Record Credit Card Debt

Americans have set a new record, but there won't be any trophies handed out. We now have the highest credit card debt in history. Hi, I'm Rob West.

Yes, it's sad but true. The Federal Reserve Bank of New York made the announcement earlier this month. That's 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Well, we're always glad when Neely Simon can join us, even though too often it's when there's a potential crisis brewing, as is the case now with credit card debt. Neely is a certified credit counselor with Christian credit counselors and underwriter of this program. And Neely, it's great to have you back with us. Thanks for having me on the show, Rob.

All right, Neely, let's dive in. What are the numbers? What did the New York Fed reveal about what Americans owe on their plastic? So for the first time, credit card debt has surpassed $1 trillion and is now at $1.03 trillion.

In Q2 alone, it shot up $45 billion or 4.6%. Now compare these numbers to the overall household debt, which spiked by $2.9 trillion since the end of 2019 before the pandemic. The interesting observation here is that household debt, which includes credit card debt, mortgages, student loans and car notes, the fact that the credit card debt is almost one third of the household debt is very concerning. When you think about how expensive a car or a home is, people are really drowning in debt because of these higher interest rates and increased cost of living. At Christian credit counselors, we are seeing people struggling with credit card debt now more than ever.

I can imagine. And those are big numbers. Neely, what does that mean to the average household with credit card debt? So in a recent study, 35% of Americans said they were carrying their highest level of debt ever or coming close to it. Lending Tree statistics revealed that in the second quarter of 2023, the average APR on new credit card offers is about 24.24%. The average for all current credit card accounts is 20.68%. And the average for all accounts that accrue interest is 22.16%.

Wow. Well, with the Fed raising interest rates almost a dozen times in the past year, that hasn't helped, has it? No, it hasn't. And that's because in the last year, interest rates have gone up four and a half to five and a quarter points and continue to grow. The average credit card interest rates are now over 20%. So to put that in perspective, if you're making just minimum payments on an account that has a $6,000 balance, it would take you 17 years to pay off that debt. Credit card companies are actually now required to state on the first page of their monthly statements, a minimum payment warning that shows you how long it will take to pay off your debt with no new charges and only making minimum payments. So my advice to your listeners is view your monthly statements. They show a lot of important information that can be eye-opening and really make you think differently about just making the minimum payments or even using the credit cards at all. Well, Nealy, of course, folks who are just making minimum payments need to follow the advice we give on this program, stop using those cards, get on a budget, live on less than they earn and use the snowball method. But often that's not enough or maybe they have more than roughly $4,000 in credit card debt and they really need further help. That's, of course, where Christian Credit Counselors comes in. So tell us about CCC. Sure. So Christian Credit Counselors, we offer a free consultation that consists of a comparison estimate where we're going to outline all the benefits and the fees of the program.

There's no commitment. And our goal is really to educate people on how we can help and provide them the information so that they can make a wise decision for themselves. We then help that person with their budget by either making suggestions or if they've never set up a budget, we're happy to walk them through it together over the phone. The program that we offer is called a debt management program, and it benefits people through our pre-negotiated interests, terms and conditions with the credit card companies. We lower your payments and the new interest rates will range between 1 and 12 percent APR and will vary per creditor. That's really helpful, Nealy. Well, this is my preferred way for you to get out of credit card debt once and for all.

And with Christian Credit Counselors, you can do it 80 percent faster. Nealy, so glad to have you with us. Thanks for stopping by.

Thank you so much. Learn more at christiancreditcounselors.org. That's christiancreditcounselors.org. All right, your calls are next. 800-525-7000. 800-525-7000. We'll be right back. Well, it's great to have you with us today on Faith and Finance Live here on Moody Radio.

I'm Rob West. It's time to take your calls and questions today on anything financial. The number to call 800-525-7000. We've got lines open and we'd love to hear from you again at 800-525-7000.

You know, we started today by talking with Nealy Simon. Again, that record level of credit card debt now surpassing one trillion with a T. You know, a lot of that is as a result of, of course, high inflation, which put the squeeze on many Americans living paycheck to paycheck. You put on top of that now the fact that their student loans are going to have to be resumed.

That's going to make things even more challenging. Obviously, these debt levels are just an indication of how tight families were living because now part of their living expenses are spilling over onto their credit cards. Well, that is not the way to proceed. And I realize it's easier said than done, but living within your means is really the beginning point. And coming up today, I'll weigh in on if you don't use debt management, which I recommend for those folks with 4,000 or more in credit card debt.

How do you approach it if you've got less than 4,000 in debt? Well, there's two approaches. One is called the snowball method. The other is called the avalanche method.

And yes, those are technical terms. I'll describe both and which ones, which one at least the studies say you're most likely to actually pay off all your debt. I'll share that in just a moment, but let's take some phone calls. 800-525-7000 is the number to call. We'd love to hear from you. Let's begin today in Chicago. Maria, you'll be our first caller. Go ahead.

Hi. So I'm calling because I'm curious, what should I do? I'm the kind of person that when I use my credit card, I paid my bill all at the end of the month. And I'm curious, should I continue to do that or should I leave an amount in my statement so I can bring my credit score higher?

Yeah, I can appreciate where you're going. Your goal is to keep your credit card paid in full. You don't want to pay any interest, and that's the primary consideration. And then secondly, you're trying to ensure that you have a good credit score.

Here's the reality. Just the fact that you have those recurring transactions going on on your credit card every month. So the idea behind credit cards is that we should use them only for budgeted items, so planned expenses, and therefore we only put things on the credit card that we can pay off in full at the end of the month. And that's going to ensure that you never pay any interest or late fees or over limit fees, but most notably any interest. Now, how does that benefit your credit score? Because to your point, you're paying it off at the end of every month. Well, what's happening is that the statement balance that you have at the end of every month is being reported to the credit bureau. So actually, if you pay it off after the period closes and you pull your credit report, even though you're paying it down to zero, it's not going to show a zero balance. It's going to show your balance as of the end of the statement period because that's what's reported to the credit bureau. But what's most important is that you have an active account and you're paying it on time. And as long as you're an on-time payer and as long as your balance isn't above 30% of the limit, then you're getting all the positive credit history you could want. So I definitely wouldn't leave an unpaid balance at the end of the month because now you're paying interest. The question is just, is that balance that's reported, the statement balance that's reported before you pay it off, is that higher than 30% of the limit? If it is, you may want to consider paying it before the end of the statement cycle because then you're going to have a zero balance reported.

But again, it's going to show that you're an on-time payer and that's really the key as far as the positive credit history. I realize this can get a little confusing, Maria. Does that all make sense?

Yeah. So pay it if you have 30% less, then pay it before the end of the cycle. Do you know what your limit is, for instance, on that credit card? It's like $3,000, $4,000. Well, that's how much you're charging or that's the limit? No, that's the limit. I only use about $1,000 a month or less. Yeah, that's great. I would be surprised if your credit limit was only $3,000 or $4,000.

Usually it's $5,000, $10,000, even $20,000. But that's the key. If you're going above 30% on your monthly charges before you pay it off, then you may want to back it up. You could call them and say, when's the end of my cycle or my billing statement period? And they'll say, well, it closes on the 26th of the month. Well, if you go online on the 24th or 25th and you pay it off, then actually it's going to be reported to the credit bureau that, first of all, you're an on-time payer and that's the key. And second of all, that you have a zero balance. And that's great. That could actually boost your credit score.

But I definitely wouldn't leave a balance. That's not going to help you and it's going to cost you some money in interest. Okay? Okay, great.

Awesome. Thank you very much. You're welcome, Maria. Thanks for your call today. God bless you. 800-525-7000 is the number to call. Let's head to Ohio.

Ronaldo, thank you for calling. Go right ahead. Yeah, how are you doing? Yeah, so I have a daughter. She's 19 years old, second year in college. She doesn't have any credit and I've heard that if I just add her to one of my credit cards or something as an authorized user, that that would help begin establishing her credit. But I've also heard that if I myself have any negative items or things like that, that that could also hurt her.

I don't know. That's exactly right. Yeah, so all of the information will pass to her credit report. So a lot of folks will use this to build credit for those that don't have credit and that would certainly apply to college students. And so what they do is they add them in as an authorized user. They don't give them the card or any charging privileges. But then all that credit history starts flowing through to their credit report.

But you're exactly right. The good credit history will. So if you're an on-time payer keeping a low balance, that's going to give her some really positive credit. If you had a late payment, that late payment will show up on her credit report, too.

And guess what? You might have a lot of history and a lot of other accounts to kind of offset that. She will have very little credit in that late payment that passes through to her credit file will be significant negatively for her because she has such little credit that one black mark is going to really be compounded at that point. So you have to be very careful if you're going to add her as an authorized user to make sure that you're keeping your balances low below 30 percent, that you're always an on-time payer.

Otherwise, that could backfire. The other approach is you could get her. First of all, she's probably already getting credit card solicitations as a student. I know my son just went off to college a couple of weeks ago as a as a rising freshman and he's already getting solicitations.

We're not going to get them. We've been establishing credit other ways, but you could get a credit card in her name just as long as she understands how to use it. Again, maybe she maybe just wants to put a recurring charge for five or ten dollars, a budgeted expense she was already planning for. And then she pays it off.

And now she's starting to establish herself some some credit history. Another way to do it, which is a little safer, is what's called a secured credit card. That's where you put or she puts a three or five hundred dollars on deposit. They issue a credit card against it with a limit of what the amount is on deposit. So they're not taking any risk. Anything she charges, if she doesn't pay it back, they can take the money from the account. So that means they don't have to worry about whether or not she has any credit history, but it will be reported to the bureau and that's going to allow her to start to build some credit.

So either of those strategies can work. Just make sure you understand what you're getting yourself into. If you want to find a secure credit card, go to Nerd Wallet. That'd be a great place to look for the best one today. Thanks for your call, Ronaldo. We'll be right back on Faith and Finance Live. Delighted you're joining us today on Faith and Finance Live.

I'm Rob West. We'd be delighted to have you a part of the program today. If you have a financial question, we've got a few lines open.

Eight hundred five two five seven thousand is the number to call. Hey, before we head to Bentonville, Arkansas, let me remind you, Faith and Finance Live is listener supported, which means we rely on your generous support to bring you this broadcast every day, along with our app and our coaches. All the content you'll find at FaithFi.com. And here at the end of the month, it's always a great time for us just to look at where our giving is and see if it lines up with our plan.

And we're just slightly behind for the month of August. And so if you find yourself benefiting from this program, you consider yourself a part of the Faith and Finance Live community. You'd like to support our work. We'd certainly be grateful for your tax deductible gift of any amount. Just head to FaithFi.com and click Give. That's Faith F I dot com and just click the Give button.

Thanks in advance. All right. Let's head to Arkansas. James, you're next on the program, sir. Go ahead. Yeah. Good afternoon, Rob. Thanks for taking my call.

Appreciate your show. When talking about what what you can put in your 401k annually, I assume that that's like my company contributes of five or six percent on top of what I do. So the total amount for the year is both yours and your company's contribution, right? Yeah. You're talking about the recommended 10 to 15 percent contribution? Right. Yeah.

Yeah. So that's just a rule of thumb. And yes, I would agree with you when we're calculating how to you know how much you're putting aside. I would include both of those together because, you know, if you were to follow that and you were to get 10 to 15 percent of your pay, whether a portion that's coming from you and a portion from your employer and you were to do that over 30 or 40 years or even 20 years, you know, you're going to have quite a nest egg there. Now, all that is is a rule of thumb.

So we just have to recognize that and take that with a grain of salt. That doesn't replace got a real meaningful retirement planning where you'd actually sit with a professional. You'd look at, OK, what is my lifestyle now? What do I expect it to be in retirement? How much do I need to be putting away? You know, how much have I already saved? What might we expect that to grow to between now and retirement at a reasonable rate? And will that number actually, you know, alongside Social Security be enough to cover my lifestyle? And they could tell you whether you're on track ahead or behind.

So I always love that because it's a bit of a deeper dive. But, yeah, that 10 to 15 percent rule of thumb is a good one. And in calculating it, I would certainly look at both yours and the employer's contributions. You know, so kind of along that line, I'm 58 looking at retiring the next five years. I've got a government pension. So that kind of changes my Social Security a little bit. But I always hear people say you've got to have X amount of money in your in your retirement fund before you retire. Yeah. When you have a when you have a pension, how does that come into play with X?

I've been running my calculating my numbers for what I'm going to need just to sustain. Yeah. And the pension plus my Social Security when I decided to draw it look like it'd be more than enough. But I don't have, you know, the two or three million dollars in the bank. Yeah.

Yeah. Well, but keep in mind, you know, the idea behind the 10 or 12 times your income in the bank and in a 401K or 401K plus a Roth IRA is so you can convert that to an income stream. But you've already got a guaranteed income stream in the form of your government pension. And as long as if you're married, that's going to cover your life plus your wife's. If you predecease her, then you I mean, that's as good as, you know, 10 or 12 times that in the bank because, you know, all we're looking for is an income stream.

So if you're telling me that your government pension plus Social Security is more than enough than really anything you're saving in a 401K is just gravy at this point because you've already shored up your income needs. Okay, that's what I thought, but I keep hearing all these people talking scares me. Appreciate your time. Well, you're very welcome, James. We appreciate you listening and being on the program today.

May the Lord bless you. Let's see. We've got two lines open.

800-525-7000 is the number to call. Let's head to Cleveland. Hi, Tom. How can I help you? How you doing, Rob? I've got a question for you today.

It's up. I've got a $70,000 inheritance that I received. It's an online bank Ally. I got a $20,000 CD that I put in for 18 months at five and a quarter percent. And I got a prop portfolio with about 50,000 in a traditional IRA. I've got a mortgage with I owe about a hundred thousand on it. It's a VA loan at two and a quarter. It's a low loan. I refinance. I don't know if I should put this money towards the house or a meeting with a financial advisor later this week to go in stocks and bonds. But I kind of paranoid over it because we've lost so much money the last year, you know, in the 50,000 that I already have in a portfolio. I don't have any debt really pay my credit cards off.

Got an emergency fund of about three to six months or, you know, I could make it higher now. Yeah, yeah, very good. No, I appreciate that background.

It's really helpful, Tom. What is your age? 61. I'm working. I have a good job. I got about 2,000 surplus a month that I could invest, you know, tithe and whatever with it. Great.

All right. So you've got a couple of thousand a month surplus. Just based on what you're thinking and praying about today, how long do you think you're planning to continue to work? Lord willing, about till I'm 70. I work in the oil field.

It's a pretty good job. Okay. Yeah, probably about another nine, eight, nine years. Yeah.

Yeah. So I think the key is, you know, I'd love for you to have that mortgage paid off by the time you retire. And so let's say another decade, you know, one approach would be to say, okay, I'm not going to pay this off right now because I want my investments to continue to grow. I know they've gotten beaten up, but I think you continuing to fund long-term tax-deferred retirement savings is going to be key.

Letting that grow over the next decade. I would even try to look at maybe even putting some of the CD money in if you have the option to do so. Let's say through a 401K and maybe run an amortization schedule to say, okay, what would it look like to make sure that that mortgage is paid off by the time I retire in the next nine years?

And how much extra would I have to send every month? I wouldn't be in a rush unless you just had a conviction from the lawyer to be debt-free because your interest rate is so low. And then I would really focus on these next nine years, putting as much as you can away toward long-term retirement savings.

And with that advisor, do some planning so you know what your goal is, so you've got enough to cover your expenses and your lifestyle when you get to retirement. Hope that helps, Tom. Thanks for your call today. We'll be right back. We're so glad to have you with us today on Faith and Finance Live.

I'm Rob West. We've got a few lines open today for your calls and questions. 800-525-7000. You can call right now.

800-525-7000. We'd love to chat with you. Let's head back to the phones to Youngstown, Ohio. Lynn, you'll be our next caller. Go right ahead. Hi.

Thanks. My question was kind of with charity to some degree, does that start at home with your family first? Should I consider getting a condo for my brother? He's like 64. He wasn't very good with money, but he hasn't asked for money for a long time now, so I think he's better. He lives across the state line, though, too, so he's renting, so would that be something for me to ever consider? Yeah, and so let me just make sure I understand. So you're considering making a gift to him to be able to buy a condo, or you would actually buy it and get a mortgage and just pay the mortgage to help him out?

What is it you're considering? Well, I would probably just buy it straight out, you know, for him. Right. And then, but I don't know how, you know, what kind of liability, you know, what could come back on me?

Yeah. So essentially, what you could do is, I mean, if you wanted to invest in a condo, and let's say you buy a condo that you feel like is a pretty good investment, it doesn't hinder you financially, you want to do it to bless your brother, then as long as you retain the ownership of that, you're on the deed. And then essentially, you're allowing him to live in it. And you know, you could buy, you could get a renter's insurance policy, or an insurance policy to cover, you know, any kind of major problems. But essentially, you'd be renting it, if you will, to your brother, or in this case, you'd be gifting it to him, because you wouldn't be asking him to pay you for it. And then if at some point he decided to move out, well, then you could sell it and you'd be able to take the appreciation for this property over time. And if you buy it right, you know, you would expect that it would get a modest amount of appreciation. So, you know, I'd probably add in addition to, you know, homeowners policy on it, I'd probably get a liability policy at what's called an umbrella policy. You know, they're pretty cheap.

You could get one for a couple of million dollars. And this would just basically cover you if there's anything that happens anywhere, whether you're driving a car and you're in a really bad accident, somebody's injured or somebody slips and falls in, you know, your condo that your brother's living in. This would step in beyond the coverage limits of let's say your auto, property and casualty policy or your homeowners policy. So it's just a good thing to have just to protect you against any liability that you might have in any area of your life.

So, you know, I think there's not really any issue there with regard to liability. I think the question is just, is this something the Lord's leading you to do just as a blessing to your brother? You know, the only thing I might consider is, you know, is there some sort of, you know, lifestyle or poor decision making on his part that this could actually accelerate? Just because he's not having to kind of grow up and manage his finance as well. And, you know, the extent to which you keep stepping in and quote unquote, helping him.

And I appreciate what you're doing and your desire to be of help. Just make sure that that's not, you know, getting in the way of him really taking some responsibility for himself. Now, obviously, I know nothing about the situation, and that may not be a factor at all. But I would just prayerfully consider that before you made this decision, because the last thing you'd want to do is get in the way of either him learning to be financially mature and responsible on his own as a steward, or more importantly, what God's doing in his life spiritually. But if you don't think either of those are a factor, then this could be a great blessing to him.

And as long as you have the proper insurance coverages in this property remains in your name as an asset of yours, then I don't see any problem with it. Is that helpful? Okay. It is.

It is. Yeah. Yeah. Wonderful.

Yeah. I don't want him to give it to one of his kids. Well, see, you don't you can retain the ownership of it. And essentially, you're allowing him to live in your property. Now, if you were to gift it to him, then you'd have to fill out a gift tax form, you'd be making a gift and then his name's on the deed. And then absolutely, it's his to do what he wants with. He could, in fact, leave it to his kids and as well, or if he doesn't have a will, it would just naturally pass to them. So that's why I think in this case, you'd want to retain ownership.

If your intent is not to give him the asset, but just create a place for him to live, then I would keep your name on the deed, make it very clear to him that I'm buying this condo, I'm going to allow you to live in my condo, and I'm not going to charge you any rent. But I would put all of that in writing because the other thing you want to make sure of, especially with family members and money, is that there's not unmet expectations because of a lack of clarity. So whatever the plan is, I'd put it in writing, Lynn.

So maybe you'd put it in writing that, you know, I'm buying this condo, this is going to stay in my name, you're allowed to live here X number of years, I'm going to charge you $0 rent for this period of time, and everybody signs off on it. And then there's no confusion there for his kids, for you, for your brother. You know, everybody's clear on what you're doing here.

And that's just going to avoid unmet expectations and potentially a damaged relationship. Okay? Yeah, wonderful. Thank you very much. All right, Lynn. God bless you. We appreciate your call today. Thanks for being on the show. Let's see.

Kokomo, Indiana is where Sean's located. Go ahead. Well, hi, Rob, thank you for taking my call. I have a quick question.

This may be a simple question. All my vehicles are paid off. But they are very unique in the fact that they are older vehicles, like I've got a 2002 Buick Park Avenue, only 80,000 miles. And on all my vehicles, I'm very particular about them, take very good care of them. But I have full coverage on all my vehicles. And I was wondering, I want to get your opinion as to whether or not I should just get PLPD and not full coverage.

I wanted to get your thoughts on that, Rob. Yeah, so I'll give you the rule of thumb. And then at the end of the day, you just got to decide, you know, how much protection you want. The standard rule of thumb used to be that car owners should drop collision and comprehensive when the car was five or six years old, or when it reached 100,000 miles. Now, these days, cars are so expensive, and replacement parts are so expensive, I would probably go a few years beyond that. You know, because cars, if you take care of them can run 200,000 miles plus, you know, and they can be very expensive to maintain, of course. You know, the formula would be you'd take the car's value, you'd subtract the deductible, and then you'd take away the cost of the six month policy. And then if you get a negative amount, chances are it's not worth, you know, paying for a comprehensive policy. And so you could contact your insurance company to cancel your payments. But I think at the end of the day, you need to be comfortable with that just kind of given how expensive cars and car repairs are. Does that make sense?

That certainly does. And Rob, I certainly appreciate it. All right, absolutely, sir. We appreciate you calling today. Thanks for being on the program.

Well, folks, we're going to take a quick break here in just a moment. And then when we come back, Angela, and Dan and Charles will come your way and see if we can help you with your financial questions. In the meantime, let me mention that if you haven't downloaded the FaithFi app, we would love for you to check it out. You'll learn more in your app store.

Wherever you download apps, just search for FaithFi. Here's what it's going to do, especially now when folks are really struggling to stay on budget. Our digital envelope system could be really helpful to you as you create a plan, fund your envelopes automatically every month by connecting securely to all of your financial accounts. And then at any point during the month, you can say, how am I doing in the eating out envelope? Or what about that clothing envelope?

That's going to allow you to curb your spending when that envelope is emptied out. It's all in the FaithFi app. If you want to check it out, you can also head to our website, faithfi.com.

Just click the app tab. We're going to be back with much more just around the corner. Stay with us. Well, it's great to have you with us today on Faith and Finance Live. If you're looking for a certified kingdom advisor, there's 1400 of them across the country that have met high standards and character and competence, signed a statement of faith, signed off on a code of ethics, pastor and client references, and they've been trained to bring a biblical perspective of professional financial decisions.

You can search at our website, just head to faithfi.com and you can click Find a CKA at the top of the page. All right, we're going to round out the broadcast here with your phone calls today. We've got some folks waiting. Let's go to Tennessee. Hi, Patty, go right ahead.

Hey, Ron, thank you for taking my call. I am recently divorced of 44 years and I have no debt. I have $200,000 in an IRA and a divorce settlement. I have a $500,000 with another maybe $500,000 coming after we sell the house. I'm wondering when I get my money now, should I buy a home? Should I pay rent?

What should I do? Well, let me ask you a couple of questions. I appreciate that background. So you're going to have about 1.2 million in assets between the IRA, the half million, and then the additional half million that's coming. What income sources will you have at that point? The only thing I have is my Social Security in that $1,200 a month.

I was thinking about starting to work part-time though. Okay. Well, before we factor that in, what are your expenses currently and where are you living? Living with friends and family.

Okay. And where would you like to live? For instance, if you didn't buy something, what would you do? I've looked into apartments and paying rental because I know if I buy a house, there's always something that's going to come up with a house. But then rent is so expensive right now. When you start adding up rent, you're spending so much and I'm thinking, okay, should I spend $200,000 on a house or a small home and start there? Yes. Okay.

No, that's helpful. I think at the end of the day, what you need to do is look at what is your budget going to look like. So I think the first step would be to say, okay, if I were to rent, what would my budget look like?

And go ahead and build it out fully. What would it look like for you to maintain your current expenses, just the cost of food and all of the things you're going to get a bill for, plus your utilities and so forth, and build that out. You've got a base of income from your social security.

That's great. If you had the full $1.2 million available to you, I'd say, well, you should be able to invest that with a certified kingdom advisor. And the typical rule of thumb here is you could pull 4% a year and you should be able to maintain that principal balance of $1.2 million over a long period of time.

You may actually see it dip below that in any one year or quarter, but over the long term, every 10-year period, you should be able to maintain that. Well, that would allow you to pull out $48,000 a year or an additional $4,000 a month at $1.2 million. So that would say, well, I'd have $5,200 a month between your social security and if you were to pull 4% a year from your $1.2 million. Well, that's certainly if you're living on that amount now, that would cover rent and any other expenses.

So then we could say, OK, well, what if I took $250,000 or let's keep around numbers. What if I took $200,000 out of it and bought something? Then you'd have a million left and that would throw off $40,000 a year and that would give you about $3,300 a month. So now you own a small place free and clear, whether that's a condo or a townhouse or a small single family home. You've got a million dollars left. You don't have any debt because you paid for it with cash and you're pulling $3,300 a month from your investments and you add the $1,200 a month from Social Security. And you're at $4,500 a month and you don't have a mortgage.

And, you know, you've got probably at that point, you wouldn't even need $400, $4,500 a month, I'm guessing, even when you add in utilities and setting aside a little bit, you know, every month for maintenance on the house, that kind of thing. Does that make sense? Yes, it does.

Yes, it does. You know, I've just been on the whole for so long and I just don't know what to do. Yeah, yeah.

No, I get it. Here's what I would recommend. Two things. Number one is I would connect with an advisor because regardless of whether you buy a home, you're going to have a significant sum of money that is going to be entrusted to you as a steward. And you want to be a wise and faithful steward.

The Bible is very clear. We should seek wise counsel. And so this would be an advisor who shares your values as a believer and can help you determine the best course forward, including what is your budget going to look like, making sure you have the proper insurances in place should you consider long term care insurance. So, you know, you've got that expense covered, which is probably the one that could erode your assets, you know, more than anything else in this season of life.

And then finally, whatever's left, whether you buy a house or not, how is it going to be managed and protecting it, trying to grow it conservatively so you can pull an income off of it to supplement Social Security. And so I would recommend you connect with two or three certified kingdom advisors there in Tennessee, interview them, find the one that's the best fit, because I would really think, you know, having a trusted advisor to walk with you in this next season of life is going to be really critical. And that person can also manage this money for you, you know, in a way that's going to help it to grow and generate the income that you need. So I'd head to our website at faithfi.com. That's faithfi.com.

Click find a CKA. And I think that'll give you a lot of peace of mind once you go through that planning process. The other thing I'd like to do is I'd like to send you a book that I think will be really helpful to you. It's by Miriam Neff and Valerie Neff Hogan, and it's called Wise Women Managing Money.

And it's for someone in your season of life that is now going to be responsible for managing a significant amount and just will be an encouragement to you and give you some helpful ideas on what that could look like. And so I want to send you that as our gift. Okay. Thank you. Thank you so much.

You're welcome. Patty, stay on the line. We'll get your information and we'll get that right out to you. And if I can help further along the way, don't hesitate to reach out.

Let's head to Indiana. Hi, Dan. Go ahead. Well, hey, Rob, how are you doing today? I'm doing great. Thanks for your call.

Hey, my biggest. So I'm looking at perhaps quitting or changing my full time job and losing my health insurance. And I'm looking at alternatives to that. I do have an HSA that's fairly substantial, over one hundred thousand in that. And I'm wondering, can I use the proceeds from HSA or the money in my HSA to pay a one of these sharing plans, one of these Christian sharing plans if I chose to get something like that?

And then it's kind of a follow up. I'm wondering, I've read a bit about proposals, rule changes, legislation to make the contributions to these health sharing plans tax deductible or some sort of tax advantage. I wonder if you could address both of those issues for me. Yeah, well, in order to have an HSA, obviously, and be able to continue to contribute to it, you're going to have to have a high deductible health plan in place. Now, because a medical sharing plan is not a health insurance company and you don't pay health insurance premiums, you know, using an HSA to pay for medical shares is not expressly excluded.

However, my understanding is that, you know, that's going to create some challenges. So what I would do is I would just contact our friends at Christian Healthcare Ministries and just get them to walk through your options with you. I love the idea of using a health cost sharing ministry. I think it can be a great option for you. And the nice thing about that HSA is, is that there's real benefits to that down the road in retirement to be able to fund actual medical expenses and other, you know, certain things that qualify as medical, you know, under the medical expense requirement, you know, in the in that plan. And so you can invest it, you can grow it, it'll be there to supplement those expenses over time. And, you know, having that alongside something like Christian Healthcare Ministries, I think could be a great option. So what you would do then is you drop your high cost insurance, you'd go with the medical sharing plan alone, and then, you know, you just use your HSA for qualifying expenses.

Does that make sense? Yeah, I guess I was reading how I could use my HSA if I wanted to. I'm just four years from Medicare, basically. And I was looking at, I was reading some of the benefits, like you can use it, you can reimburse yourself for your Part B premium payments.

It was kind of interesting. You can't pay it directly, but you can make your Part B payments and then you could, if you wanted to, use your HSA proceeds to pay that. And I thought, well, and I know that like during the pandemic, if you were, or anytime, I guess if you're unemployed for a certain amount of time, I think you can use your HSA to pay your health insurance or medical insurance premiums. And I thought, well, why couldn't I do that with a health sharing if I needed to? I guess it's more of about, I wouldn't want to have to budget for that, but depending on that, but like... Yeah, so those membership fees for the faith-based health care sharing is not HSA eligible.

So that would not allow you to do that. But you could have the HSA, excuse me, the Health Sharing Ministry in place for your medical expenses, like going, you know, per incident, going to the hospital, going to a doctor for an incident that goes above the threshold, and then use your HSA for your other medical expenses, which I think would ultimately be the best solution. So let's do this.

I would just reach out to our friends at chministries.org, talk through all of your options with them, and I think at the end of the day, that'll give you what you need. We appreciate your call today, Dan. God bless you, my friend. Charles, I apologize we didn't get to your call today. If you want to hang on the line, we'll try to get you scheduled for a future broadcast. Faith at Finance Live is a partnership between Moody Radio and FaithFi. Thanks to my team today, and we'll see you tomorrow. Bye-bye.