being down a robo advisor would be a great solution it's low cost it would automatically rebalance it among the investment options every time you make a deposit and there wouldn't be any transaction costs i would look at betterment or the schwab intelligent portfolios we'll be right back stay with us thanks for joining us today on faith and finance live where we apply the wisdom from god's word to your financial decisions and choices we want to be a hopeful encouraging but christ-centered approach to your stewardship of the financial resources god has entrusted to you we've got some lines open today for your calls and questions at 800-525-7000 we'd love to hear from you let's head back to the phones and uh to chicago let's see fort myers phil go right ahead hi rob uh thank you for your ministry and uh thank you for taking my call yes i have a question regarding uh credit union versus bank uh we're new to the fort myers area and we're interested in finding a good local um entity to work with and i'm not sure if uh the credit union it's not fdic insured because it's a credit union but they do have some sort of other insurance yes i wonder what is your take on that yeah be happy to well uh you know you could go either direction credit unions especially if you want a local relationship tend to have lower fees and better interest rates on savings accounts and loans than brick and mortar banks that you might find in your area now where you can find as competitive rates or even better rates in some cases is through the online banks but if you want a local branch that you can walk into get to know someone you probably do want to look at a credit union option just to take advantage of those lower fees and higher interest rates um the fdic equivalent uh for uh credit unions is the same in terms of you know the protection that it provides um so you know you're going to get the same uh you know insurance based on the failure of that institution whether you're with a credit union or a bank it's just called a different name so i wouldn't have any concern about that when you open this account well that's wonderful that's good news and thank you so much i appreciate your uh help me out with that decision okay you're welcome thanks for uh calling into the program today we appreciate it uh by the way as you are looking at that what the uh the term is ncua you are going to want to look for that that means they're a part of the government agency that protects credit union members on occasion you will find credit unions that are through a state charter and they're going to have potentially private insurance although none of those have ever failed i would prefer you'd be with a credit union that's a part of the ncua the national credit union administration and that is essentially exactly the same as fdic phil we appreciate your call today thanks for being on the program uh 800-525-7000 is a number to call we've got some lines open today and we'd love to hear from you our team is standing by to st charles illinois debbie go right ahead hi rob quick question yeah we are selling our home and by god's goodness we're going to net over three seven 375 to 400 000 and we are be will be moving to kentucky um we're going to rent for short term till we find the right home and or build my question is where do i park the proceeds knowing that you can't put more than a certain amount in any one um bank yeah well you've got a couple of options one is you could use multiple banks so you could park half of it in one bank and then put the balance in another uh keep in mind you can actually get more than 250 000 in fdic insurance at the same bank as long as you have different account categories so for instance one account category would be an individual account in your name only and another investment or another account category would be a joint account held jointly between you and your husband if you did it that way and you split it between those two account types or categories you could actually get up to 250 000 on each of them but if you wanted to have the proceeds titled jointly you know in terms of the whole amount and you didn't want some of it some of it in a different category like titled individually then you'd have to use more than one bank and so i'd probably have a primary relationship and then maybe at least if you didn't use two online banks have a second bank as an online bank that you attach electronically to the other one so you could move money back and forth does that make sense sure oh absolutely yep yeah i didn't go ahead came up with that question this morning thought oh i don't know the answer okay very good well yeah that that should give you what you need i think the key for you is uh you know to go ahead and take advantage of these high interest rates i mean uh how long do you have for to park this money before you'd use it again it could be a month it could be nine months um it's we're moving out of state so we're not sure if we'll find a home things are turning over quickly down there or we'll build and i mean we already have money you know in different online accounts and different things but um obviously we don't want to tie it up if we find something yeah very good i think that's the key is having it readily available liquid but safe and the nice thing is you know at four percent interest which you can get on these high yield savings accounts right now with fdic insurance on 340 000 i mean you could make you know nearly fourteen thousand dollars over the next year if it sits that long i realize it may not but i think that's definitely the direction you want to head with this so hopefully that helps you we appreciate your call today thanks for being on the program uh 800-525-7000 is the number to call no matter what your financial question is today if you want to talk about debt repayment maybe it's saving for the future balancing that budget or giving wisely whatever it might be we'd love to hear from you today we'll help you tackle whatever you're thinking about financially let's take an email these come into us every day at askrob at faithfi.com and we'll tackle this one from Yvonne she says i listen to your program someone called in asking about i bonds i heard about them about a year ago but i didn't invest in them but i'd love to know your thoughts what do you think today and what i would say is i bonds were fairly attractive last year that really is no longer the case we just got the new rate as of yesterday may the first that's going to be good for the next six months and it's down to the composite rate is now at 4.3 now keep in mind last year we were up at 9.6 the latest rate that just expired in may was 6.8 those were very attractive obviously with very with essentially a zero risk investment but now that it's down at 4.3 and given the fact that with a an i bond you've got to lock up the money for at least 12 months even though you can get it back after 12 months with a small penalty you absolutely can't touch it for 12 months and if you look right now you can get a 12 month cd at over five percent so there would be no reason to no reason to put money new money in my opinion into an i bond lock it up for 12 months when you could get a better rate and a certificate of deposit and keep in mind this 4.3 rate is only good for six months we'll get a new one in october and given the fed's focus on getting inflation under control through raising interest rates i expect that rate will continue to come down so i would say unless there's a real specific purpose for it yvonne i'd probably pass on i bonds given this new rate is significantly below what you can get on a cd we appreciate you writing into us folks if you have a question feel free to send it along just email it to askrob at faithfi.com we'd love to tackle it all right we're going to take a quick break when we come back in our final segment room for more questions so what is that financial question you've been wrestling with we'll help you apply the wisdom from god's word the principles and passages to whatever you're dealing with today phone lines are open perhaps one just for you 800-525-7000 give us a call and we'll be back with much more just around the corner by the way if you haven't checked out our website recently jump into the faith by community when you visit faithfi.com that's faithfi.com stay with us much more to come just around the corner thanks for joining us today on faith and finance live i'm rob west let's head right back to the phones to ohio hi stacy thanks for calling today how can i help emma um i think a lot about the um the cashless society and um it's i think they're calling us dead now and uh they were talking about your money and they were going to just all of a sudden tell us that we can't use cash any longer and what's going to happen to our money that's in the bank and and how how do we convert that and how they roll that over to wherever they're guiding us or directing us yeah well there's there's pieces of truth in that and then there's this a lot of falsehoods out there with regard to what folks are hearing and what's being said on the internet about fed now and digital currencies and where it's all headed so let me try to uh bring some clarity to this for you uh fed now is launching um and basically that's a payment system that's going to allow you to facilitate payments through the federal reserve so it's like the current payment systems that are out there it's a digital payment system the reason that it's being created is it's going to be more uh efficient for uh timely transactions so currently uh if you want to process a payment you can't do that um you know on sunday i mean those you can't do that seven days a week 24 7 um but the fed now program which they're rolling out is going to be available seven days a week 24 hours a day and so it does create an opportunity for folks who need instantaneous transactions to take place the fed now system will do that but the fed now process has nothing to do with what's also being discussed and that is a central bank digital currency which is basically uh you know where we would have a digital dollar but where it would run through the central bank that's still a long way off if it ever happens the reason is it's going to take congress before we would ever see that congress is charged with coinage in this country according to the constitution so the fed can't do that the treasury can't do that it would actually take congress and the president for us to have a digital dollar and there's real problems with that idea in that the fed would have access to all of your transaction information know exactly how much money you have where it's being spent and that kind of infringement on our privacy is something that a lot of folks have real concern with myself included and so i think we're going to have significant debates about this before we would ever see that come to pass and it's a good way off china's been working on there since 2016 and they're still in a beta phase we just got the latest first step of the research on this last year where our own the u.s government has begun to look at it but it's still very very early so i think the bottom line could we have a central bank digital currency down the road yes it's fraught with problems there'll be a lot of debate in congress before it ever sees the light of day and it's completely different than the fed now program which is essentially a payment system to facilitate transactions is that helpful well i guess it is it is coming from you it's very helpful now i could get myself on the debt and i'm debt-free and and now i have my cash and i don't want them to mess with my cash yes i understand well nobody's going to mess with your cash quite yet so i think you're in a pretty good spot i'm glad to hear i couldn't hear everything you said there but it sounds like you're debt-free that's great i would just continue on this track and uh see what you can do to learn how to manage money god's way in fact if you want to stay on the line i'll send you a copy of howard dayton's book your money counts and i think will be an encouragement to you help you continue to grow in your understanding of god's way of handling money we appreciate you being on the program today stacy uh let's see tamara ville indiana hi barbara go ahead hi there rob i first want to say thank you so much for this ministry uh you've been so helpful to so many my question has to do with final expenses death and burial insurance products versus prepaid financial of prepaid funeral expenses what are your thoughts about that yeah yeah i mean i would rather you just save yourself as opposed to using insurance and just take what you would have been paying for an insurance policy and just continue to park that away in a savings account so you've got that money available for whatever you might need it for along the way but then it also could be there as you know funds to be able to cover these expenses at that point rather than paying for a policy when you probably have the assets it's just a matter of making sure they're readily available i wouldn't be opposed to prepaid funeral expenses as long as you do your homework on that i mean these funeral homes can go out of business if you wanted to change your plans in some cases they're not portable moving from one state or funeral home to another you know so there there is a limited amount of flexibility there's also often some hidden charges so i would just do your homework as to what decisions you're making what you know the strength of the the funeral home that you're committing this money to and making sure that you really are committed you know to the plans that you're making now and if you did change your mind what options you have so i i like the idea clearly of you pre-planning and taking that burden off of your loved ones at an already difficult time and i like the fact that you'd have that you know already covered and a lot of the decisions made i just want to make sure you go into it asking a lot of questions so that you understand exactly what you're getting into does that make sense certainly that does someone had told me though that there was a system in place where the state will guarantee the funds if a funeral home goes out of business that it would be backed up by the state okay yeah i'm not uh familiar with that and that may be you know on a state-by-state basis that that uh is the is the case so i would be interested to look for your state uh whether that's um you know something that's in place there i'm not available i'm not aware of that being available nationwide okay all right but it'd be a good question to ask as you do your homework yeah exactly right hey thanks for calling today barbara we appreciate it uh to crystal river florida hi karen go ahead hi there um i this is about my ties and i drew out money for my 401k to go on my 70th birthday with my husband to italy and to greece now i'm thinking should i tithe on that money that i drew out to go on my vacation i don't want to i don't want to short god you know and with my tithes yeah well i certainly appreciate your desire to be found faithful in your giving if you're applying the principle of the tithe care i mean you can never outgive god so it's never a bad idea to give but if you're applying the principle of the tithe specifically to this money uh you know that's not your increase so if you have money in a savings account and you withdraw it uh just by virtue of you taking it out that doesn't mean that you've received an increase it just means that you've taken money out applying the principle that tied to an increase would be when you receive money as either from your job as a part of your compensation maybe you receive an inheritance or a gift you could even you know look at social security or a pension as your increase and you would give a tenth of that but essentially money that you've already received you've already tithed on that money and so by virtue of you pulling it out of a savings account and spending it on a vacation doesn't really allow the the principle of the tithe to come into play does that make sense okay that'll make me feel a lot better thank you so much okay hey where are you going in italy um venice and florence and rome i want to go to rome yeah so that sounds amazing and when do you go yeah uh september 2nd okay very good well listen happy birthday in advance and uh thanks for being on the program today we appreciate it uh let's head to uh pennsylvania go ahead patricia hi rob thanks for taking my call i'm calling because my my husband and i are contemplating buying a home that uh so we would be closer to our son it would be a second home um i've retired but he has four years left to work and we're wondering if now is the time to uh take that mortgage and um take some money out of our 401 or roth ira to pay for the home i see all right so give me kind of a quick rundown of where you're at so what is your age my age is 65 okay and your husband my husband is 61 okay and how long do you all plan to continue to work uh he's going to work four more years till he's 65 i retired okay very good and what do you have in the way of investible assets inside your all of your retirement accounts together roughly um about 1.9 million all right and um all right and um do you own your current home free and clear correct we we have no debt you have no debt all right very good and what would you be looking to spend on this second home um probably about 350,000 okay all right very good and how much of that 1.9 is in the the roth um about uh 450,000 okay and are you uh pulling an income from any of those retirement accounts or are you just living solely on your husband's income we just live solely on my husband's income okay do you have enough surplus where you could absorb this mortgage on the 350,000 if you had to take that yes okay do you all really have a conviction to be debt-free or would you be interested in taking on a mortgage and then paying it down over time well we'd like to we have a conviction for being debt-free but we're worried about taking out money out of our savings that's for our retirement sure and what kind of income stream are you going to need in retirement alongside social security once your husband stops working do you know roughly how much you're going to need per month probably about five six thousand dollars a month okay all right you know you should be fine with that i mean it's you know if you took four percent a year on 1.9 and that's prior to whatever growth will occur over the next four years uh you could generate 76,000 a year so i think you guys are in pretty good shape i would just talk to your cpa about the best way to do it from a tax standpoint that may be to take it out of the roth it may be uh the uh the pre-tax money but i think you're going to be in great shape uh you know no problem to go ahead and and pay for this out of cash hang on the line we'll talk a bit more off the air that's going to do it for us today thanks to my team today robert dan and amy faith and finance live is a partnership between moody radio and faith i will see you tomorrow bye bye you