Saving for Major Purchases

One of the simplest ways to stay out of credit card debt is to save for major purchases.

Hi, I'm Rob West. By planning ahead and saving for things you know you're going to need or want in the future, you avoid having to borrow, and taking certain steps can make this a lot easier. I'll talk about that today, and 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. Okay, you might be thinking, save for things I'll need in the future? Isn't that my emergency fund?

Actually, no, it isn't. This is sometimes called a sinking fund, a term borrowed from the business world. It's a pool of money you regularly contribute to, so you'll eventually have the cash you need for an upcoming big ticket expense, like a vacation, a new car, or home repairs. And think about this, you're actually paying yourself to delay that major purchase, because your savings will accrue interest. Compare that to putting the purchase on a credit card with a sky-high interest rate, where you're paying to use someone else's money for a time. By grasping this concept of delayed gratification, you'll save yourself a ton of money over your lifetime. You also won't be tempted to tap into a retirement account for a major purchase. That is extremely expensive money.

You'll have to pay taxes on anything you withdraw, and possibly a penalty. Besides, that money is for another major purchase, your retirement. So what's the best way to save for your big ticket item?

Well first, you need a goal. Let's say you want to put a new roof on the house, and you estimate it'll cost $7,500, which is pretty typical these days. That's your goal. Next, you have to look at your budget and determine how much you can pull each month from other categories to go toward your new roof. Let's say that's $500.

Divide $7,500 by $500, and you get $15. That's how many months it will take you to save up enough cash to replace your roof. Of course, if your roof's leaking now, you can't wait.

But instead of automatically borrowing, see if you can get it patched temporarily until you've saved enough to replace the roof. That's the attitude you want to have. No matter what you're saving for, always be asking, how can I avoid borrowing and still get what I need? It's okay to start small. If you can't put away $500 a month, start with $100. But begin looking for ways you can increase that amount by cutting your expenses. Be flexible. It's okay to adjust your savings as needed.

Just keep in mind that you want to reach your goal as soon as possible. And you might think it's silly, but you can also start a change jar if you still use cash on a fairly regular basis. Empty your pockets or wallet in a one-gallon jar or jug and forget about it. When it's full, you'll have another $400 or so toward your goal. So now you're ready to start saving, but where should you put that money? Well, it should definitely go into a separate account apart from your usual checking and savings and even your emergency fund. You want to reduce the temptation to tap into this money for something else. So put this special savings into an online bank to get the best rate. Like with your emergency fund, you can have a certain amount automatically transferred into this account from every paycheck or once a week or even once a month.

Then pretend it's not there. Now, if this special purchase is something you know is several years down the road, like a car or even a house, you can put some of this money in a CD or money market account to get a better rate. I would ladder your CDs so that one is coming due every six months or so.

As you near the target date for your big purchase, begin cashing the mature CDs and putting that money back into savings. Okay, you may remember a while back we talked about setting up SMART financial goals. That's S-M-A-R-T and it stands for specific, measurable, attainable, relevant, and timely. So first, specific. Make sure you know exactly what you're saving for and how much you'll need, like with our example of the replacement roof. The more specific the goal, the more likely you are to get there.

Next, make sure it's measurable. Set your monthly savings goal and track how well you're doing. Make adjustments as needed. Then there's attainable. That means setting a goal that you can realistically attain. If you set it too high, you'll get discouraged along the way.

Next is relevant. Make sure this big ticket item you're saving for is important, something you know you'll need or really want. That way you'll stay motivated.

And finally, there's timely. Set a deadline for reaching your savings goal and that will also help keep you motivated. It's okay if you don't get there by the deadline. Just keep plugging away until you do. So those are some tips to help you save for a major purchase. We hope you find them useful and when you reach a savings goal, let us know.

We'd love to hear how you did it. We'll be right back. Great to have you with us today on Faith and Finance Live.

I'm Rob West. We're taking your calls and questions now on anything financial. We'd love to hear from you. 800-525-7000. That's 800-525-7000. Give us a call.

Let's begin today in Washington state. Hi, Renee. Thanks for calling.

Go ahead. Yes, I'm just calling about my daughter and her husband. They're recently married, I guess a couple years now, but they both have ruined their credit by misusing credit cards and her husband actually had a school loan that he didn't finish paying off and and then they've had medical bills and but the credit cards I think are the biggest thing that now it's ruined their rental ability to have good credit to get a rental as well as purchase a home. What would you recommend for them? Yeah, well I certainly understand that and these can be tough lessons to learn, although as long as they learn from them that's the key, Renee, because as they're just getting started out if these first few missteps can be a building opportunity for them to cultivate the right disciplines so they never get into this situation again that will be really helpful even if it means it's going to delay a purchase like a new home. I mean perhaps they're going to have to rent longer than they would like to and I realize they'd love to own their own home but especially in light of where interest rates are at right now them taking some time to really work on getting those credit cards paid off and getting an emergency fund in place and then saving for that down payment is going to not only shore them up financially and help to improve her credit but also put her in a position where hopefully they can take advantage of lower interest rates which we would expect next year as rates start back down.

So where would they go from here? Well, the first step is always to develop a spending plan. They really need to have a good handle on what is coming in and what is going out and that's not only those things they get a bill for but they also need to have a budget to spending plan that includes those discretionary expenses so that they can really go to work on limiting their lifestyle, cutting out unnecessary spending to free up margin which is really the key to accomplishing their goals. So with every bit of margin that is anything left over after the bills are paid I would put that first toward an emergency fund of at least fifteen hundred dollars just so they have a cushion there so when the unexpected comes and it will they have something to fall back on. Then they want to keep all the bills paid including the minimum payments on the credit cards but at that point they'll want to attack those cards with that available margin to get that paid off a little quicker and them being an on-time payer every month with those balances coming down especially when those balances get below thirty percent of the available credit which is the credit utilization score. The combination of the on-time payments plus the credit utilization coming down is going to improve her credit. What is the primary issue with the credit? Is it late payments or was it just the amount that they owe?

Well I think they sound like there was a little of both. I think what they did and to be honest I actually did this it myself you know you get you can get credit cards that are interest free for what twelve months eighteen months and so you just roll everything over to that credit card. Well you keep rolling over rolling over year after year pretty soon the credit card companies won't accept you and so then I did that and so I've thankfully you know I've gotten myself out of that and paid everything off but you know I took a little loan out and paid it that way but what if they were to consolidate their credit cards? Is there you know these consolidation companies that help you to get your interest rates down and yeah I wouldn't recommend that for the reason that you mentioned is a lot of what I see most often is folks will get a consolidation loan pay off the debt it takes the pressure off even if the interest rate comes down a lot of times the payback period is longer so you end up paying just as much or more in interest. The bigger issue though is you don't have to do the hard work to get out of debt so you don't cultivate the right disciplines and because those cards are still open I get a call six months later that say guess what Rob the credit card debt's back and now we have the consolidation loan on top of it so what I would do is leave it right there if they have more than four thousand dollars in credit card debt and you very easily can especially if you get into that balance transfer trap and that's really what it is on top of the fact that you still have the cards open you get hit with a three percent fee and you're right eventually they'll they'll stop that game once they see what you're doing. My preference Renee would be that they use a credit counseling program this is often called debt management you have to go through a not-for- profit credit counseling agency we recommend Christian credit counselors here at Faithfi they've worked with hundreds and hundreds of our listeners what will happen is those debts will stay right with the original creditor that they're with now the accounts will be closed the interest rates will be dropped to whatever that particular credit card company's debt management rate is which will be lower than the prevailing rate and the combination of one level monthly payment through Christian credit counselors to each of her cards plus the lower payments will allow her to pay that off on average eighty percent faster so if they were to go back and build that spending plan create some margin get that emergency fund of fifteen hundred and then get all these cards enrolled in credit counseling that will help to get her on track to get out of debt once and for all hopefully establish the right disciplines that makes this all sustainable so we don't repeat this in the future and by doing all these things her credit will just naturally repair itself there's really not anything you can do to short circuit that process does that make sense uh yes yes it does yeah yeah thank you so much for that so they do they really need to get the emergency fund before they go to the credit counseling process they they don't my only concern is that if they don't start putting something aside and hopefully and Christian credit counselors will work with them on this because the first step they do is they'll help them create a budget and they're going to create a budget that not only covers the monthly payment to the credit card companies but has a little bit of margin and even if it's twenty five or fifty dollars a month going into a savings account they need something going into a savings account so they can break the cycle of charging against the credit cards when something comes out of left field and it always does so that's where that fifteen hundred is not a magic number i just want them to start to develop the discipline of putting something in savings and i want them to start to build a little bit of a reserve fund that they can go to first so they don't ever have to charge on the credit cards again for a non-budgeted purchase does that make sense yeah yes that does yeah okay very good so the next step is to contact our friends at christiancreditcounselors.org that's christiancreditcounselors.org and they will get them set up get the budget going help them understand what those new interest rates are and all of that working together will get this going in the right direction so hopefully that's helpful to you renee we appreciate your call and you know what by the way stay on the line i'd like to send you a book that'll be our gift to them it's called money and marriage god's way and i think for a new young married couple if they'd be willing to read that together while they're doing these other things that could really help to set them up for the future so they don't ever have to get in this situation again thanks for calling today 800-525-7000 we're headed to a break here as we do let me remind you you know as we head toward our year end here at faith by which is june the 30th we're on a fiscal year end this is a critical time for your support we always rely on your support all year long as a listener supported ministry but as we round out our ministry year now it's more important than ever so if you'd consider a gift to the ministry of any amount and we mean that beyond the giving to your local church beyond what you're doing at moody radio a gift to faith fi would go a long way to helping us continue to offer the ministry resources we make available every day to stewards literally around the globe you can make a gift quickly and easily at faithfi.com just click give that's faithfi.com just click give and thanks in advance back with your questions just around the corner stick around we'll be right back great to have you with us today on faith and finance live i'm rob west we're taking your calls and questions today 800-525-7000 let's head back to the phones mike's in saint joseph missouri go ahead sir yeah i i got a issue i got money in my savings account i want to move it over to a cd they got a seven month cd going for 4.55 percent and i want to know if that'd be a wise deal and i got also i got a 403b that's be coming up my retiree it's got to go into an ira account so i don't know what to do with that i want to make that work for me not again sure yeah no doubt uh let's start with the uh cd question so you said this is in your savings account would you consider this your emergency savings or is this separate from that no this is separate from it it was okay when my mom passed away was set mine say i took over the account i see okay pass away very good how much is in this savings account that you'd look to put in the cd i was i got 48 and i would think about putting 20 000 in okay yeah i mean i think as long as the time horizon is right um you know if this is money you don't need for the foreseeable future this could be a great uh amount of money to go ahead and invest so you could take advantage of the fact that the stock market is down and put this to work similar to your 403b except this would be in a taxable account so you wouldn't have uh you know the tax deferred growth but you could still invest it and even though the market may go down before it goes up eventually it will recover and move to higher ground and so you could if you're willing to take a little bit of risk with it you could get this money working for you again as long as you have a 10-year time horizon or more if this is though money you'd rather keep a little bit more safe and not take any risk with it then absolutely taking advantage of these higher interest rates with a guarantee backed by the fdic as long as you use a fdic insured bank then that cd should be guaranteed that's a great rate for seven months you might as well take advantage of it if you wanted to shop it around and compare it to a few other bank options you could do so at bankrate.com you could search by the cd options put in the the length of term you're looking for and it'll show you the very best rates in the country at online banks and credit unions and others and you could compare that to what you're looking at but the rate you're describing sounds good so i think that's a good option if you're not you know willing to take any risk with it. With regard to the 403b how much have you accumulated in that account? 30,000. 30,000 okay yeah so what you'll want to do when you separate from service is roll that out to an ira and you'll probably you've got a couple of options you could use a robo advisor which is basically an automated process you would answer a series of questions and then the robo advisor the algorithm would build a very low cost indexed portfolio so what that means is you would use exchange traded funds that mirror basically by the broad market indexes so you may own the russell 1000 or the s&p 500 or the dow 30 and then you'll have some bond indexes in there as well it's a very low cost way just to capture the broad moves of the market and you don't have to worry about picking the investments that would be one option another option would be to use our friends at soundmindinvesting.org that's soundmindinvesting.org they could make some mutual fund recommendations to you if you wanted to be a little more actively managed or you know you didn't want to use the index passive approach and you could take their mutual fund suggestions and buy those funds you know in that ira once you move it over so that would be the way that i would go with that 403b once you separate from service does that all make sense though yeah that makes sense to me yeah okay good so i think the cd is a good option but if you've got a time horizon of 10 years you might want to consider investing it and then beyond that i think rolling it out to an ira once you separate from service and then either using a robo advisor like the schwab intelligent portfolios or a more hands-on approach like soundmindinvesting.org both of those would be great option for you thanks for your call mike we appreciate it to tampa florida harold go ahead sir yeah hi um thank you for taking my call sure my wife and i um we want to pay off our house and continue to save for retirement and we have money in a money market account okay uh so what is your age and your wife uh my wife is 52 i'm 55 okay very good and you said you are saving for retirement is that right yes okay and how so do you all have retirement plans at work or some other vehicle well i'm um i get va disability and i'll take my social security now okay i have that um my wife does because she's a school teacher so she has the frs okay yeah florida retirement system sure and then do you do you believe harold between what she will receive through the frs plus your va benefits and social security that'll be enough to cover your expenses in retirement well that's what uh i don't i'm not really sure on that that's why we wanted to know get paying off the house and then we can totally start putting money more money into the retirement system yeah and they are just retiring yeah got it yeah i mean i think you've got two options option one is you deploy that money that's currently sitting in money market while the market's down you get that invested for you uh and maybe you try to you know if you're not fully maxing out her retirement plan you could do that although she may not have that option through the florida retirement system so you could just invest it in a taxable account or an insurance product and keep the mortgage and just try to set a goal to have it paid off by the time you all reach retirement and fund it out of you know that the principal reduction out of current cash flow versus just taking the lump sum and paying it off option two is you say no we just have a conviction to be out of debt we want to own our home we've got this money in money market so we're just going to wipe it out as long as you're not taking all of your available excess and you've still got your emergency fund then i'd be okay with that but then just recapture that monthly mortgage payment that you were sending and start socking that away for the next you know 10-15 years while she's still working i could go either direction it really comes down to which you feel most comfortable with does that make sense yes it does okay so i think either of those options would be good i think you guys could probably also benefit from a financial advisor who could do some retirement planning with you herald just to determine based on all the income sources you'll have in retirement and your lifestyle whether you have enough saved you can find a certified kingdom advisor at faith phi.com thanks for your call we'll be right back stay with us great to have you with us today on faith and finance live coming up in our next segment bob doll stops by with his market commentary and analysis we'll look forward to hearing what bob's thinking about at the beginning of a new week in the markets but first let's head back to the phones taking your calls and questions today to chicago we go hi lisa go right ahead hi thank you so much for taking my call my question is we have less than 10 years left to pay our markets off and we were thinking of purchasing a vacation home would it be smart to borrow against our home for that i keep hearing that that's what you should be doing but i just wasn't sure yeah well the reason that you're hearing that is because that's going to be the least expensive way to do it from an interest rate standpoint if you were to go out and get a mortgage on a second home it's going to be a higher rate than you would get if it's a mortgage on your first home and because you all have good equity in that house folks are just telling you well you might as well take advantage of it and the cost of funds is lower and so it's a win-win the challenge is if something came out of left field and you were unable to make that mortgage payment there was an interruption in income you had a major financial calamity now all of a sudden because you've attached that mortgage to your primary residence you're putting your primary residence at risk as opposed to being collateralized only by the rental property or vacation home as as you might say if you were to lose that you would still have your primary residence intact so that would be the reason that you wouldn't want to put it on your primary residence because you want to keep these loans separate you want to be able to get to a place where your current property that you live in your primary residence is owned free and clear completely paid off and this approach would be taking you backwards adding more debt to that property so i think at the end of the day there's the financial side which is the lowest cost uh you know source of funds in terms of the interest rate and the terms and then there's the non-financial side as well which is the peace of mind of knowing that you own your home your domicile free and clear talk to me just about your priorities there as you hear me describe that no that sounds about right my concern is having more time to pay on my mortgage like i want to be done with my first mortgage soon yes yeah and this would be obviously the opposite direction so i think what you might want to look at instead then lisa is just you all stay laser focused on getting that primary residence paid off once and for all as you're able and then as long as you've got some surplus funds for a healthy down payment at least 20 i'd love for you on a second property to put even more than 20 down as long as you've got that working capital available then just go ahead and get a loan on that second property that's collateralized by that property now the challenge is we're in a high interest rate environment right now as it is even with the most competitive rates and then you're going to pay even more than that because it's a second home so one option might be you all take another summer or you know whenever you normally would go to this vacation property and you all rent or use you know verbo or or airbnb and then wait till interest rates come down and then make the purchase obviously that timing may not work out for you but that's at least something to consider does that make sense yes absolutely okay okay very good so i think the the direction you're sensing around not putting this on your primary residence getting that paid off i concur with that absolutely folks can make a case that you're going to be spending more and you will but i like the non-financial implications of you owning your home and then i think the rest of the question is just the timing on that purchase given what's going on right now with with interest rates they just happen to be very high right now i think a year from now they will be lower hope that helps you lisa thanks for your call today we appreciate it tim new mexico hi linda go ahead hi thank you so much for hearing this um so i have a situation where i have my name is encumbered to a 55 000 parent plus it's actually two loans rolled into one for my adult daughter from her undergrad she over the course of the past many years has been taking about half of her tax refund money and putting it towards those loans annually instead of making monthly payments she carries other debt as well um she is married has two children recently became pregnant with her third and her husband left her and so she's now in the middle of a really awful situation in her life and pending divorce i myself um went through a divorce about a year and a half ago and i retained the marital property um it is in my name it was ceded to me the mortgage which i believed to be in both my and my ex-husband's name turns out was just in his name my name was not on it although i did sign all the papers um and so now per the court order i'm responsible for seeking an assumption from him to get the mortgage put into my name i applied to my current mortgage company last year and i was denied um they eventually told me that it was based on excessive debt and insufficient income they would not even give me the paper tell me what that debt was but i'm assuming since i don't have any revolving credit card debt or a car loan or anything like that that it has to be this parent plus loan sure and so my question is i've looked i've talked to lots of different government agencies and you know while we can defer it again we can you know work out a different payment plan for you the payment itself is not really too much for me to handle it's just the fact that i'm encumbered by this huge amount of debt yeah and as far as i can tell i'm not finding that there are any sort of programs like they do offer with a regular student loans for loan forgiveness if you work so many years and you know these specific areas of work and things like that for parent plus loans it just seems like there is no way to get these loans forgiven even partially well uh the bottom line is you are right in the sense that you're legally responsible and so the parent borrower is ultimately responsible for paying the parent plus loan and it can't be transferred out of your name and therefore because you have that legal responsibility it is absolutely included in your debt to income ratios because you owe the debt and that's probably in fact what's creating the problems for you now to the second part of your question though the parent plus loans absolutely are able to be forgiven in similar ways to you know non-parent plus loans as long as they're a part of the direct loan program or they were a part of a federal loan consolidation president biden's new student loan forgiveness regardless of what you think about whether or not he should or shouldn't have done that and i would be in the camp of not the parent plus loans are eligible for that they're eligible for the income based repayment options they're also available the public service loan forgiveness is potentially able to be for if it's a parent plus loan you're able to get that forgiven so there are plenty of options but they do require you to comply with the various rules and regs whether that's working in the public you know sector for 10 years with 120 on-time payments or you know being under the income cap when it comes to the biden forgiveness and obviously that's still in question as to whether or not that's going to be actually go into effect but there are going to be options there i think the key is most people just don't qualify for those options because they're very hard to get and so if that's the case you're just going to have to either you or she will ultimately have to get this paid off for it to be not factored into the debt that's out and available against you when you're taking on new loans does that make sense right yes it does thank you so much okay you're welcome linda it sounds like you guys you guys have been going through it we'll just ask the lord to intervene here and bring wisdom and provision and just his grace in the midst of these challenging situations we appreciate you being on the program today may the lord bless you well we're going to take a quick break folks when we come back bob dole stops by we'll get his insights on the markets stay with us much more to come on faith and finance live hey thanks for joining us today on faith and finance live i'm rob west before we head back to the phones bob dole is with us he's chief investment officer at crossmark global investments where investments and values intersect and bob here we are off to the races on a new week one day delayed and market can't figure out which way to go i guess a lot of that has to do with the uncertainty around the debt ceiling huh yep the debt ceiling is certainly front and center most of us are believing it's going to get through but it could be bumpy getting there all kinds of hoops to jump through but it looks like a done deal the ai nvidia phenomenon is dominating discussion as well and underneath the surface rob we've talked about this before the narrowness of the market with the s and p 500 up but nine and a half percent so far this year nasdaq about 25 the average stock is down so equally weighted averages are down the dow jones industrial average down year to date and there are 11 sectors in the market eight of them are down are down so you have to be in the right stocks to have made some money this year the average stock has not performed yeah that's interesting it just makes this a stock pickers market which is a challenging environment especially for guys like you who have to wake up and decide what to buy and sell each day bob a few areas of the economy i'm interested in today one in particular is just the housing market i was reading earlier today how the s&p is saying that perhaps the home price declines may be over nationally home prices in march were almost a percentage point higher than march of 2022 you know we're still seeing a lot of strength i guess overcoming the high interest rates with the low supply what are your thoughts on the housing market in this country pretty incredible you're absolutely right who would have who would have thunk it as they say and i think you hit the nail on the head when you talked about supply there's not a lot of housing supply so if you and i want to go buy a house we have trouble finding it and when we do find one we like you can't bid low and and get it in this environment now look this assumes that is housing is seen it's worse is that the economy is okay if if we end up in a recession even if it's mild i suspect house prices will fall again a bit okay interesting so probably taking a wait and see especially given where interest rates are right now might not be a bad idea bob china obviously back in your dolls deliberations this week as you talk about just some of the deterioration and what they're seeing economically share that with us sure china a force to be reckoned with but they're certainly struggling another covid wave after the horrible wave they had earlier we all know there's been a property bubble there lots of buildings built with debt and nobody in them as it were that is burst to some degree so that's credit problems to be reckoned with and finally a longer going situation the aging of the population of china china's population is aging faster than almost any other country in the world so these three things means china's economy is struggling a bit and is slow yeah no doubt about it all right bob then coming back home to round us out just as you look at the overall health of the economy we've just finished an earning season we continue to get economic data housing markets holding up labor market seems to be holding up where do you think we go from here just based on what we can see at this point so i'm still in the skeptical school that says when the fed raises rates from zero to five percent which they did in a 13-month period ended not so long ago that has consequences and we've seen some banks fail as we've talked about in earlier weeks but the economy's still hanging in there i think there will be some economic slowdown as a result of those interest rate increases so you're right to observe until now things have looked better than most people thought but i'm not sure we're gonna have a great economy for the remainder of the year not a horrible decline just sloppiness and maybe we'll call it a mild recession yeah all right very good bob always appreciate your insights my friend thanks for stopping by my pleasure all right that's bob dole chief investment officer across mark global investments you can learn more at crossmarkglobal.com while you're there sign up for his weekly dolls deliberations that's his weekly investment commentary that i rely on each week to get the pulse of the economy and the markets all right back to the phones to round out the broadcast today we'll head to des moines hey diane thanks for calling go ahead hi rob thank you for sharing your knowledge with the rest of us who aren't so financially capable my question today is regarding banks that send out credit cards that they give you a bonus if you spend so much in a certain period of time if that's a good idea to have an extra card that you may or may not need or use except to get the bonus money back what's your opinion about that you know i'm not a big fan of that just because i don't like the idea of really having more than one credit card open unless you need it i just don't think there's a need for it number one it gives you temptation to spend money you don't have because that credit card sitting there unused number two it it gives you the ability to have one more account potentially compromised so you've got to stay on top of it and continue to check it even if you're not using it and so i think for that reason you know taking advantage of these offers while they're nice and you may want to consider them when you're legitimately looking to make a change to open a new card we can get kind of in this game of chasing the latest you know deals and rewards and we end up with this plethora of credit cards that for the reasons i mentioned i just think that's counterproductive not the least of which is every time you open one of those cards you're going to have a ding on your credit although it's temporary and it'll come back i think i would just be careful of opening a card purely for that purpose i think it's better to find the card that's the right fit for you i love rewards so you ought to find a card that gives you a great cash reward or if you're a traveler that gives you great travel rewards as long as there's no annual fee and as long as that's the card you're going to use and when you use it you're only using it for budgeted items and then you're paying it off every month at the end of the month if that's the way you're doing it then i can certainly get on board but continuing to open additional accounts for these kind of one-time incentives i think ultimately is counterproductive okay so if you do if you actually do pay it off every month and you don't use it for living expenses that are over and beyond what you already have the money set aside for you would say it's okay or no don't even bother it's not worth the extra the extra compromise or chance of compromise to your credit yeah i guess i just wonder where it stops i mean what about next month when another incentive comes in and then the month after that and then all of a sudden you've got four or five accounts open and you know you've got to keep up with them all and not to mention that that's all just kind of sitting there waiting for you to access it so i would just say let's keep it simple let's pick one card and stick with it if you're going to make a change make a change but i wouldn't be opening accounts purely for that financial incentive for the reasons that i mentioned i hope that's helpful to you diane thanks for your kind remarks about the program as well i really appreciate it to west palm beach florida hey mike go ahead sir hey real quick rob um i appreciate you taking my call i'm wondering about putting money in into savings into um one of these banks there's a lot of these banks that i'm not familiar with but their interest rates uh seem much higher um so i'm wondering how safe are those small banks versus the big the big ones that you know everyone knows that are nationwide yeah i'm okay if it's not a household name i would check it out at bank rate.com just to see they have a rating service they'll give you a rating the most important thing you're going to want to be looking for mike is that it's fdic insured that's going to ensure that even if that bank were to fail that your money is protected and going to remain accessible so as long as you've got the fdic insurance uh that's the key if it's a if it's a credit union make sure that they have ncua insurance which is basically equivalent to the fdic just for credit unions uh it's less important to me that it's a smaller or lesser known bank but again bankrate.com would allow you to see based on a five-star rating system how they rank for not only the competitiveness of their rates but customer service and a few other factors it'd probably be worth checking that out because if the online reviews say the customer service is terrible or you know folks have had problems uh just kind of getting things done or getting them to be responsive then i'd probably heed those warnings but apart from that if you've got the fdic or ncua insurance that's the main thing all right yes sir thank you rob i really appreciate it absolutely mike thanks for your call uh quickly to indiana hey jessa go right ahead hey um so i've got a larger medical bill but i just found out i can get a 30 discount if i pay it off in full um so i do have the money liquid in my savings to pay it i just don't want to get stuck um next year if i have another large medical bill when my deductible starts over without any extra funds yeah yeah so let's talk about it so what would the debt be if you were to pay it off in full and get that deduct that reduction um it'll be about a two thousand dollar discount so it would be like fifty three hundred that i need to pay all right and what do you have in liquid savings um roughly thirteen thousand all right and what are your monthly expenses total roughly um when they're a necessity i'd say about four thousand okay let's say it's five um so you've got a couple of months worth of expenses in the bank right now uh and if you were to knock this off you'd probably go down to about one month's expenses if this was paid off how much surplus would you have every month to add to your emergency savings to try to build it back up um if i aggressively saved i could have it paid back by like july of next year so okay like three four hundred dollars a month yeah and any i mean do you see anything on the horizon that could cause you to need to tap into that i mean do you have a job situation that's a little shaky or do you have any kind of you know major expenses coming up things like that no not that i can see other than um possibly another large medical bill okay got it yeah i mean i mean that couple of thousand dollars that's real and so if you all can get that knocked out and you've still got at least one maybe two months worth of uh emergency reserves and you can have it replenished uh over the next year i'd say go for it next time around you may not do it because you may not have the money but at least this time i think taking advantage of that makes a lot of sense thanks for your call jess so we appreciate it faith and finance live is a partnership between moody radio and faith five thank you to lynn gabby t dan amy and robert couldn't do it without them hope you have a great rest of your day come back and join us tomorrow we'll see you then bye