Year-End Giving from Your IRA

At this festive season of the year, those of us with means should make some slight provision for the poor and destitute. The workhouses, are they still in operation? They are.

I wish I could say they were not. Oh, what can we put you down for with that? Nothing. You wish to be anonymous?

I wish to be left alone. Hi, I'm Rob West, and that was Ebenezer Scrooge in A Christmas Carol. Are you making provisions for year-end giving in this festive season? I'll talk about a wise way to do it, and then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith & Finance Live, biblical wisdom for your financial decisions. Well, the holidays are a time of traditions for most of us, and one of those may be special year-end giving. Many times that means just writing a check to your church or favorite ministry, but we want to thank the folks at the National Christian Foundation for a great article on an alternative way to give, and a new twist in 2023. Now, maybe you've wanted to make some special gifts this year, but economic stresses have taken a toll on your cash reserves. There are tried and true strategies for making gifts out of your IRA, and a new option to fund a charitable gift annuity that way. I know IRAs can be confusing, and eyes are probably glazing over all across the land, but stick with me for a moment. We'll break down the options by age, and that should make it easier to understand how to maintain or even increase giving to your favorite ministries. Of course, these are general recommendations and may not apply to everyone. You should consult with your CPA for specific advice based on your circumstances.

Okay, here are a few terms you need to understand first. Adjusted Gross Income, or AGI. This is basically your income before you take your standard or itemized deduction.

Regular Distribution. This is just money taken from your IRA after you turn 59 and a half. It's reported as income on your tax return. Qualified Charitable Distribution, or QCD. This is a distribution from an IRA paid directly to the qualified charity after the owner turned 70 and a half. In 2023, an IRA owner can make QCDs of up to $100,000 annually.

The amount is not reported as taxable income on your tax return. Required Minimum Distribution, or RMD. This is money that must be withdrawn from an IRA when the owner reaches 72 or 73, depending on their birthday. You can satisfy this requirement by making regular distributions, QCDs, or both from your IRA. So, you'll have to make distributions at some point, but you may be able to minimize the tax hit by taking certain actions based on your age. At 59 and a half or older, you can take distributions from your IRA without that pesky 10% penalty. You still have to pay taxes on that money, but you can offset some of the federal income tax by making a deductible gift to charity in the same year.

That option is always available. In 2023, the deduction limit for cash gifts is 60% of your AGI, and that will be tightened to 50% of your AGI after 2025. Now, that's only for federal taxes. You should consult with your tax professional to see how cash giving affects state taxes, if any.

Okay, here's the next age to look at, 70 and a half. As I mentioned, that's when you can make a QCD directly from your IRA to a charity. It does not trigger a taxable event because that money is not included in your adjusted gross income. Now, what's new in 2023 is that a cash gift can fund a charitable gift annuity, or CGA. QCDs are limited to $100,000 per year, but starting in 2023, you can make a one-time election to use $50,000 of your QCD to fund a charitable gift annuity, which will make regular lifetime payments to you or to you and your spouse. What is left afterwards is kept by the charity.

Now, at age 72, every IRA owner must start taking an annual required minimum distribution, if they haven't started already. You can do that with regular distributions, QCDs, or both. For example, if your RMD is $50,000, you can make a QCD of $30,000 directly to a charity with a $20,000 regular distribution to yourself. You could make that $20,000 a deductible gift to a donor-advised fund at the National Christian Foundation. Go to ncfgiving.com to learn more. All right, your calls are next, 800-525-7000.

That's 800-525-7000. Much more to come just around the corner. Stick around. The opinions offered during this program represent the personal or professional opinions of the participants given for informational purposes only.

Any information provided is not intended to replace advice from a financial, medical, legal, or other professional who understands your specific situation. Great to have you with us today on Faith & Finance Live. I'm Rob West. It's time to take your calls and questions today at 800-525-7000. Again, that number is 800-525-7000. You can call right now. Our team would love to tackle whatever you're thinking about financially today and help you process that in light of biblical wisdom.

Once again, the number is 800-525-7000. Before we dive into your questions today, we're seeing some record-breaking number of Americans that are engaged, well at least this past week, in shopping over the Thanksgiving holiday weekend. One group of nonprofit financial counselors also saw, though alongside that, a significant increase in requests for debt counseling during the holiday shopping season kickoff as well. Money Management International says it received a 44% year-over-year increase in the number of consumers seeking its services during the week of Thanksgiving and a staggering 80% spike in calls on Cyber Monday.

In a typical year, they see a notable decrease in calls during November and December and then in January and February as the holiday bills hit. Well, folks begin to set some financial resolutions for the new year as well, but this recent surge is not entirely surprising because there's been a steady increase in the number of consumers seeking credit counseling over the last 18 months across all age groups. In addition, the average level of total unsecured debt among consumers seeking debt help has also steadily risen from around $20,000 to almost $30,000 during the same time frame. This alongside, of course, higher expenses because of inflation and record debt levels. We're now over a trillion dollars owed on credit cards.

So what does all that mean? Well, it just means that we need to be on our guard, really careful, trying to dump debt where possible, get on a plan to get out of debt. Our friends at ChristianCreditCounselors.org can help. Really important that you have that emergency fund in place of three to six months expenses. That's going to help to shoulder any unexpected expenses that come your way so you're not putting things on credit cards. So we put that out there just as a reminder that we're here to help. We'd love to suggest some solutions for you. And feel free if you're in that situation with credit card debt, you just don't know where to turn. Well, give us a call today.

800-525-7000. All right, let's dive in. We're going to begin in Florida today. Hi, Zed, go ahead. Hi, everyone. How are you doing today? I'm doing very well. Thank you.

Thanks for taking my call. The question that I have is, I have a business that's operating since 2003. I have a 20-year business that does me very well. I'm doing over $100,000 a year with the business. Yeah. But I am on the age to retire, 62. So what I was thinking to do is to move the business to my wife's, under my wife's management, even though I was going to be working with her, and get retirement through the Social Security. And I don't know if it would be a good idea to do that or not. Yeah.

Well, there's a couple of things going on here. I mean, there's obviously the financial considerations and we can talk about, at least at a high level, some of those considerations today. And, you know, this doesn't replace you doing some real financial planning with a competent financial planner who can look at retirement and all the other aspects of your financial life.

But we can at least get started today. But then there's the non-financial side as well, which is, you know, our calling doesn't have an expiration from the Lord. You've been gifted with certain skills and abilities to be in service to the Lord until he calls you home. And so we don't want to retire from something.

I think we want to retire to something. And, you know, so I think really seeking the Lord in prayer and saying, what do you have for me during this next season of life? How can I best be used in service to you and to others around me? And is that right here in this business, this platform that you've given me to impact your suppliers and vendors and customers and all the people you interact with?

Or is it something else entirely? And, you know, I would love for you to have a plan for that before you enter retirement. And all of a sudden now, you know, you're wondering what you're going to do with your time. Let's go back to the financial piece for a second. You asked about retirement related to taking Social Security early. You know, we generally don't recommend that unless somebody is in a real difficult situation and they just need the money.

And I'm not hearing you say that. The reason is that's going to lock in about a 30% reduction in benefits for the rest of your life. So you get that annual benefit statement from Social Security and they've been estimating based on your work record what your Social Security benefits will be at full retirement age. Well, that's either 66 or 67. But if you're to take it at 62, that number that they've been estimating is, you know, going to be about 30% lower. And so, you know, if you can delay that at least until full retirement age, that would be good and perhaps even until age 70. And given that you're planning to continue to work in the business anyway, whether, you know, you're taking the lead on managing it or your wife is, because if you don't need that money, you're not going to get that 8% guaranteed increase anywhere else. You're certainly not going to get that in the stock market.

And so I would encourage you to hold off unless there's some other compelling reason for you to take it early. Does that all make sense though? It does make sense. A lot of it. That's why I called because I was so sure what to do. Yeah, yeah. Very good. So talk to me just about, you know, what's causing you to want to make a change just in terms of how you and your wife are currently managing the business and this idea that you would, you know, consider retiring even though you really don't want to leave, you know, your work.

What's going on behind the scenes there? Well, we have four real estate properties that are rented. I have mortgage on all of them, but all of them have a lot of equity and we get some passive income through them.

Yeah. And if I retired, I would get additional money from the Social Security, which could just get us doing pretty good. And my wife could take over the income would be under her name. The money would come anyway, but under her name, I don't know if that would make a difference or not because we filed together as husband and wife.

Yeah, it really doesn't matter who kind of takes the lead. It's really about just kind of the division of the labor. So the business you're describing, is the business actually running these rental properties or is it something else and you have the rental properties on top of it? It's the commercial properties and personally, we have two other properties under our name. Okay, so the business is real estate, operating this real estate, correct? Yeah, it's a computer business, technical business, but the business also brought two houses that we rent out. Okay, all right.

Interesting. Well, you know, I mean, you know your business well, you know, kind of how you want to handle things moving forward. You know, it's really less about the tax implications in this case, because again, as you said, if you're married filing jointly, income to you and or your wife is income.

So it doesn't really matter who's getting it. I think the key is how do you want to spend your time in this season of life? How much do you want to work? How much does she want to work? But, you know, given the income sources that you have, it sounds like you're not struggling to pay your bills. So from that standpoint, you know, again, I would really encourage you to consider waiting on taking the Social Security just because you don't need it.

And it's not look doesn't sound to me at least like you're looking to stop working. You're wanting to continue. You just have the opportunity to take this money.

But if you can wait, you're going to get a check 30 percent higher for the rest of your life, which I think you'll appreciate down the road. I hope that helps. Thanks for your call. We'll be right back. Thanks for joining us today on Faith and Finance Live.

I'm Rob West. We're taking your calls and questions today on anything financial and we have some lines open. We don't always.

We do right now. So you can get through if you call right now at 800-525-7000. We'd love to hear from you. All right.

Let's go to Chicago. Hi, Tim. Thanks for calling, sir. Go ahead. Hi, Rob.

Thanks for taking my call. I have a question for you. You know, everything around the world, they say, you know, pay off your debt and everything's good. I notice in the last six months and I owe absolutely nothing to anybody and I pay off my credit cards every month.

And I'm a smart guy. Use my credit cards all the time. But I pay off by the time they're due and I get my two or three percent on the credit cards where they say you can. But I notice my FICO score has been going down in the last year. It went from like 830.

I'm down to like 785. But when I click on the button and I say, why is my FICO score going down? It's because it says I don't have any revolving credit.

Right. So am I getting punished for not being in debt? Yes, you are.

You absolutely are. And that's unfortunately the way the algorithm works, is that the most recent information impacts you the most. And 10 percent of your score is made up from your credit mix. So what they want to see is that you have active accounts that are across the different credit types. So one credit type is installment loans. That would be a car loan or a mortgage. Another credit type is a revolving account.

That's what you're seeing there. That would be most often a credit card, whether that's secured or unsecured. And because you don't have any active accounts, well, you do. You're charging things up and paying them off every month, right? So you do have some active revolving accounts?

I do. I have three or four different credit cards, but I pay them off. Yeah, you don't get penalized for paying them off.

As long as you have active accounts, that's the key. Have you had one or more accounts that have closed or been paid in full recently? Maybe two years ago I had a car loan and that was about it a couple years ago. My big concern is, let's just say I want to go and buy a brand new car and it costs $40,000. And they pull up my FICO score and they say, well, you're not excellent. You're not over $800,000. You're $785,000. Am I going to get dinged or questioned or am I not going to get the best rate?

Do you know? No, you should be fine because the key here is as long as you have a score north of between $720,000 and $740,000, let's say $740,000, you're going to be fine. You'll be able to qualify for the very best rates and terms. And you're saying the lowest you've seen your score is $785,000. So you should be in good shape.

When you get up above $740,000, other than bragging rights, you're not going to do anything to improve your situation because you're already qualifying for the very best rates and terms. So I wouldn't really worry about it. It might behoove you to go ahead, which you should do every couple of times a year anyway. You may want to go ahead and pull a copy of your three credit reports, not your credit score, your three credit reports from TransUnion, Experian, and Equifax just to make sure there's not any incorrect or erroneous information on them. And the best place to do that, you can access all three at AnnualCreditReport.com. AnnualCreditReport.com shouldn't cost you anything.

And just give them a once over because there may be something on there that is not right. But apart from that, it's probably just that you have less active credit going today than you did a couple of years ago. Your score is going to move around anyway. And depending on where you pull it, historically you may have been looking at a FICO score and maybe now you've pulled it from somewhere that gives the Vantage score. Just two different companies with two different algorithms that generate scores a different way.

And so it's not uncommon, depending on where you pull it, that it's going to look different from one vendor over another. One of them may be looking at your TransUnion file and the other may be looking at your Equifax file. And maybe not all of your accounts are reporting to TransUnion. They're all reporting to Equifax. So I think at the end of the day, Tim, you're not going to have any problem getting the car loan you want when you go buy that car unless you get down below probably 730, 720. And it shouldn't drop that far.

It really shouldn't. I mean, there's no reason unless you have a missed payment or something. I'm not hearing anything, especially with you continuing to charge on these accounts and pay them off every month.

That's showing active on-time payment history. And that's the key. So I think you're in pretty good shape. If anything, once you buy the car, you probably will see after you get beyond just the inquiry, which is going to pull it down a little bit, but that won't matter because you'll already have the credit, you'll already have the score.

By adding that car loan will probably six months after you buy the car, you'll find your scores back up to the high point where it was. Okay. All right. That was the main thing. Like when I want to go buy the car, I just want to get the best rate possible.

And you will with anything close to what you're saying your score is today. Great. All right, Rob. Thanks for that. You're welcome, Tim. You too, sir. God bless you.

800-525-7000 to what will stay in Illinois. Hi, Rhonda. Go ahead. Hi, Rob. How are you this afternoon? I'm doing great. Thank you. Wonderful. Thank you for just want to say what a blessing you are first to us and Ministry of Finance.

Real quick. A couple of days ago, I was listening and you were talking about whole life versus term. I have a term policy that is going to end in about 12 years. I'm 60 now, so it's going to take me to 72. My insurance agent is talking to me about converting that over to a whole life.

But like I said, you had mentioned you weren't a fan of the whole life. So I'm wondering what would be the best route for me to take at this point? Yeah, it's a great question here, Rhonda. And I want to unpack it and I don't want to rush it. So let's do this. I've got to take a quick break.

When we come back, I'll weigh in on this. You can, in many cases, convert that if there's a rider on there that makes it convertible to a whole life policy. The question is, does that make sense and do you need it? So let's talk about that just around the corner. Talking to Rhonda in Zion, Illinois about possibly converting term insurance to whole life insurance. Back with much more right around the corner. Stick around. Thanks for joining us today on Faith and Finance Live. I'm Rob West. We're taking your calls and questions today.

Looks like all the lines are nearly full. So let's dive right back in. Before the break, we were talking to Rhonda. She called to ask about her term policy. It expires when she's 72.

She's 60 now. So 12 years from now. And her advisor, it sounds like, is recommending she consider converting it to a whole life policy, which can be done. It typically would involve a conversion rider, an additional option that you would add to a term life insurance to give you the option to convert some or all of your term life policy to a whole life insurance policy, which would then allow you to extend it beyond the end of the term. But as I was alluding to, Rhonda, before the break, you know, the question is, do you need life insurance in that season of life? And the reason I recommend generally term insurance is because you cover the risk that exists during your working years. So if you have, you know, typically it's a married couple, you know, one may be the bread earner or winner or maybe both are working. And if one of you passes away and you're a person that's earning income and the other spouse is depending upon that, then the life insurance should, you know, hopefully come in and cover that so that you can continue to pay your bills, maintain your lifestyle, maybe pay off the house, those kinds of things. But typically, once you get to, in your case, 72, you don't have that risk. If you're married and both still living, you know, then if one of you passes away, there's not a hardship that's created for the other spouse financially because you're living off of Social Security and retirement assets that you've accumulated. So I guess that would be my main question is what need exists for life insurance at age 72?

Is it just so that there's money there for an inheritance or something else? Well, Rob, I'm going to say first, my husband is going to be glad I called you today. I am married. My husband is the breadwinner of our home. His income is longer than mine.

So for me, I really was just, you know, just wanting to leave a little something. He would probably be just fine if I didn't. And he tells me, don't spend your money on insurance, Rhonda, I got you. Yeah, well, and I think that's the right question to ask is, you know, let's, you know, you're spending a certain amount every month. It's going to be more when you convert it to whole life and it's going to get more expensive over time. And so the question is, you know, would you all be better off recapturing that money in your budget so you can set it aside and build up emergency savings or give it away? And so rather than you continuing to fund a policy that's getting more and more expensive when there's not a real need for it, I think, you know, that's where if we if we're, you know, take a step back, we might say, you know what, let's drop that policy.

We don't need it anymore. Now, maybe you wait and continue to pay on it until 72. And, you know, I don't know your financial situation, but maybe by 72, the house is paid off.

And, you know, you're both fully retired and you've got your income sources in place. And so, again, there's no need for this insurance. So that's just one more expense we can eliminate in that season of life. And that could be really helpful or it could allow you to redirect that money to something else. Does that make sense?

Rob, that makes perfect sense. And I listen very carefully to you about budgeting and saving for emergency funds and things like that. So I'm the money wise person in the family and we are definitely implementing all these things that you said. But what you did say was, go ahead.

No, no, go ahead. What you did say was to maybe go ahead and keep it till I'm 72 when our house is paid off. Because at around that age, our house will indeed be paid off.

And then there won't be any need for me to continue paying an insurance payment. I can just put that money aside for savings or giving or something like that. So that makes good sense to me.

Well, there you go. I appreciate that. And yeah, I think that does make a lot of sense to me, so long as it continues to fit in the budget. The nice thing about a term insurance policy is it's level term until you reach the end of the term, which in your case is another 12 years. So, you know, as long as it will continue to fit in the budget, you guys may be thrilled that you know that that's there in case the Lord calls you home.

Your husband could pay off the house and, you know, but when we get to that point, we let it go and redirect that money elsewhere. So it sounds like a great plan to me. Rhonda, I appreciate your gift of encouragement today. You've certainly been an encouragement to me and I appreciate you being on the program. Thanks for being a faithful listener.

God bless you. Let's go to Lancaster, Illinois, I guess. Judy, go ahead. Yes, it's not Lancaster, Illinois. It's Pennsylvania. Okay.

That's what I was thinking here. Go ahead. Yeah. I had a regular bank savings account. I changed it over. I won't go through the long details of that, but I changed it over to my regular bank or new bank and it was still just a regular savings account earning probably 40 cents a month interest. And six months ago, they asked me, I went in the bank for some reason and the teller said, would you like to earn three point whatever on your savings?

Well, yeah, I guess I would like that. So for the last six months, I didn't know it was a money market account, but that's what they said it was then. And it was three point whatever for six months. And it was one hundred and thirty, forty, fifty dollars a month. Last month it was one fifty five. This month it was ninety five dollars and change. And so I called to ask why the drop. And they said because the percentage dropped and it's only one point nine now. So my question is, should I just continue and take a set of variable and should I just take.

Go along with whatever happens to show up for the month or should I change over to see these or something? There's about a little over fifty thousand in there. Yeah, it's a great question.

And, you know, I think it really comes down, Judy, to the hassle factor. I mean, are you willing to go through some extra steps in order to get that number up? Because what it sounds like is your bank had a promotional offer that was in place and that has come and gone. And now it's back down to a rate that's pretty sub par to where interest rates are today. You know, I'm looking at Bankrate.com right now at, you know, high yield savings, meaning it's not a CD, it's a savings account with zero fees and zero minimums from Capital One, American Express. Marcus, which is the retail operation of Goldman Sachs, Barclays, all of them are four point three and higher right now with, again, no minimums, no fees.

And so, you know, on fifty thousand dollars, you know, you could be earning twenty one hundred and fifty dollars a year or one hundred and eighty dollars a month. But what that would mean is you'd have to go out and open a high yield savings account with one of these at Bankrate.com and then link it electronically to your checking account. And then you could move the money back and forth on their website without any fees whatsoever through the ACH system. That's what I would do. But it does require for you to have one extra account that you have to keep up with.

But if you go with one of those online institutions that I mentioned, they're pretty aggressive about keeping the rates up where they should be at the high end of the range, which today is four point three percent for savings. Stay on the line. You and I'll talk a bit more off the air. We'll be right back. Great to have you with us today on Faith and Finance Live.

I'm Rob West. We're taking your calls and questions today. In fact, we've got so many calls. We're going to do our best to get through them today. Let's go right back to the phones to Orlando, Florida. Hi, Rick.

Go ahead, sir. Yes, I've been listening to your program and I've heard you say that if you've been retired and you're taking Social Security, it's based on, I think you said the last 30 years of your life or something like that. But if you go back to work and you're earning more money, that some of those lower years can be dropped off and your Social Security benefit will be recalculated to a higher rate. Does that happen automatically or does that something that I have to go do? No, it's automatic.

So every year they'll take a look at your earnings record and if you're continuing to work paying FICA taxes and your earnings for the current year replace one of your high 35, it's your 35 highest years of earnings, then your benefit will automatically be recalculated. Okay, so I don't have to do anything. Just wait for the money to roll in.

That's exactly right. So you're buying coffee Rick next time and I'm in Orlando. Okay, since your checks going up. Not a problem.

Hey, what do you know? Wow. I love it. All right. Hey, thanks my friend. Thanks for being on the program today. We appreciate it.

Let's go back to Chicago. Hey, Sue, what can I do for you? Hey, I'm 65 and I've got a little bit of a work record. So I've earned Social Security on that record.

My husband is 62. My question is if I took Social Security early at the age of 65 and then if he took his at full retirement age for him and I bumped up to half of his, would my half be smaller because I started taking mine? At an earlier, you know before my full retirement age.

Yeah. No, so you could take yours and then wait and once you switch to his you would get whatever you're entitled to on his at that time that you take it and at any point you're allowed to switch to the one that's higher. So you're only locking the benefit in based on the one that you start taking. So in the case where you're big collecting based on your earnings record, that one's locked in depending on when you take it early for retirement age all the way to age 70, whatever you choose, but it, you know, that doesn't lock in your spousal benefit until you were to switch over to that one and start taking that benefit. So I get a full 50% of say he retires and starts taking it at full retirement age or even to 70 when I would bump up I my half would not be impacted at all by the fact that I took mine earlier.

No, what would your age be though at that point? Would you be at full retirement age when he starts taking his? Yeah, because I'm old and I'm 65, he's 62. Oh, yeah, yeah, yeah, yeah.

So absolutely. So you at that point, you could reevaluate and say, is my is the 50% of his spousal benefit more than what I'm collecting on my work record? And you're right, if you're beyond full retirement age, you know, then you could lock in that full benefit potentially. Okay, but so I guess that my question is, you know, I'm 65. So my full retirement age is almost 67.

I think 66 and nine months or something like that. So if I don't say I don't wait till my own full retirement and start taking, you know, a little bit early. I just wonder if I'm leaving money on the table is the idea like, I know. Yeah, yeah, you potentially you are I think the question is, will your full benefit based on your work record be less than your spousal benefit 50% of his?

Do you know the answer to that? Yes, it will be. Yep. It will be about, I don't know, three or $400 less. Your spousal benefits more? Yes, his will.

Yes, my, my own work record yielded yields a smaller than half of him. Yeah, yeah, yeah. So what you could do is start taking yours now and just collect and then wait and switch over to the spousal benefit down the road.

Okay, yeah, I just wanted to because I took mine early, if that if me taking mine early, like caused me to have a deduction and 50% of his so no, no, it's only based on when you start taking that spousal benefit. Okay, so I mean, he's okay. Thank you very much. All right, Sue. Thanks for calling. We appreciate it very much. Absolutely.

To Texas. Hi, Hector. Go ahead. Hi, sir.

Thank you for taking my Hey, I got a simple call. Anyway, I have a 20 year old girl. She doesn't have any credit. I was thinking about taking her with me to be a furniture place and just take out some furniture that we was going to buy anyway.

And of course, I'm going to make the payments, but would that help her to establish her credit or is there a better way? Yeah, so you're looking at she's buying a car. Is that right? No, I'm going to buy some furniture, but I will furniture my apologies under her name.

Just so she can start to get some credit, you know? Yeah. Yeah. Yeah.

And are you planning to pay for the furniture anyway? Yes. Yes. Yeah.

And is there is it like a 0% for a period of time or something? Oh, no. No, I don't think so.

No. Okay, because I'd rather you not go into debt in order to and pay interest in order to build her credit. There's other ways to do it. You could number one, you could add her as an authorized user to an existing account that you have. And that history will start passing over to her file as well. Now, keep in mind, the good on time payment history will pass over with her as an authorized user on one of your accounts, even if you don't give her the card and she can't charge on it. But negative information will go as well. So if you happen to miss a payment along the way, that will hurt her credit.

So you just got to be careful there. She could open her own card, perhaps a secured credit card. She could go to bankrate.com, nerdwallet.com, find out who has the best secured credit cards right now. She puts two or three or $400 on deposit. They give her a limit up to it. Maybe she has a budgeted item that she pays every month. Maybe it's a media subscription to a streaming service or something.

Maybe it's $12 a month. It hits the card. She pays it off. She doesn't pay a dime in interest, but it's reported to her credit bureau or maybe all three that she's an on-time payer. That will start to build her credit. So I don't want you to take a loan on this furniture and start paying interest just so you can build her credit when there's other ways to do it. Does that make sense? Yeah, but it makes sense.

I was going to purchase the furniture anyway. Right, but if you were going to borrow either way. Yeah. I see.

Okay. Yeah, they're going to want you to probably co-sign it because she probably doesn't have a whole lot of credit, so they're going to want to put it in both of your names. You certainly could do that. I think the authorized user or the secured card in her name only might be a better option, but yeah, if you're going to borrow the money anyway for the furniture because you don't have the money. I guess the only other thought I would share with you is, is this a time to wait and try to save up so you can pay with cash? But if you need it and you were planning to borrow it, you can service the debt, then yeah, you could certainly add her to the account and that would start to report over. The only maybe final consideration here is that a lot of times these furniture companies will use finance companies that are not considered top tier lenders. And they look at that when they're determining your credit score, so that's not going to help her as much as let's say you had a credit card with a top tier bank. I'll pick one, Bank of America, and you add her as an authorized user. That would do more for her than her having a finance company, which is typically what's behind a lot of these furniture companies pay, you know, buy now pay later kind of thing.

So I might try to avoid that one just because that's not going to be very good for her to show up on her credit file versus another type of account. Thanks for your call today. We appreciate it. Let's see.

Quickly to Grand Rapids. Hi, Penny. Go ahead. Hi, Rob. How are you?

I'm doing great. How can I help? Hello? Hi, yeah.

How can I help? Hello? Can you hear me? Penny, yeah, sure can. Go right ahead. Hey, Rob. I was thinking of buying a car, and I know, you know, many people don't usually want to think you should buy brand new cars, but the used car, you know, five or six thousand dollars.

Looks like we're losing you. Let's see if you can get you to a better spot and maybe try one more time. You said people usually recommend new.

Pick up from there and go ahead. Yeah, people usually don't recommend new cars, money people like you, but used cars are so expensive right now. And there's, you know, they're only like five or six thousand dollars less, the ones that would look like a two year old car. So do you recommend still buying used or would you go ahead and buy new?

No, it's a great question. I think, you know, historically in a normal environment, you know, you're going to get much more bang for your buck with a used car because, you know, you'd buy a three year old car. You'd miss the prime depreciation years and you get, you know, a better value for still a low mileage car. But you're buying it, you know, 20, 30 percent below the sticker price. This is an unusual environment, which you're pointing out correctly, where, you know, used cars were through the roof.

They've certainly come down this year, but they're still elevated. And I think for that reason, especially as the new car inventories are building and they're starting to offer more incentives because they have inventory. So you're starting to see commercials that you weren't seeing before with, you know, zero percent financing or two percent financing.

You're seeing, you know, rebates that you weren't seeing before. So I think for that reason, it can make sense to buy new. I think the key is just first start with your budget and make sure you're buying what you can afford. And then second, start comparing, pick the car that you want that fits the budget and then start asking the question, does it make more sense to buy new? And what you may find is there's not enough of a benefit to buy used for what you're giving up by having a full, you know, three years or five years of warranty. So I think you're exactly right. Let's put new cars on the table. Let's start with your budget.

But I wouldn't automatically exclude new cars just because they're new. It's a great question, Penny. Thanks for your call. That's going to do it for us today, folks. Faith and Finance Live is a partnership between Moody Radio and Faith Buy. I want to say thanks to Josie, Robert, Amy and Tahira. I'm Rob Les, see you tomorrow. Bye bye.