The Art of the Credit Card Deal

Today's version of MoneyWise Live is prerecorded so our phone lines are not open. A fast food chain once used the slogan, have it your way. Ever wonder why credit card companies don't use it?

Hi, I'm Rob West. If you glance over a few credit card agreements, you'll quickly see that issuers write them to pretty much have things their way, but not always. Some things are negotiable.

I'll fill you in today. Then we have some great calls lined up, but please don't call in today, because we're prerecorded. This is MoneyWise Live, biblical wisdom for your financial decisions. We've talked before about how Americans are a bit too complacent. We don't like to haggle over prices, which is a way of life in many countries around the world.

We might walk away if we don't like the price of something, but we usually don't think to ask for a better deal. Now, when it comes to credit cards, it would be a good idea to get over that reluctance. The Federal Reserve says that Americans owe nearly $1 trillion in credit card debt.

The average household balance is over $8,000. Obviously the best solution is to pay down credit card debt, but while you're doing that, you can do a few things to make it easier. And we're certainly not talking about negotiating to have your balance lowered. That's called a settlement, and while folks sometimes find themselves in a financial predicament where they have to negotiate a settlement, we always want to avoid that and pay our debts in full.

Proverbs 37 21 reads, The wicked borrows but does not pay back. So just what can you negotiate with credit card companies? And actually there's not really a lot of negotiating required.

For the most part, we're really talking about just asking for something and waiting for a yes or no, so it's a pretty simple process. So let's look at interest rates and fees. The plastic in your wallet is a great convenience at times, but it's not cheap, even if you pay your balance in full every month. The typical credit card may come with as many as four different fees, and the biggest money maker for the issuers is the late fee, which could run as high as $35 every time you're late making a payment.

The vast majority of people simply pay it, not realizing there may be a better way to handle it. And that would simply be making a phone call to ask your credit card issuer to waive the fee. The number is right on the back of the card, and we have some pretty good data on how effective this can be. Creditcards.com asked 1600 card holders about their experience when calling their issuer and simply asking for a better deal. They focused on three areas, reversing a late fee, waiving or reducing an annual fee, and a really important request, lowering the interest rate. The survey revealed something quite surprising. 85% of card holders who made at least one request got what they wanted. It was also surprising to learn that not a lot of people know this, because only three out of five card holders in the survey reported making such a request, the rest obviously not realizing how successful it can be. The survey broke down the success rates for each type of request, late fees, annual fees, and lower interest rates.

In each case, the results were largely positive. Those asking to have a late fee waived were successful about 85% of the time. More than half were able to get their interest rate lowered, again, by just asking. But maybe more surprising, almost three-fourths of those asking to have their annual fee waived were successful. It's true that only about 30% of credit cards have an annual fee, but for those that do, they're pretty high, averaging well over $100. But again, the survey showed that not many people are aware that a simple phone call might get their annual fee eliminated. Only 18% of those polled had ever asked for it. Even more disturbing, they were much more likely to ask for a credit limit increase.

Okay, the numbers clearly show that your chances of success are more than 50-50, sometimes a lot more. But why are credit card companies so willing to give in? Two words for you there, balance transfer. They know all too well that most of their card holders can simply take their business elsewhere by transferring their balance to another issuer's card. And they don't want to lose you, even if you pay off your balance every month, because they still make a lot of money in vendor fees when you use their card.

So they have a vested interest in keeping you happy. One final thought, in these days of inflation and rising interest rates, it may be more difficult to get a lower rate, but it's all the more important to try. We don't think there's a problem with using credit cards as long as you use them only for budgeted items and you pay it in full at the end of the month. The moment you can't do that, I'd cut them up and move toward cash.

They can be a real problem at that point. All right, we're going to pause for a break when we come back, much more on the program. So don't go anywhere. We'll be right back. Delighted to have you along with us today on MoneyWise Live. I'm Rob West, your host. This is where we apply God's truth to your financial decisions.

Here's what we recognize on this program. God owns it all, and money is a tool to accomplish God's purposes because you're a steward, and so am I. We're money managers for the King of Kings. Here's the other reality, is that money issues are heart issues. You know, my experience is that our financial journey is one of the key ways God shapes our spiritual journey. And really, money issues, the way we handle money, it's a training ground of the heart. It's one of the most tangible, visible expressions of what we value and where we've placed our trust. The question is, is there a misalignment between what's really important to us and what money says is important to us?

And if it is, perhaps we need to change the way we're allocating God's resources. Well, we can all get better at that, and so let's do that together. Our phone lines are not open at the moment because we're away from the studio, but we have some great questions that we lined up in advance. So we're going to go right back to the phones. We're going to begin today in Texas. Mary, you'll be our first caller.

Go right ahead. Thank you. My husband and I are both in our 70s. I'm still working. He's long retired, but he's recently had a stroke and it's left him bedridden and paralyzed on one side and unable to speak. So currently, he's in a long-term care facility, which of course we didn't plan for. And we're being faced with paying a huge amount each month for his care because we don't qualify for Medicaid since we have too many assets. And it looks as though as time goes by, once all our assets are depleted and we've lost basically everything we've saved our whole life for, then he could go on Medicaid and it would be covered.

His care would be covered. So I'm basically searching for advice. Yeah. My notes say here that you have a second home. Is that right? Actually, we have a home that's paid for and we have two rent houses. Okay. All right.

Yeah. So that's going to be a challenge in the sense that the Medicaid rules for second residences and rental properties are pretty clear. They're not exempt from the asset limits. There's some narrow exceptions to this, but you'd have to get with an estate attorney to explore that further. Likely what you'll find is the best way to handle this would be to liquidate those properties. You can still be eligible for Medicaid while owning your first home. And then if you sell the other properties, it would give you funds to pay for your husband's care, your own expenses. And then if need be, open the possibility of Medicaid stepping in at some point. Unfortunately, I know it's terribly expensive and I'm so sorry to hear about your husband's condition.

But I do think beyond that, in terms of some specific planning, an elder care attorney would be able to help you navigate all of this. But just at a high level, that's probably what you're looking at. Okay. All right. Well, I appreciate that very much. I've got a lot of things to decide, don't I?

Yes. And there is a path forward here. And certainly, I'm grateful to hear that you do have some assets that you can tap into to pay for his care.

And then obviously, you'll need to be thinking about a facility that would be Medicaid eligible if you need that to step in at some point once your assets are depleted. But let's just trust the Lord's provision here and certainly ask for him to bring healing to your husband's body. And if we can help along the way, don't hesitate to reach out. Mary, all the best to you. We appreciate your call very much.

Eight hundred five two five seven thousand is the number to call. You know, folks, as we recognize our role as stewards of God's resources, we want to be found faithful in managing those resources. The way we do that is we go to God's word. Did you realize there's twenty three hundred and fifty verses in the Bible on money and possessions?

That's right. You know, as we look at the Council of Scripture, Old Testament and New, there's some big themes that jump off the page. And that's what we like to explore here as we gather together. It's the heart of God related to generosity and this big idea that we're managers of God's resources and what does it look like to live with contentment and how do we manage our lifestyle? How do we enjoy what God has given us and yet find his heart for how we live simply and hold everything loosely?

Well, it's not formulas per se. It really, I think, begins on your knees asking the Lord what he would have us to do. And as we do that together in community, I think we can find God's best in each phase of life.

Back to the phones we go. Carol's in Arkansas. Carol, how can I help you?

OK, I'm 80 years old. My husband is 83. We have eight double E bonds that we bought in January of 93 that are going to mature in January. We're going to receive about between $12,000 and $13,000 interest on those bonds when they come due. Is there anything we can do to defer tax on that interest?

Unfortunately, no, Carol. I mean, that interest is going to be recognized. It is, of course, taxable.

So you would have to report that as it matures and as you redeem that, then the interest would be there and need to be paid. Do you all itemize your taxes or do you take the standard deduction? Do you know?

We take standard. OK, yeah. So unfortunately, even additional giving or other opportunities for deductions won't come into play there because you're taking the standard deduction. And so that wouldn't be helpful to you unless you had some sort of required minimum distribution from an IRA that you could use a charitable distribution for that or something that would push you up above that threshold. Really, that's just going to be taxes you will have to recognize. So I would just be planning for that as you redeem those bonds. Make sure that you have that amount set aside. And if you need some help with that, you could connect with a tax preparer or a CPA.

OK? Would you suggest cashing some of those out this year and then carrying over the rest next year? Yeah, that's always a good strategy. I think you could work with your CPA on that. The key would be just to look at whether, given the amount that you're going to be cashing out, any portion of that could be pushed up into a higher tax bracket.

The amount that you're talking about at twelve or thirteen thousand dollars, probably not likely, but it's possible. And so if you could do that over two tax years, that would be one way to alleviate that. But it may not be necessary, Carol.

And if it be more helpful to you to have it all this year and it doesn't affect you from a tax standpoint, then it's just a function of taking the interest, setting the appropriate amount aside to make sure you've got what you need to cover it. And then you're all set. All right. All right. Thank you so much. Enjoy your program. Thank you, Carol. We appreciate you calling today. God bless you.

A quick email before we head to our first break. This one comes from Jeff. He says, My question is about tithing. I am between churches. Should I tithe where I visit or should I send it to my old church?

And Jeff, I appreciate that question. I'm sure it comes from a desire just to be found faithful in honoring God with the tithe, certainly as we apply the principle of the tithe. And I love that as a starting point for our giving a systematic gift based on the increase as a tenth to the local church. I think that's a great way to begin your giving plan in terms of where I think clearly when you're planted in a local church, that's obviously the place to be. If you're between churches, one way to go.

And there's certainly not a hard and fast rule on this. I think the Lord will be honored at whatever you decide. But one way would be to take a weekly increase. So every week, whatever comes in, you actually give to the church you're visiting.

And I think that would be one way to approach it. Ron Blue actually has a really, I think, fun way of handling his tithe. He and Judy, his wife, they actually sit down every Sunday morning at breakfast. Ron brings a three by five card and on that card, he writes down all the income they received that week. Well, he's an author, so they'll get some royalty checks or they might get some other sort of income throughout the week.

Well, he just jots it all down, calculates 10%, puts it down on the table. They pray over that, celebrate God's provision for that week. And Judy writes the check and then they take it with them to church.

And they've just found that's a great way just to acknowledge God's provision and faithfulness in their lives. So perhaps try that, Jeff, and then take that check with you wherever you're visiting that week. Folks, we're going to pause, but we'll be back with MoneyWise Live just after this. Stick around. Delighted to have you with us today on MoneyWise Live. Hey, our team is away from the studio today. We're not here, so don't call in. But we lined up some great questions in advance.

There's a lot more to come on the broadcast today. You know, as we mind the scriptures here on MoneyWise Live, we pull the principles from God's word that help to inform how we should manage God's money as stewards, to be found faithful in handling his resources as we live well within our means and we avoid debt. We have some margin or liquidity in our financial lives. We set long term goals and we give generously.

And when we apply those, we put ourselves in a position to experience God's best. Hey, before we go back to the phones, I want to mention my good friend Ron Blue, who joined us on the program recently to talk about why Christians don't give more. He shared a powerful story about a client he had worked with back decades ago that wanted to give a million dollars. They were making $85,000 a year at a net worth of about $350,000. And their desire was to give a million dollars to the Lord's work. And Ron helped them come up with a plan to do just that.

And as you can imagine, they were so excited. But what are some of those things that get in the way of us being able to give more? Well, let me share a few of them. You know, as I think about it, there's probably five key areas that we need to be thinking about as we maximize our giving unto the Lord. The first is just the financial side. Have we put ourselves in a position financially to be able to respond to the leading of the Lord? Have we ordered our finances to live within our means so we can give first right off the top systematically as unto the Lord as a tithe? And then beyond that, do we have margin in our financial life? Are we living right to the edge paycheck to paycheck, which really just limits our ability to respond to the Holy Spirit's leading in additional sacrificial giving?

Or have we positioned ourselves with enough margin so that we have the ability to say, Yeah, I hear that need or I see that person on my path who's hurting and I want to respond so I can then step up and make that gift. Well, that's really the financial side. That means we've got to limit debt, we've got to live within our means and have plenty of margin. We've got to be on track with saving for our goals so that we can take and respond where the Lord leads.

So the financial piece is really the first piece. And then second, what about spiritual? You know, where are we at spiritually in our walk? Are we listening to the Lord?

Do we have a time where we can hear from the Lord in quiet meditation and study of the scriptures and allow the Holy Spirit to speak to our hearts when there's a need that we're to meet? And I think a lot of that comes down to where we're at spiritually, making sure we're ridding ourselves of pride and greed and really being open to being a conduit of God's provision to others in need. That really is ultimately a spiritual condition. And I think we need to be working on ourselves and I'm speaking to myself as well. We need to be working on ourselves in these areas. So financial and spiritual I think are two of the five.

What about the third? Well, I think the next is really relationships. You know, so often we don't surround ourselves with people that are going to challenge us and spur us on to even greater giving. What if you put yourself in a community where that's being talked about and folks are challenging and encouraging you and you to them to think about how you can do additional giving and really reinforcing that idea, telling stories and celebrating what God is doing through your generosity. Perhaps seek out relationships that are going to spur you on to even greater giving. I think that will be a key part of you being able to maximize your potential for giving.

What else? Well, I think then there's the plan and this is different than the financial. The financial is just how we order ourselves day to day in terms of our handling of God's money to put ourselves in a position to give.

But the planning that I'm talking about actually goes beyond that. It's not just cash giving. I think it's balance sheet giving is the real opportunity here.

Think about this. Ninety percent of our giving happens in the form of cash, liquid assets, and yet only ten percent of our wealth is held in the form of cash. That means our greatest opportunity for giving is actually out of our assets off of our balance sheet. Well, that takes a plan. If you're going to give a piece of a business or a piece of some real estate or some appreciated art or stocks, whatever that might be, your estate plan, a charitable gift annuity, you know, looking at these tools and looking for opportunities to give out of your net worth is really where you're going to have your greatest potential for giving.

Well, that's going to take a plan. And by the way, I think often that's going to evolve a plan that includes an advisor, a financial professional who can really help you think about the best way to position your giving as a part of your overall financial plan. And that's where, by the way, we recommend the Certified Kingdom Advisor designation. If you're looking for a professional who understands the heart of God and will really understand your desire to be generous and steward your assets and resources well, well, that's where somebody who's earned the Certified Kingdom Advisor designation could be a real help to you. You can find a CKA in your area on MoneyWise.org.

Just click the button that says find a CKA. All right. So that's the spiritual side, the financial side, the plan side, relationships. What's the fifth?

Well, I think the last one is vision. You are never going to out give your vision for your giving. That just simply means what are you trying to accomplish? How do you want to partner with God? What are your passions and your interests and your skill sets and how can all of that align with your generosity? As you think about and develop a vision for your giving and how you can be a part of where God is at work, that will allow you to lift your sights a bit and actually see the potential for your giving that perhaps you've missed to that point. And I think establishing your vision for giving takes some time to look inward and really to ask the question, God, what passions do I have that align with your heart that I see in scripture? Is it the ministry of God's word or the ministry of God's justice? Or maybe it's the ministry of God's provision to the needy and the poor? You know, whatever it is, whatever breaks your heart, when you align that with where God's heart is, I think you will develop a giving vision that will cause you to perhaps do more than you ever have before. And here's my experience.

When you begin to taste that, you will begin to reorder your finances in such a way that allows you to do even more because here's the reality. Giving is joyful. It's contagious. It's something we want to be a part of. We were hardwired to give because we were created in the image of the ultimate giver. So I like to say we're most like him when we're giving.

So when you be able to taste that and experience it, well, you're going to want more of that. I can promise you that. Folks, we're going to pause for a quick break. Again, we're not here today, so don't call in, but more questions just around the corner. This is MoneyWise Live, biblical wisdom for your financial decisions. I'm Rob West, and we'll be right back.

Don't go anywhere. God's Word is packed with life-changing wisdom about your finances, and MoneyWise is here to help you and millions of others learn to be wise stewards. As a nonprofit organization, we rely on help from MoneyWise patrons, supporters of this mission, to help us continue and expand our outreach. Has God provided financial answers for you through this ministry? If so, please consider becoming a monthly MoneyWise patron.

Visit MoneyWise.org and click Give on the homepage. If you have money in a retirement account or just a general investing account, you know the stock market can sometimes be like a rollercoaster. But it is possible to enjoy both profit and peace of mind in investing, no matter what's happening in the market. You can see a short video webinar on that topic at SoundMindInvesting.org. Since 1990, Sound Mind Investing has sought to offer financial wisdom for living well.

SoundMindInvesting.org. You watch as your youngest son drives away to college, his room once cluttered, now empty, eating dinner, just the two of you, for the first time in years. You feel a confusion of emotions, excitement, sadness, delight, grief. How are you going to get the most out of your empty nest and have a full life? Discover God's best for your next season. Jill Savage shares insights from personal experience in her book, Empty Nest, Full Life.

Get your copy at moodypublishers.com. We've all been there when God feels distant. It's confusing and discouraging. When we feel distant from God, we need voices of truth. The book Distant God by Chris Nye meets us in the middle of the struggle.

No trite answers here, but you will find biblical practical ideas for drawing near when God feels distant. Pick up a copy of Distant God online or at your favorite Christian retailer from Moody Publishers. How much do your kids or grandkids know about God's way of handling money? It's one of the most important things they can learn about in life, and there's a fun way to do it with the Secret Slide Money Club book series. In this three-book series, agents race to save their friend from the agents of albatross while learning to give, save, and live God's way. You can request your copy of this book series with your gift of $25 or more to Money Wise.

Just visit moneywise.org. I'm Miriam Neff. And I'm Valerie Neff-Hogan with Wise Women Managing Money. One lonely woman in a retirement center accepted calls from a man she did not know, had never met, but he was an interesting conversationalist. After building a phone friendship, he stated he had a medical problem. He could not afford treatment. He asked her to wire a large sum of money to an account he specified.

A hundred thousand dollars poorer, she never heard from him again, though he had promised to repay her money when he was healthy. Thankfully, most would not fall for this line. Beware the vulnerability of loneliness. We can't stress enough that you have those around you that you share transparency with what others are asking of you. Remember that God promises us wisdom. We all need loads of His wisdom. This feature and more at wise women managing money dot com.

This is Money Wise Live with Rob West. Hey, if you hear a phone number mentioned today, please ignore that number and don't call us, because today's broadcast is a reprise edition. But we think the upcoming information will help you and make you a wise steward of what God's given you.

So please stay tuned. You know, if you're looking for a place to connect with other believers, learn from each other and share knowledge of what you learned on your money journey, let me challenge you to participate in our online community forums. This digital gathering place is for people to ask questions, even share a tip or just connect with others. And believe me, we have some active, enthusiastic, wisdom filled members in there.

So why don't you jump in and try it for free by going to money wise.org. Just click on the community button on the homepage. You may even occasionally see me in there answering a question or two.

So I'd love for you to join me again. Money wise.org. Just click the community button. Once you create your free account, which will take you just a matter of seconds, you can jump in, read all the questions that are being posted, the answers coming from others in our community, as well as even some of our Money Wise coaches and me. So we'd love to have you check it out again, money wise.org. By the way, while you're there, be sure to check out all the great content that's there are featured articles, videos and podcasts, we aggregate the very best content and Christian finance at money wise.org to be an encouragement to you on your stewardship journey.

Let me take a moment and talk about an issue that I think so often creeps in. When we think about money, you know, a familiar verse in First Corinthians 13 reminds us, love is patient, love is kind, it does not envy, it does not boast, it is not proud. Well, this verse has clear financial implications because it warns about envy. You know, envy is that negative feeling of jealousy when someone has better things or even better opportunities than you.

It's closely related to greed. An envious person is unsatisfied with what they have, always wanting more. And you know, it leads to covetousness, a strong desire to possess what someone else has. The 10th commandment says, you shall not covet your neighbor's house, you shall not covet your neighbor's wife or his manservant or maidservant, his ox or donkey or anything else that belongs to your neighbor.

And here's the reality. Envy destroys relationships. An envious attitude is the opposite of love because it creates division based on how much someone has or doesn't have.

And an envious person lacks peace. Proverbs 14 30 speaks to this, a heart at peace gives life to the body, but envy rots the bones. You know, envy is a common human emotion, but it's destructive, as you can clearly see here.

So here's the question. How do we overcome our tendency to envy what others have? Well, God's word warns against envy and it provides the cure as well.

Listen to this. You know, envy is a sin and the first thing we need to do with sin is to repent. We can pray through Psalm 51, which begins, have mercy on me, O God, according to your unfailing love, according to your great compassion, blot out my transgressions. And then back to the verse in 1 Corinthians 13, love is patient, love is kind, it does not envy. Ask God to replace your feelings of envy with patience and kindness. Patience trusts that God will provide for you and his timing. Kindness cancels out envy because it puts the needs of others ahead of your own.

Here's another big one, though. Gratitude is an antidote for envy. When we focus on being grateful, there's just simply no room for envy.

There's no need to compare what we have with what someone else has. Hebrews 13, 15 says, through Jesus, therefore, let us continually offer to God a sacrifice of praise, the fruit of lips that confess his name. You know, as we allow gratitude to replace our envy, it just simply puts us in a posture of thankfulness, a thankful heart for what God has provided.

And it breaks this comparison trap, this cycle that I think today is more fueled than ever by social media, seeing the best version of somebody else's life and wanting that, even if it means we have to live outside of God's provision financially to accomplish it. Folks, God has given us so much. He made us. He loves us unconditionally. He provides everything that we need to thrive. It doesn't matter what someone else has. When we focus on the Lord filling our hearts and minds with truth from his word, well, there's just simply no room for envy at that point.

So here's the reality. I think as you all think about this and as we pray through it, and I'm looking at myself as well, let's focus on this today to see if we can push envy to the side, get out of the comparison trap and lean into all that God has for us because he's given us so much. We have an abundance even before the first dollar that he's entrusted to us. And may we remember that today? All right, let's head to the phones to Mississippi.

We go Glenn, you're next on the program. Go ahead, sir. Thank you for taking my call. I'm 60 years old. And I have a question.

You know, the previous woman, she called about her husband in a nursing home. And, you know, I hope I never get there. But if I put all my assets in a family trust, and me and my wife and I think about this for a long time, you know, because we don't really need them. I have a retirement income and I still work. But and I also want to control a little bit how my kids get access to my assets, which to them would be a pretty good party, I suppose. But if I put my stuff in a family trust, does that protect it from creditors? And what's the difference between revocable and irrevocable as to creditors like if I were or my wife was in a nursing home? And if it's in a family trust, that with all the children's names in there, how does that affect that? Do you know?

Yes. Well, the key is, as you said, whether it's a revocable or irrevocable trust, a revocable trust allows you to pass your assets to name beneficiaries helps you avoid the probate process gives you the flexibility to change the terms of the trust, as evidenced by the name revocable, which means you can change it. On the other hand, irrevocable family trust does not give you the flexibility to modify the terms of the trust.

However, when it comes to creditors, that's a good thing. When you move assets into an irrevocable trust, you lose control over the trust. That means the trust owns the assets. Once you place the assets into assets into an irrevocable family trust, creditors can no longer access the assets for liquidation to pay off a loved one's debts.

But it can be a complex process. So you'd certainly need to work with an estate planning attorney who has experience in setting this type of thing up. A Medicaid asset protection trust shields your assets from Medicaid as well as other types of creditors. But you have to put that in there at least five years before you start to receive any financial assistance.

Medicaid, of course, pays for certain nursing home costs. But you've got to meet a certain threshold and each state establishes a limit there. And if you earn more money or own more assets than the maximum limit, then that's where that type of trust can come in. So I think depending on what you're trying to accomplish, it is going to come down to what type of trust you have, when it's set up, and as to whether it's going to accomplish the purposes for which you created it.

So I think your next step, Glenn, is really to visit with an estate attorney just to talk through these things. Okay? Yes, sir. All right. Well, thank you.

All right. We appreciate your call today very much. God bless you, sir. Hey, folks, let me remind you before we take our break that the MoneyWise app is available in your app store. Just search for MoneyWise Biblical Finance.

You'll find broadcast archives. You'll find our Learn tab with the best content in biblical finance all in one place, podcasts, articles, and videos. You'll also find our money management system where you can use our digital envelope system or just our tracking system. Whatever you want to do, it's right there for the taking.

MoneyWise app, search for MoneyWise Biblical Finance. We're going to pause. MoneyWise Live will return right after this. Stay with us. This is our final segment of a broadcast we previously recorded. Thanks so much for being with us today, and we hope you'll stick around and enjoy the rest of today's program. Before we head back to the phones, let me remind you MoneyWise Media is listener-supported. We're a not-for-profit ministry that relies on your gifts to do the ministry we're called to each day with this radio broadcast, our work in the MoneyWise app at MoneyWise.org or MoneyWise Coaches.

All of the resources that we're providing to God's people are a direct result of listener support. And so if you consider you're part of the MoneyWise community and you benefit from this program and you'd like to give a gift to MoneyWise Media, we'd certainly appreciate that. You can head to our website MoneyWise.org. Just click the Give button, and you'll be able to give one time over the phone. You can set up a monthly gift. We'll even give you the mailing address there if you'd rather send a gift through the mail. But thanks in advance, especially here as we try to stay on budget. So yes, we operate from a budget as well. That would be great to have your support.

Again, MoneyWise.org, just click Give. All right, back to the phones we go in our final moments of the broadcast today. To Alabama we go. Tom, you're next on the program. Go ahead, sir. Yes, sir.

Thanks for taking my call. I'm 60 years old. I have two different life insurance policies in place. $100,000 on each one. One is term, which is about $48 a month for me at this point, and the other is a whole life policy.

It's costing me $233 a month. And my question is, is it really practical to stay in the whole life at this point? I owe $56,000 to the whole life in order to get the cash value when it becomes mature, which would be $41,000. So basically, I know I'm going to lose $15,000 to keep that whole life policy in place. And I'm explaining to my wife, it's like, yes, but if I pass in the next 15 years before I pay off this whole life policy, you'll get $100,000.

And she's like scratching her head going, is it really worth it? Yeah, that's my question to you. Yeah. What kind of death benefit do you have? You have $100,000 on the whole life and how much on the term?

$100,000 as well. Okay. And you said your age was 60? Correct.

All right. And what is your plan, Tom, vis-a-vis retirement? Do you plan just to continue to work indefinitely?

Do you have kind of a retirement date targeted? We have a business that will be worth probably $400,000 to $500,000. We have an inheritance home that will bring another quarter of a million when it's dispersed between relatives and myself. So yeah, we've got some assets coming when we decide to sell the business, which is providing our income at this point. But yeah, the question is this life insurance and if it's really practical.

Well, and it really comes down to- Maybe educate your audiences to the difference between whole and term because a lot of people don't even know. No, sure. And I'd be happy to weigh in on that. I think the key for you is whether this death benefit is necessary for your wife. So let's say something were to happen to you tomorrow. What is the plan to continue to operate the business and then get it valued and get it sold?

Is that a reasonable plan? And would there be a period of time until that takes place where she would need some working capital and really needs the death benefit to maintain your lifestyle? Because obviously, we want life insurance as long as we can or as long as we need it to fill a need that exists for a dependent, whether that's a spouse or a loved one down the road. Obviously, the difference between whole life and term is that term is pure insurance for a stated period of time. You're simply paying the mortality cost for the death benefit that's a function of your age and at the time of your application, your health status. But at the end of the term, it lapses. It gets way too expensive.

Nobody would ever plan to keep it beyond that term. But the idea is that while we're buying the pure insurance, which is the least expensive way to have that death benefit to offset that risk of somebody that you're depending on for income, in most cases, going home with the Lord, the cheapest way to do that is through term insurance. But we're saving separate from that in company sponsored retirement plans or building a business that can be sold through a liquidity event to convert that asset to something that can be generated in a passive income stream. And we're doing that in a way that doesn't involve an insurance product, whereas a whole life policy is a combination of the two. It's the death benefit plus the savings, but you're relying on the insurance company to provide the accumulation. And in my view, it's just not the best way to go. So I think for you, Tom, here, the question is, what is the amount of life insurance your wife needs, if any, today?

And for what period of time? And perhaps that $100,000 on the term policy is enough to get you all to the place where you have that liquidity event and then the assets are available to cover her life. If not, perhaps you drop the whole life insurance, take whatever cash value has accumulated at this point and get a second term policy or replace that one with one that's $200,000 or $250,000, but you're not spending the $233 a month, you're spending another $50 perhaps or $60. So that's at least the less expensive way to go just to offset that risk.

What are your thoughts? Well, yeah, what you said makes a lot of sense having assets in addition to offset a mortgage of $200,000 that we've got at a really low interest, 2.85. We just met with a financial manager a few weeks ago at our bank and he's like, yeah, that's your debt, but it's called good debt because it's such a low interest. Like, why would you try to pay it down? Because I've talked about that too, paying down the mortgage quicker because it's a 30-year term. We still owe 28 years and it's like, well, but that's good debt. You can take that money instead of pouring it into your mortgage. You make more by just investing that additional principal amount you might pay into it. That's another question. It's like, well, where do we put that if we're not going to pay down the principal?

So, well, that's right. And you know, I think there's a non-financial side to that equation as well, though, that you have to consider, Tom. Yes, there's the straight financial implications of I've got a low interest rate.

I may or may not be able to deduct that because I'm, you know, 80% of people take the standard deduction, but it's at a low interest rate so I could take that money and keep that invested. And while that's true, what that's discounting is the non-financial side of owning your home and being free and clear and your wife having the security of knowing that we're unencumbered and the flexibility that comes with that. Not to mention if we can sync up the payoff to that mortgage with your retirement date, maybe look at what it would take, run that amortization schedule to say, well, if we're going to retire in the next eight years, what would it look like for us to take that, you know, 23 or 25 year mortgage term and cut it down to eight years? How much extra would we need to send every year so that as we're entering retirement, our expenses are as low as possible because that single largest expense that we have is now coming off the table. So I think that would be another way to look at it as you think about, you know, by the way, I've never had somebody in all the years I've been doing this pay off their house and call me back and say, man, Rob, I just wish we didn't pay off the house.

I've never gotten that call, Tom. There's just something about it, despite what a financial advisor might tell you, that gives you a whole lot of peace of mind that I don't think we need to discount. So I think as you answer that insurance question, it really comes down to what's the period of time you need this death benefit to be able to provide for your wife and her for you. If you're relying on anything from her, probably not in this situation, but mainly so that she has the assets she needs to maintain her lifestyle. And typically we'd look at what's called the dime method, DIME, making sure you could pay off all your debt, making sure you've got enough to provide the income that's necessary to get you to where your retirement assets and the business are enough to sustain her. The mortgage, paying off the mortgage, that's the M. And then E is education if you still have any kids at home that need college.

And those would be kind of the big four that we'd want to solve for. But I like doing that through term insurance with only the amount of term we need to get us to the place where we're now relying on our own assets and not the insurance company. And by the way, then we can drop that expense that's unnecessary and continues to climb as we age. Does that make sense? Yeah, it makes perfect sense. And yeah, I've done the amortization.

Yeah. If I pay another 500 towards the principal, I can have the mortgage paid off in like 12 years, which is, you know, then I'm 72 and that's, you know, that's a pretty good target. I think that's kind of a nice compromise between, you know, do we try to pay it all off in one year or two years, or do we just ride this thing out for the next 25 years? I like the fact that we'd have a strategy that says we want to get out of debt once and for all, in a reasonable time period. And, you know, in the early years of our retirement, we'd like to have that thing gone.

So let's prioritize that now out of extra cash flow so that we can get there much sooner. Well, bless you, sir. I appreciate your wisdom and everything you're doing for others.

And I know God is using you. So well, thank you, Tom. Keep up your great work. I appreciate it, my friend. Thanks for your encouragement and delighted to hear from you. Sounds like this is all really well thought through. And at the end of the day, you're trying to be found faithful as a steward of God's resources, as we all are. And it sounds like you're doing a great job.

So God bless you, my friend. Call us back anytime. Well, folks, that's going to do it for us today. We've covered a lot of ground. We've talked trusts and we've talked giving and we've talked insurance. And, you know, as we think about all of these issues that we deal with every day, they really fit into four big buckets. There's our lifestyle, that which we live on, that which we give, that which we owe and that which we grow, the save for the future.

And here's the cool part. God's word speaks to all of it. Every bit of it. We can look to his word to get the counsel that tells us the timeless wisdom we can apply to these decisions that we're facing today. It's all there in God's word. So renew your mind.

Be in there often meditating on those scriptures. Well, folks, that's going to do it for us today. So thankful that you stopped by as we together in community try to find God's heart for managing his money. You know, when we think about our role as steward, it's a high calling. We're money managers for the King of Kings.

Well, it doesn't get any bigger than that. So we want to be found faithful and we want to go back to his word so we understand how to go about that. Well, our team is essential to what we do here every day. So let me give them some thanks. Want to say thank you to Amy and to Courtney and to Melody and to Jim, the team serving us today, doing an amazing job, pushing buttons and doing all the things that makes this show possible.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. That's going to do it for us, but I hope you'll come back and join us next time. We'll do it all over again. In the meantime, may God bless you. Bye bye.