Managing Money Tensions in Marriage

The handling of finances is one of the major emotional battlegrounds of any marriage. Lack of finances is seldom the issue. The root problem seems to be an unrealistic and immature view of money.

I am Rob West. That's a quote from David Augsberger's book, The Meaning of Money in Marriage. If money is a source of conflict in your relationship, stay tuned. We'll explain how you can restore peace. Then we'll take your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial journey. Well ask any couple what causes the most stress in their marriage and they'll probably say money. However, the problem isn't usually money itself, or even lack of money. No, financial tension in a marriage more often springs from bad attitudes, unrealistic expectations, and wrong assumptions about how to handle money. Part of the problem is that everything has a money angle. Most of our plans, desires, hopes, and dreams involve some kind of financial activity.

That means you're constantly facing emotional questions about how to spend, save, borrow, earn, and give your money. And chances are, you and your spouse don't always agree about those things. On top of that, you have personality differences. Maybe he's a saver, she's a spender, or she loves yard sales, he prefers buying new. Or he wants to borrow to buy a car now, and she wants to wait to pay cash. All this disagreeable disagreement can stem from childhood experiences, or long-standing expectations, or even misunderstandings about how finances really work.

Put it all together, and it's a recipe for conflict. If you're married, I'm sure you know what I'm talking about. There's another factor at work here in the matter of money and marriage. As we've said so often, our attitudes and actions relating to money are an indication of what's in our hearts. Sinful attitudes like greed, selfishness, anger, and resentment can affect how you feel about money, and how you relate to your spouse about the family finances.

Let me offer four recommendations that I hope will change the way you relate to your spouse about money. First, remember why God brought you together. Christian marriage is a testimony to the world of the love of Christ for His Church.

It's meant to be a picture of peace and godly unity. Christian marriage is also an opportunity for spiritual growth. Proverbs 27 17 puts it this way, as iron sharpens iron, so one person sharpens another. Being sharpened by your spouse in the area of finances can be uncomfortable, but it's worth the effort to work things out.

That brings up my second recommendation. Communicate. If you're out of sync about money matters in your household, it's time for a heart-to-heart talk about money. In Ephesians 4, 2, and 3, Paul writes, Be completely humble and gentle. Be patient, bearing with one another in love. Make every effort to keep the unity of the Spirit through the bond of peace.

Here's how you do that. Set aside some uninterrupted time together. Confess your fear, selfishness, and resentment about money to the Lord and to each other.

Ask Jesus to be Lord of your financial life. Ask Him to help you work towards unity in the area of money management. Commit to love each other in this area the way you promised to do on your wedding day. Above all, be patient with each other.

These are very personal issues, but your relationship is more important. Make it a point to look for compromises and middle ground. If you're a spender and your spouse would rather save every penny, create a plan that allows for a bit of both. That brings us to my third recommendation for financial peace in marriage. Make a budget together. Your spending plan can allow each personality a little leeway, and a plan made now will take the pressure off both of you later when you're making financial decisions.

My final recommendation is going to be very difficult for some couples. If you've been keeping your finances separate, now is the time to bring them together. Separate finances are a dangerous step towards disunity in your marriage. Many couples think separate finances will help them avoid fighting about their differences. But the fact is, this isn't his money and her money. It's not even your money together.

It's God's money. Now, let me close with the passage on love that's so familiar from 1 Corinthians. It's the ultimate answer to financial conflict in marriage. Love is patient. Love is kind. It does not envy. It does not boast. It is not proud. It does not dishonor others. It is not self-seeking. It's not easily angered.

It keeps no record of wrongs. All right, your calls are next. The number, 800-525-7000.

Those lines are open 24-7, 800-525-7000. I'm Rob West, and this is Faith and Finance Live. We'll be right back. Well, we're thankful to have you with us today on Faith and Finance Live.

I'm Rob West. It's time to take your calls and questions today on anything financial. We'd love to help you tackle whatever you're thinking about financially and help you do that through the lens of a biblical worldview. The number to call today, 800-525-7000. Our team is standing by, and we have lines open ready for you.

So again, the number, 800-525-7000. We'd be delighted to hear from you. Let's begin today.

We'll start in Philadelphia. Hi, Ray. Thanks for calling. Go right ahead. Ray, are you with us?

All right. It seems like we're having a little trouble with Ray's line. We'll see if our team can pick that line up and get that straightened out, and we'll get Ray right on the air. As the lines are filling up, we do have, again, a room for maybe one or two more questions.

800-525-7000. Hey, before we dive into those, let me let you know, first of all, Bob Doll will be by a little bit later in the broadcast, actually, in our final segment to weigh in on the markets and the economy. He joins us each Monday. Bob is chief investment officer at Crossmark Global Investments, a Wall Street veteran. We always look forward to his analysis, especially in light of a busy week last week. Obviously, Fed data out, an increase in interest rates, new inflation data last week, which moved the market, a lot of crosscurrents. Bob will weigh in on all of it. Stock's green across the board today, but we'll find out what Bob is watching in the days ahead. And, of course, more of your questions today as well.

800-525-7000. Let's try to go back to Ray. I think we've cleared that situation up.

Ray, are you with us? Yes, I am. Thank you for taking my call. Excellent, sir.

You're very welcome. Go right ahead. So I was wondering, the proper way to tie, is that after taxes or before taxes?

Seeing that taxes are so high, 20-30% of your income is swallowed up by the government. What is your opinion on that? Sure. Well, first of all, I appreciate the question. Obviously, your desire is to honor the Lord in your giving. When we look at New Testament giving, we know that it should be cheerful, it should be given freely, it should also be proportionate, and if in doing a proportionate gift, you want to apply the principle of the tithe from the Mosaic Law, I think that's a great place to perhaps begin. It's systematic, it's a way to give on the increase. I think the key is to ensure that we're doing it with the right heart posture, and if we want to look at giving on the increase a tenth, we would say, what is my increase?

Well, your increase would be your first fruits, or that which comes in off the top. And so I would say, if we're going to apply the principle of the tithe, we would give on the whole amount. Larry Burkett, the former host of this program, would often say, tongue in cheek, well, depends on whether you want to be blessed, gross or net. And I think ultimately, you know, we're placing our trust and dependence in the Lord whenever we give. We don't want to do it out of an obligation or for compulsion, but at the same time, we want to do it freely, as unto the Lord, as an act of worship and our demonstration of trust in Him. And I think, as you said, you know, what we give is ultimately between us and the Lord, so, you know, that number is totally up to you.

But I think if we're going to apply the spirit of the principle of the tithe, it would, in fact, be on that gross amount, the first fruits, before anything is taken out. Is that helpful? Thank you very much.

Yes, absolutely. Thank you very much for your explanation. I really appreciate that and everything that you do. Well, thank you, Ray. That's very kind of you. Thanks for calling today.

Eight hundred five to five seven thousand. We've got a few lines open. Let's head to North Carolina.

Chris, you'll be next on the program. Sir, go ahead. Hey, Mr. Rob, how you doing this afternoon? I'm doing great. Thanks for asking. Go right ahead. Mr.

Rob, I was curious. I recently had to leave my my job of over 20 years due to disability. And I'm currently on SSDI and also have a source of income, which is a long term disability insurance that I paid for. Yeah. The question is, my 401k, when I rolled it over into a traditional IRA with the company, they're telling they told me that I can not make contributions to this account because I did not and not considered to have earned income. That's right. So I'm just curious if there's a path that I can take for investment for retirement.

And I know it's. It's difficult, some some things I've looked up on the Internet and things of that nature, but I'm not really sure which path I should go. If you can just help me, I would appreciate it. Sure. Do you planned or is there any way that you might be able to work in the future? Well, I'm legally blind and I have a progressive disease.

It just gets worse. So I don't drive and I live in a pretty rural place. And so the prospects are not not great. No, sir. OK. And are you married, Chris, or single? I am married.

OK. Yeah. So that would be one option is through a spousal IRA. You will, in fact, need to have earned income in order to contribute in the IRS defines earned income as wages, salaries, commissions, tips, bonuses, net income from self-employment does not include disability, Social Security, interest, income, things like that. So without that earned income, you are not going to be able to contribute. But I believe what may be able to happen and I would check with your CPA on this is you may be able to have your spouse contribute to an IRA, even if she is not working as long up to the limit. So that might be one way that you could go. You'd have to open a separate account, a separate IRA in her name, but that might be one option for you. Unfortunately, I think the the investing you're going to have to be able to do for retirement is really going to have to be there through a taxable account where you're just socking money away and investing it without getting that tax deferral or you could use an insurance product like an annuity.

But unfortunately, I don't write off hand. You know, you're going to have to have earned income. All right, I understand. OK, we but but here's the bottom line is that, you know, the key is as you have surplus, you know, go ahead and sock that away and build it up. Obviously, we always would prefer to do it in a tax deferred environment. That's just going to ensure that the the the taxes don't create a drag on the investment returns. But apart from having that option, you being able to just sock money away and get it growing for the future is still, you know, a possibility.

And I think the key is to keep your lifestyle at a minimum and save as you're able. But we appreciate you checking in with us. I'm so sorry to hear about your health condition. We'll ask the Lord to heal your body and give you the ability to contribute to that long term savings.

God bless you, Chris. Thanks for calling today. Eight hundred five to five. Seven thousand is the number to call again. Eight hundred five to five. Seven thousand. We will head right back to the phones after the break.

But I want to be sure we give those folks enough time. Let me tackle a quick email. This one says from Kathy, I'm struggling to get out from under credit card debt and was wondering if you can recommend a consolidation loan company. I got trapped in a cycle of debt when I became a single mom. I paid them off, but then my son got really sick.

Kathy, so sorry to hear about your son's situation. I don't recommend loan consolidation where you take out a new loan to replace the old debt. I realize it can perhaps make some sense to get that credit card interest rate down, but I don't think it's going to break the cycle. Instead, I'd use a debt management program.

Our friends at Christian credit counselors dot org can help you get those interest rates down and help you pay that off on average. Eighty percent faster. Much more to come. Stay with us. Great to have you with us today on faith and finance live. I'm Rob West. We're taking your calls and questions. We have three lines open. Eight hundred five to five.

Seven thousand. Let me just clarify one thing from our previous caller, Chris. In the previous segment, we were talking about the fact that you have to have earned income in order to contribute to an IRA. But a non-working spouse does not have to have earned income and would be able to contribute up to the level either the contribution limit, which is sixty five hundred dollars for an IRA under the age of 50, or the amount of earned income that the spouse has. So in the case of Chris, he doesn't have earned income because he's on a disability but if he had a spouse who was working and she had, let's say, enough earned income to get up to that sixty five hundred dollar limit, then he as a non-working spouse would be able to also contribute. But the bottom line is one of the two spouses has to have earned income and you could contribute up to that earned income or the limit for the year. But one of them does have to have earned income in order to do that. So just want to make sure that was clear. I didn't recall whether Chris's spouse was working or not.

And if she's not, then that would prevent both of them, unfortunately. Let's get back to the phones. We're going to head to West Palm Beach. JC, thank you for calling.

Go right ahead. Thank you, Rob. Thanks for taking the call.

I do have a pleasure of supporting your ministry with my qualified charitable distributions. Oh, wow. Thank you. What I've signed on lately to IRS.gov to check my I-Bond balances.

Yeah. I'm being switched over. It's being asked to log in using ID.me and to create an account with ID.me. It looks suspicious. Is it legitimate? It is legitimate. So the IRS has partnered with ID.me to provide identity verification for IRS applications. So with, you know, individual taxpayers and tax professionals are being required to verify with ID.me for a secure login. And then once you do and you prove your identity with ID.me, you'll have to upload some documents and take a video selfie and fill out personal information. And then once that's complete, taxpayers then can access the IRS application for which they verified.

So it is legitimate and it is something the IRS has done to just strengthen their identity checks. Well, thank you. I listen to your show almost daily and I've not heard you cover this topic before. So maybe if you did, I missed it.

Thank you very much. One more quick question, if I may. Sure, JC. With the interest rates at five percent or higher on a one year bank CD at the current rate of the I-Bond, would you recommend perhaps, I've had it for more than a year, cashing it in and converting over to the bank CD?

I would. Yeah. You know, with the I-Bond rates falling and I think they will continue to fall, we'll get the next published rate at the end of October, it'll continue to come down just because inflation has been dropping. And when it was up at nine point six, it was phenomenal.

And then it was still good at six point eight. But now in the fours and falling, it's going to be less attractive, similar to what it was before inflation, you know, went on that big upward trend to where we got to 40 year high inflation. So yeah, I think if you're beyond the one year mark, I'd probably go ahead and pull that out.

You know, the equivalent of using a high yield CD at five and a half or so would be a great option for you. Wonderful. Thank you very much for your ministry. Take care. Thank you, JC. I appreciate that.

Very kind. To Michigan. Hi, Darcy. Go ahead. Hi, I'm still in Ohio on 90. But anyway, I'm calling as a parish nurse.

One of the patients that I was put in touch with through, boy, I need to get rid of that. Anyway, I'm trying to help a lady who is 47 with a 14 year old son who has ovarian cancer for the third time. She does have a fighting chance, but it's hard to know about the long term. She has managing and I've encouraged her to hold a job that she's doing very, very well at helping disabled adults. But it only pays $17 an hour as a nonprofit.

It cannot pay more even though they have indicated they'd like to pay more. But they're very good to her and very flexible with their schedule. So I'm encouraging them to stay in that. And she has no extra energy to take an extra job right now. She's doing double chemo. I am offering I'm I'm encouraging her to consider me giving her sort of a bridge loan. She's in a house that is way overpriced for her budget that she could sell and probably downside to find a better place. She can't just live in an apartment because she has a very large dog for her 14 year old son and she feels that animal is important for sort of his psychic health right now. You know, she's trying to stay in the same school district and all that and keep things as positive. He does not know she actually has cancer. She's sort of hiding it from him. But anyway, because he's already lost his father.

She lost, they lost their husband, she lost her husband and her mother and her father in about a seven month period at the beginning of COVID. I am I am very well, I set up pretty well my ex Vietnam. I'm losing you a little bit, Darcy, maybe because I know you're you're out on the road. And so we're, we're getting a little bit of distortion. Give me the question, if you will.

Okay, okay. Two things. She found some debt recently. The most important thing you could answer she found some debt recently from her husband.

She's trying to find out if she's responsible for it right now. I'm encouraging her to pay off the house with my help be giving her a bridge loan so to speak to the next house with 20,000 would be repaid to me upon the sell the house 20,000 would be hers. I just give it to her because I have that extra funds right now.

I really do. And I, I am encouraged to take that just pay off the house rather than to do this small little debt. I think the debts of maybe about they're saying about 2025 but we're hoping it will be much less that she'll be responsible for this someone helping her send out letters or statements. So and is your question whether it's okay for you to make her that gift? Is it okay? In your humble opinion?

Someone told me I was maybe interfering with God working directly with her. I got it. Yeah. All right, let's do this. I've got to take a quick break Darcy when we come back. I'll give you my thoughts.

And maybe you can just listen on the air since we've got some distortion. We'll be right back. So thankful to have you with us today on Faith and Finance Live. I'm Rob West. We're taking your calls and questions today.

Just before the break we heard from Darcy. She was on the road headed toward Michigan. She's a nurse. She's in good shape financially and she has a friend in need who's been in a really difficult spot financially. As a result of that she's wanting to step in and make a gift to her of $20,000 and another $20,000 as a sort of loan to get her from where she is and to the sale of this home to be able to relocate. And she has somebody else in her life who's saying that perhaps she shouldn't do that, that she's not trusting the Lord to provide for this friend. And I would just say that I love your generous heart.

You know, sometimes the Lord uses other people to help those in need. So the fact that you're kind of have your eyes open and seeing this need for somebody that is in your life on your path and you want to be of help to them, absolutely. You make that gift and I think that'll be a real encouragement to her during this difficult season. As for the portion that you're going to consider a loan, I would just say make sure that that's in writing just to make sure there's no unmet expectations or confusion about that. I think it would be wise to fill out a promissory note even if there's no interest being charged and that way you and your friend could sign it.

Everything would be spelled out there so there's no confusion about the term, the amount of the monthly payments, or what is due upon the sale of this property. Again, that's just to keep all the communication clear so there's not any damaged relationships if one person is under a different understanding than another. But obviously with the gift portion, you just make that gift and I'm confident that'll be a real blessing.

So I would concur with you Darcy. This is a wonderful idea and something that I think will be a real blessing to her. Thanks for calling today. We appreciate your call. Have safe travels. You be careful out there on the road. West Palm Beach is where we're headed next. Hi John, go ahead sir.

Good afternoon. I am calling because my sister is about to retire. She was widowed and I was wondering if she is able to collect her social security starting at 62 and then when she gets to the maximum age 67 to start collecting her husband's because his would be a higher amount or did you just start collecting his now at 62? I'm just not sure how that works.

Yeah, that's a good idea. She can absolutely file for her own benefits as early as 62. She would lock in that roughly 30% reduction on her own benefit and then she'd have the ability to switch to a survivor benefit at full retirement age now 67. And if that's higher than her benefit that she's taking now at 62, then she'd be able to take the higher of the two.

And that's a very common and effective strategy. So I like that a lot. Okay, fantastic. I just want to make sure that I know they can't collect both at the same time, but I just want to know if she could start collecting hers early so at least she can reap the most benefits of both. Yeah, that's exactly right.

We want to get that checkup as high as we can so she can lock that in, you know, for the rest of her life and the ability to hold off on taking his and switching to that survivor benefit later makes a lot of sense. So thanks for checking on that, John. We appreciate you calling today. 800-525-7000 is the number to call. Let's head to, well, we'll stay in Florida, Ellington. Tracy, go right ahead.

Hi, Rob. My question is about pension funds. My husband retired after 35 years and he has the option to take a lump sum pension or an annuity. He also has the option, if he's taking a lump sum, to leave it with the retirement program until the GATT rate gets lower. And we just want to understand what we should be looking for if we should decide to postpone taking the lump sum. We know that it's tied to the 30-year treasury and it does move with interest rates, but right now the GATT rate is higher than it has been and of course the goal is for a lower GATT rate to get the most amount of pension possible. So there's a risk in leaving it and a risk in taking it that we may be missing out. So we just kind of want to know what to look for and to see if there's any way to forecast what's going to happen.

Yeah, yeah, very good. Well, as you said, it's pegged to the 30-year treasury bond interest rate. It's basically a benchmark set by the guarantee corporation, the pension benefits and guarantee corporation for calculating that lump sum distribution from a defined benefit plan, which is what your husband has.

Right now it's just under 4%, I think at 3.8%. When interest rates are higher, the lump sum payment will decrease. So if the 30-year treasury rate is low, then you'll get a bigger lump sum. If rates are higher, you get a smaller lump sum.

So that's why it could, if you have the ability to do so, waiting until those rates come down, which they will probably starting next year and as interest rates fall would allow you to maximize that lump sum payout over time. So do you have the ability to be flexible on when this is set? Yes, we do. We do have that ability to say we can wait if we want to. Okay.

Yeah. So if you wanted to wait, I think that and you're going for the lump sum option, which is often I think a great way to go. If you're healthy and you prefer a consistent income stream or perhaps you're concerned about the reliability of your retirement income, a lot of folks will take the annuity. But if you're comfortable kind of assuming that risk and investing that as you see fit or hiring somebody to do so, I like the option of having that lump sum, especially if you can maximize it just because then you have the ability to access that principal balance. If you need it down the road, you'd also have the ability to have something that you could pass on either to charity or to heirs.

So I think giving that lump sum payout often is a great option for you unless there's just a gap in your income and you just want the peace of mind to know that you've got that payout for your life plus his, and that allows you to sleep a little better at night, then that's where folks will take the annuity option. Does that make sense? Yes, it makes sense. Our only concern about leaving it is the company itself, whether they are sold or they're not doing really well. Let's put it their stock is very low. And I know pensions are protected. But that is our only concern about leaving it is if the company gets sold, you know, once these funds are, you know, once these funds are, you know, taken or left there, if there's any effect on whether the company sold or not. Yeah.

And the the assets of that annuity would be or that defined benefit plan would be protected. So you know, I don't think you have to worry about that piece of it. So I but you know, and we're not talking about a whole lot of time here. I mean, I think we're probably talking 12 to 24 months that you would be waiting. But if you all would feel better, just knowing that you've kind of locked it in, then you could go ahead and take it now. But I think specifically to the the gap rate, you know, we will see that benefit you the longer you wait because those 30 year treasuries will come down over time.

Okay, thank you for the information. I appreciate it. All right, Tracy, God bless you.

We appreciate you calling today. Well, folks, we're going to take a quick break when we come back much more on faith and finance live Amelia Edward Pat coming your way just around the corner plus Bob doll stops by to weigh in on the markets and the economy. Hey, if you haven't visited our website lately, we'd love for you to check out faith fi.com. It's a great place to find a certified kingdom advisor, download the faith by app to manage your spending plan or to support the ministry when you click the gift tab. It's all there again at faith fi.com. That's faith fi.com.

Check it out. We'll be right back with much more stay with us. Great to have you with us today on faith and finance live. I'm Rob West. Hey, before we head back to the phones, it's Monday, which means Bob doll stops by to give it give us his market commentary and analysis. Bob is chief investment officer across smart global investments. Bob, good afternoon to you.

And to you, sir. Bob, it's green across the board today. You know, since we spoke last week, obviously, we've got a tick up in interest rates, the 11th consecutive, but also some good news on the inflation front. So where are you today? What are you watching?

All of the above. Plus, of course, the pleasure of earnings to your point about inflation and the Fed. I would add that the 10-year Treasury yield briefly went above 4% last week.

It's just under that as we speak 395 or so. So rates across the curve are still edging higher, as the Fed raised rates and ostensibly is going to pause from here. So it's back to earnings and they're coming through reasonably okay.

Yeah. So what is what does all that mean then for the prospect of a recession? As we continue to watch this unfold, seems like more. I mean, we had consensus around a recession this year.

Now it seems like there's more people thinking that perhaps and that's a big if there that we could have this soft landing. Yes, the bull would say recession. What recession?

What are you crazy? Everything's fine. Our things are OK. The economy's OK.

The consumer's OK. What are you complaining about? The bear would say not so fast. Remember the Fed raised rates over 500 basis points. They only started 16 months ago. Monetary policy operates on the economy with long and variable legs. So just you wait, we're going to see a slowdown and a potentially a soft or a mild recession.

And I'm still call me stubborn of that camp. And as you know, Rob, we've suggested since the beginning of year a mild recession starting sometime between Labor Day and the turn of 2024. Yeah. All right, Bob, let's revisit once again just the breadth of this market rally. I know we've said early on it was highly concentrated and it seemed to broaden a little bit. As of late, there seems to be a lot of emphasis back on those mega cap stocks. So what do you make of the market action there? Yeah, I'd like to see that broadening continue first five months of the year. Not at all.

June and July. Better, not perfect, but better. Today's another good day for the small stock. The average small stock beat the average big stock. So the attention on the mega cap stocks comes and goes. It's still I think what investors are focused on and those who are winning this year.

There's almost no way to do it unless you've been noticeably overweight. Those mega cap stocks have been underweight almost by definition you're lagging the market averages. Yeah.

Okay. Would that indicate though, Bob, once this market really does turn around? I mean, we know that the Fed hikes are behind us. Maybe rates start coming down. We see that the economy is really strengthening that there's still a lot more room here in the broader market.

Without question, if the premise you just said happens, rates come down, no recession, the broadening of the market will likely continue creating opportunity for those who haven't been in the mega cap stocks to catch up. That's exactly right. Exactly. All right.

Very good. And then finally, just looking out across the rest of the world, anything peaking your attention on that front lately? Well, it's mixed outside the U.S. China is still the big question mark.

Are they recovering adequately or not? And every other day you get a report saying one way and then the next day the other things in Europe are getting a bit better. I heard a report people already now starting to worry about, oh, it could be a cold winter by comparison to last year. And the Europeans are going to pay very high prices for energy. And will there be shortages? Same concern we had last year, but God gave Europe a very mild winter.

We'll see how it happens this year. All right. Very good. All right, Bob, I know you're headed out back on the road. So listen, safe travels and we appreciate you stopping by. All the best. Have a good week. All right.

That's Bob Doll. You can sign up for his dolls deliberations, his weekly investment commentary across Mark Global Dotcom. We'd love for you to check it out. All right. We're going to round out the program today with your phone calls.

We'll head next to Chicago. Amelia, thank you for your patience. Go ahead. Hi, Rob. Thank you for taking my call.

Of course. I I had a remodel project that was my kitchen basement and it started out fine. And then it turned out, uh, did a twist on me and I went from one project to four projects. Oh boy. So that one.

Yeah, exactly. So I had the money for the one project and I had some of the money for the other projects, but then I had to pull from my emergency. Um, so now I'm down like to 14 grand and I was very leery of taking that money out. So I do have some credit card debt. I have 5000 in credit card debt. I'm a teacher, so I don't get paid over the summer. So my next check, my first school check will be mid September, but I really don't want to pay interest.

Um, it seems like I don't have a choice, but maybe you have some ideas for me. Are you on like a no interest period here on these credit cards for a period of time? No, no. Okay. And, uh, you said you had 14,000 left in your emergency fund. What would you say are the total of your monthly expenses on the average month?

About 2700. Okay. So let's just call it three. Yeah, go ahead. No, no, no, no. I have to rethink it.

It's more like 45 4500. Okay. Uh, so you've got about, uh, you know, three months worth of expenses, uh, in the bank right now and you would need in order to pay this off, you'd have to drop down to two months worth of expenses if you took $5,000 and paid it off. Correct? Correct.

All right. And if you didn't have, uh, you know, any credit cards to pay on cause they're now paid off, how much do you think you'd have surplus every month at that point to be able to put back into that emergency fund to build it back up? Um, it all depends because the reason I did the remodel was to rent the rooms. So I've already have two renters, uh, they're short term renters, um, like for two months or so each I have two of them.

Well, one leaves in a cup or on Thursday and one is coming tomorrow. So it all depends on how much income I begin to get because that's the reason I did the remodel to begin to get more income. Okay. And how many rooms do you have?

How many renters can you take at a time? Three. Okay.

And you'll have when this change occurs, you'll still only have one of the three. Is that right? Right. Okay. Yeah. I mean, I think this really just comes down to how much security do you want and what is, you know, do you have good job security?

Do you have any other, um, you know, things coming on the horizon? Obviously by definition, we don't know when an emergency is going to occur and so we'd like that to go below the three months expenses if possible. Um, so you've got two options. One is you put those in a credit counseling program, you get the interest rate down and we just pay on those monthly and then you can accelerate that payoff as you rent out those rooms. But by while you're waiting to get those renters in, you're at least not paying the full interest rate. That would probably be my best case scenario. The other option is you say, I'm comfortable going from three months expenses to two. I'm going to go ahead and take 5,000 out of my emergency fund, drop down to just below 10,000 and then I'm just going to really focus on building that back up. Um, I think either approach would work. I'd probably prefer you to take the first option, which is we slide these into a debt management program, get those interest rates down, you get on that level monthly payment, leave your emergency fund intact and then let's really focus on getting those other two renters in there.

And as you have that increased income, then you can accelerate that payoff just as quickly as you want. Either approach would work. I think it's ultimately up to you.

What do you think? Um, I know that I have a balance of like 2,800, uh, that's due by August 10th. So I was thinking maybe cause I'm getting one tomorrow and I have some in savings to be able to, um, pay maybe just enough to get the zero interest and then carry the balance to the following month. And maybe by next month I'll have another renter.

Yeah. I don't have any problem with that. I mean, the good news is we're not talking about, you know, six months or a year.

I mean, this is a very short term issue. So your opportunity here is just to minimize the amount of money you're paying toward interest unnecessarily. It sounds like you've got multiple options. I love that you have the ability now to bring in some additional income. So I think either of these scenarios is fine.

I could get comfortable with any of it. Ultimately, just ask the Lord to give you some wisdom and I think either of these approaches will work out just fine. Thanks for calling Amelia. We appreciate you being on the program quickly to Cleveland, Edward, you'll be our final caller. I just have about a minute and a half.

Go ahead. Uh, yeah, I'm semi retired. I'm still working about 20 hours a week. I, um, I'm debt free except for a home equity loan. That's not a variable rate.

I have about 300,000 in my 401k and I was wondering if you think, because my payments have gone up since the past few months or so, if I should just take that 401k and pay off that home equity loan. Yeah. How much do you owe on it? About 18, 19,000. All right. And how much are you sending toward principal reduction every month beyond the interest?

Nothing. Okay. So right now you're just paying interest only? Correct.

All right. And do you have any surplus without coming out of the 300,000? I just, I'm working part time at my job about 20 hours a week. And is that just covering your bills without anything left over? Uh, no, I probably have, I probably have money left over every month. What do you think roughly? Uh, probably a thousand dollars every month. Okay.

Yeah. I mean, maybe you split the difference. Maybe you take half of it and knock down and then just take a thousand a month and really tighten your belt on your budget and try to come out of current cashflow. Let's try to limit the amount you're taking out every month, uh, just so you don't have the taxes on it and you can let that fully recover with the market. But I understand why you'd want to get it paid off. So maybe we cut it in half. Edward, thanks for calling today. Faith and finance live is a partnership between Moody radio and faith by they get a Lynn, Dan, Amy, and Jim. We'll see you tomorrow. Bye bye.