This faith and finance podcast is underwritten in part by Christian Credit Counselors. If you're struggling with credit card debt but don't know where to start, our trusted partner Christian Credit Counselors offers a debt management program that can get you out of credit card debt 80% faster while honoring your debt in full.
Contact them to get out of debt today at ChristianCreditCounselors.org. Disappointment is inevitable, but discouragement is a choice. Hi, I'm Rob West. When things don't go your way, do you get discouraged or even angry? Today we'll talk about a better way to handle financial disappointments. Then we'll take your calls at 800-525-7000.
That's 800-525-7000. This is faith and finance, biblical wisdom for your financial journey. People love to look into the future. We all have hopes and dreams and expectations about what we want our life to be, so we make plans. Plans to save, serve, build a family, work, travel, learn, grow, you name it. Planning is a part of what it takes to make our dreams come true. And there's nothing wrong with planning.
We talk about it all the time here on faith and finance. Planning is an important part of being a good steward of whatever God has entrusted to you. But here's the problem. Our plans don't always succeed. Dreams fail, expectations go unmet, and then disappointment happens, maybe more than we want to admit. Perhaps you invested your savings, but now inflation is killing your returns. Or you worked hard to start a business, but it still isn't making a profit. You planned for your marriage to last, only to experience an expensive divorce.
Maybe you've been working towards that promotion, but someone else got the job. Or you plan to have a big nest egg when you retire, but health issues have reduced your savings. And then there's always the disappointment of finding your adult child living in your basem*nt when you thought they were going to be financially independent.
Maybe one of those situations sounds familiar. The question I have for you is, how do you handle the disappointments and unmet expectations you face? Financial disappointments can cause some people to shake their fist at God and lose faith. Others might become discouraged, depressed, or apathetic. Sometimes disappointment leads to broken relationships.
Stress and anxiety are common responses when our plans fail. In fact, the more important we think something is, the more upset we are when our expectations aren't met. You know, it's not sinful to feel disappointed, but your reaction to disappointments can become sin if you're not careful. According to God's Word, discouragement, anger, unforgiveness, bitterness, and fear are all sinful attitudes. Ephesians 4 31 warns about them, So you can respond to disappointment with discouragement, anger, fear, or apathy.
Or you can take a more positive approach, realizing that unmet expectations are often God's way of leading you in a new direction. Just look at how many disappointed people there are in the Bible, and you see how God worked in their lives. Like Sarah and Hannah, who couldn't have children. Or Joseph, whose brothers sold him into slavery. Or imagine how Jesus must have felt when Judas betrayed him. But the Lord had amazing plans for these unmet expectations. Sarah and Hannah ultimately had children who changed the world. Joseph saved his people.
Jesus saved us all. Here's another thought. Your response to the disappointments in your own life can be a powerful witness to those around you. Maybe this isn't the way you thought your life would turn out, but God can use your unmet expectations for your good and His glory. Now, let's take a moment to consider a Godly approach to financial disappointments. When life doesn't go your way, it's common to look for someone to blame. Instead, ask God to help you forgive the people who've hurt you.
Begin to pray for the strength to live through your difficult circ*mstances. In addition, recognize that it may be time to let go of your expectations and ask God to show you His plans. People and circ*mstances are unreliable, but Hebrews 13a reminds us that Jesus is the same yesterday and today and forever. The Lord is always loving, faithful, and just.
The bottom line? God never fails. You can trust Him, even in the midst of your deepest disappointments, when big expectations come to nothing and people let you down. God will make a way for you every time.
It might not be what you expect, but it will be good. Hold on to what's true from Romans 8-28. We know that in all things, God works for the good of those who love Him, who have been called according to His purpose. Let's close with a quote from the late Charles Stanley, a faithful preacher of God's truth for many years. He said this about disappointment, disappointment is inevitable, but to become discouraged, that's a choice I make. God would never discourage me.
He would always point me to Himself to trust Him. We're choosing encouragement today, which is why your calls are next at 800-525-7000. That number again, 800-525-7000. I'm Rob West and we'll be right back. Stick around. If you enjoy this radio program, you're going to love all of the many different resources waiting for you at faithfi.com and the Faithfi app. You'll find powerful wisdom, free podcasts, articles, videos, and more from leading voices such as Randy Alcorn, Howard Dayton, Ron Blue, and our own Rob West.
Grow in wisdom and knowledge by connecting with a community of thousands of Christians striving to be good and faithful stewards at faithfi.com or by downloading the Faithfi app. We are grateful for support from Praxis Mutual Funds. Praxis Mutual Funds has seven impact strategies that are designed to create positive real world change. More information is available at praxismutualfunds.com. The fund's investment objectives, risks, charges, and expenses are contained in the prospectus and summary prospectus. This and other information is available at praxismutualfunds.com. Investments involve risk.
Principal loss is possible. Foresight Fund Services LLC. Well, it's nice to have you with us today on faith and finance. I'm Rob West, and this is the program where we answer your financial questions, help you apply biblical wisdom to what you're considering in your financial life. So the only thing left is for your phone call, 800-525-7000. We've got, let me count them up, five lines remaining, 800-525-7000. We'd love to hear from you today. Let's go to Virginia to begin. Hi, Sharon, go right ahead. Hi, Rob.
Thanks for taking my call. I am 75. My husband is 76.
We are obviously retired, but we're in very good health, very active. And we went to one of the marketplaces for our supplemental insurance. And while there, he recommended that we get this hospital benefit that would pay extra money should we ever be hospitalized.
And it sounded really good. But as I got to thinking about it, I'm wondering if it was really kindly and wise on my part. It's going to cost us about $100 a month. Yeah, you know, I would explore that a bit more. I mean, usually supplemental insurance policies that cover things, specific things are more expensive than just adjusting your existing policies to better meet your needs. So you may not need this coverage. I would say, contact your primary insurance carrier and explain the supplemental policy and see if they think you need this additional coverage.
And if so, can they add it to your policy and for how much? And let's just see if you can do this in a less expensive way. Okay, now, I don't have an insurance person that we go to.
This was the first time I just went to a marketing agency, which was recommended to me for our supplemental. Okay. All right. So what should I do? Should I find an insurance guy? Yeah, well, I would start with your primary carrier. So what insurance do you have right now? We have Medicare and the supplemental is with Sentara. Okay. All right. And the supplemental is what's costing you the extra $100 a month? No, this is in addition to the supplemental. Okay. Yeah. So that's what I'm saying. This is something he recommended in addition to the supplemental.
Okay. So I would call the carrier offering the supplemental and see if they can add this additional coverage and explain to you where theirs may fall short, where this additional coverage will step in and whether that can be added to your supplemental. You know, you have to have a Medicare Advantage plan or Medigap, and you may be able to cover some of these additional more specific things through that supplemental policy without yet, you know, another policy on top of it. Okay, I think that this Sentara plan, does it make sense that it canceled our Medicare Advantage plan?
Yeah, that's a good question. I mean, I would start with your supplemental and just see what coverage that provides and whether there are any gaps that would require you to have yet another policy on top of it. So I would begin with your supplemental carrier and make sure you understand exactly what you're getting there, you know, what gaps may exist and whether there's a need for this additional coverage because you may find that this additional coverage at $100 a month is unnecessary, or there's a way to get the same coverage for less cost.
So at least that's where I would begin. And, you know, generally, and if you're in good physical shape, the Medicare Advantage plans are better, and it may have adequate coverage. And so I think that's where exploring that a bit more, just to see, you know, if you can get the coverage you need for less cost is going to make a lot of sense.
So I do a little bit more digging on this and perhaps see if the Medicare Advantage plan will serve you better, you know, if you're in good physical shape, and certainly touch base with us again, Sharon, if you have further questions as you get into this a bit more. We appreciate your call today. May the Lord bless you. Let's go to Oklahoma. Conroy, you're next on the program, sir.
Go ahead. I am calling on behalf of my brother. He has credit card debt, about $40,000 in credit card debt with a 30% interest rate.
All right. And he makes about $900 a week. And his payments, just minimum payments is about $1,350 a month. Do you have any suggestions on how he could pay this down? He's looked at bankruptcy or national debt relief program, different things like that.
Yeah. Is he able and I realize this is a huge challenge, just because given the high proportion this payment is to his overall income, because, you know, even if he's taking that 900 a week, and you know, in the months where he gets an extra payment, if he's saving that to try to normalize that he's got about 4000 a month coming in. And as you said, he's spending about 1350 of that on his credit cards. Is he able to make that happen and live within his means just by eliminating every other unnecessary expense or is he going underwater every month? He has been going underwater. He has not been able to do it in the last 20 years. Do you think that it's possible?
I mean, could he make a dramatic change? So let me ask a couple of questions. First is, is he married or single?
He's married and he has four children. Okay. All right. And yeah, I mean, so this is really challenging. I mean, the way I would typically recommend you handle this as you get in a credit counseling program, where the interest rates drop, and now all of a sudden, through one level monthly payment without taking on new loans to replace the debt or consolidate it, we're actually making meaningful progress toward the debt reduction. But that's going to be a minimum of 3%.
So, you know, you said it was, I think you said it was 40,000. So at 3%, I mean, possibly that payment comes down to 1200 a month. But, you know, that's obviously a real challenge. Now, if he can find a way to do that, if, you know, he and his wife are on board, and they're literally saying, okay, for the next several years, we're just going to double down and, and make this happen, either by eliminating every unnecessary expense, which is not going to be easy, but it can be done. Or, you know, maybe he's out getting a second job, or she's working if she's not already, or he's getting additional hours, you know, on his current job, I mean, getting really creative, that would be the best way to go to avoid bankruptcy, because now he's actually making some meaningful progress.
And so I, I would recommend you connect with our friends at Christian credit counselors.org. If he's unable or unwilling to do that, then I think it, you know, at some point, we're going to be in a bankruptcy situation, because he may be forced into that just because of the the judgments that would likely be coming down the road against him that could end up, you know, resulting in some garnishment, things like that, when a court gets involved. Because eventually, if he's going underwater every month, the credit cards are, he's going to reach the limits if he hasn't already, and he's going to be cut off. And then things are going to go into arrears if they're not already, and then turned over to collection and then kind of the process rolls from there.
And there's not only the financial toll, but the emotional toll that comes from that as he begins to get pounded by those collection folks, and you know, there's some of their tactics are less than scrupulous. So, you know, I would recommend he, you know, really, as a heart to heart, he and his wife and just say, you know, are we willing to double down and really attack this and if they are either through cut, cutting spending, getting more income coming in, or both, you know, then I would head to Christian credit counselors.org. Okay, can they handle this on their own as far as being able to hold the creditors and cut interest rates just to make principal payments? No, they can't. I mean, in the sense that they would have to get behind and then try to go in and negotiate settlements, it's far easier to work through a credit counseling agency because these lower interest rates are already set.
If you're willing to work through a nonprofit credit counseling agency like Christian Credit Counselors, there's no negotiations involved and you don't have to get past due. Hey, thanks for your call, Conroy. We appreciate it.
We'll be right back. Have you downloaded the faith by app yet? You need to do that today because this is going to make your life easier. Yes, you can manage your money through the in app envelope feature, but also plan out future goals. I want to buy a house in five years and I'm on track to do that.
Here's also what I like. You can connect with people around the country. It's like social media, but better. Ask a question, get an answer and share what you're learning about money and investing. So why don't you grab your phone right now and download the faith by app? Do you feel like your hands are tied with debt, preventing you from serving God? If you have credit card debt, Christian Credit Counselors can help through our debt management program. We can get you out of credit card debt about 80 percent faster while honoring your debt in full. For more information on how Christian Credit Counselors can help, visit Christian Credit Counselors dot org. That's Christian Credit Counselors dot org or call 800-557-1985, 800-557-1985.
Helping you see God is your ultimate treasure. That's what we do here on faith and finance each day. Let's go right back to the phones to Chicago. Hi, Larry. Go ahead. Hi, thank you for taking my call. I listen every day and pick up great tidbits for you. I'm about 65 years old and I'm financially secure and I want to do something for my grandson.
He's going to be two in August. And what I want to do is I want to make something as hands free as possible because my daughter is not the most astute with taxes and I know I'm not going to be around forever. So mutual funds with regard to, you know, municipal bonds are OK. And I've done a uniform gift to the miners with my daughter previously, but I was around to manage it. So is there any suggestions you have that I could like throw 20 grand at here or there or anywhere and kind of not worry about it again? Yeah, it's a great question, Larry.
And perhaps one of the indexes would be a solution for you that would work well. So it would not be a systematic contribution. You're looking at a one time contribution, probably. Yeah, a one time contribution that I really nobody really has to keep track of the tax consequences. And I don't know how that's going to happen because I know those are the two things that are always going to happen, right?
Taxes and getting called home. Yeah, exactly right. Yeah. I mean, somebody is going to have to handle the taxes and depending upon how this account is titled is going to ultimately determine who's responsible for paying the taxes. The only challenge with the UTMA or the UGMA, which is a custodial account, is that it becomes the child's asset at the age of majority. So when she turns 18, if she's either not spiritually or financially mature enough to handle it, it's her money. She can do with it what she wants. So are you comfortable with that? Or would you rather you or your daughter be the one to decide when she gets it?
No, they let them fly on their own and make their own mistakes and learn something. Alright, so then you could do a custodial account because I suspect I mean, along the way, she probably won't have, you know, much in the way of income. And, you know, then you wouldn't have to worry about it. With that custodial account, you know, the, the, the custodial accounts are subject to what's called the kiddie tax. So this rule applies to unearned income up to a certain threshold.
And then over that threshold, the child child pays taxes at the parent's rate. So somebody is going to have to look after that just to make sure that the filings happen appropriately. But it should be fairly simple. I mean, I think the key is to put this in something where you don't need active oversight of it. And that's probably going to be one of the index solutions where you just pick a broad market index, you drop the money in, and then you're just knowing, okay, I'm capturing the broad moves of the market, maybe it's the S&P 500, you know, or the Russell 1000.
So you're not picking winners and losers, you're just saying, as the broad market does well, this account is going to do well over time. And then obviously, there will be, you know, taxes that will have to be paid along the way, you know, for any distributions, meaning dividends. But, you know, until it's sold, there's not going to be, you know, much in the way of taxes that will have to be paid, if anything, given that it's in that custodial account. So you could, you know, go to a Schwab, for instance, and open like the Schwab intelligent portfolios where they kind of use one of these robo advisors to manage it for you, it's very low cost, probably one fifth of 1% a year.
And, you know, it would make sure that it's properly diversified among largely stocks, but probably a smaller allocation of bonds, but only using the exchange traded funds. And, you know, as long as your daughter could hand that over to a CPA or somebody who's filing her taxes, then they can include it. Any chance for a Roth IRA or a regular IRA for the young guy? She has, or he, the child, has to have earned income, and so if they have any earned income, they could contribute, or you could on their behalf, up to the amount of earned income until you reach the annual limit for the year, which happens to be, you know, $7,000 for this year.
But if they don't have earned income, they're not working, then the IRA is not an option. Well, thank you so much. I really appreciate you doing what you do. Happy to do it, Larry, and thanks for your call and your kind remarks, sir. I appreciate you.
To Tampa, Rebecca, go ahead. Yes, I want to know if mortgage and a small loan, if small extra payment amount is the same, would be about the same as making one yearly payment to principal only? Does it make a difference?
It does. You know, the sooner you pay toward the principal, the better because every month that goes by that you're not paying interest on the amount that you reduced through that principal reduction payment is good for you. So all things being equal, if you were to send $100 a month starting in January versus $1,200 all at one time in December, you'd be better off doing the $100 a month. Now, if you could do the $1,200 in January, that would be better than $100 a month for the year.
You see my point here. So the sooner we can make that payment to principal, the better. And if we do that systematically, either through an annual principal reduction payment or through a monthly small amount to principal reduction, both of those are going to work for you.
But if you're really just looking to crunch the numbers and figure out which is better on paper, paying it off sooner rather than later is always better. Okay. Is that helpful? It is, yes. Thank you.
Okay. You're welcome. Let me also mention, Rebecca, if you're comfortable on the internet, there's a lot of great mortgage calculators out there. If you just type in, you know, principal reduction calculator, you'll find a lot of free calculators where you can put in your loan amount, the balance that you have today, the interest rate, the scheduled payment. And then you can start playing with the calculator to say, how much interest would I save if I pay $25 a month? How much would I save at $50 a month? How much would I save if I do, you know, $1,000 right now? And you could see that play out in the amortization schedule will tell you exactly what the benefit is. And you may find that, you know, that's the incentive you need to do a little bit more just because you see how quickly those numbers add up.
Let's go quickly to Muskegon, Michigan. John, go ahead. Yes. My question is, what is the difference between a living trust and a will and which one is better? Yeah, it's not better or worse.
They're just different. So a will is really important for everybody because it's going to make sure that your wishes with regard to your assets and your personal effects and even a guardian, if you have minors, is named so that, you know, your wishes can be honored at death. The difference with the trust is why some people will use a trust in addition to a will is either, A, they want to try to pass their assets outside of probate, which can be expensive and time consuming. Maybe they have several pieces of real estate. They want their estate plans to be anonymous rather than public. You know, those would be the main reasons why you would have a living trust. So I think at the end of the day, you just need to talk through your specific situation with an estate attorney. So I would connect with somebody in your area. And if you don't have one, a CKA in Michigan can make that referral. John, I'm sorry, we're out of time.
I hope that brief information helps you, though. Thanks for calling today. I hope you'll make plans to join us again next time for another edition of Faith and Finance. Faith and Finance is provided by Faith Buy and listeners like you.
