Rob West: Credit card fees rarely wreck a budget all at once. Hi, I'm Rob West. From interest and late charges to annual fees and cash advances, the cost of using credit can add up quickly. Today, we'll look at how to avoid those costs and make sure the cards you use are serving your financial plan, not working against it. And then it's on to your calls at 800-525-7000. This is Faith & Finance on American Family Radio, biblical wisdom for your financial decisions.
Proverbs 21:20 says, "Precious treasure and oil are in a wise man's dwelling, but a foolish man devours it." That doesn't mean we hoard what God provides. It means wisdom pays attention. Good stewardship includes knowing where our money is going and refusing to let avoidable costs quietly consume resources God has entrusted to us.
So let's start with the biggest cost of credit cards: interest. Technically, interest isn't a fee, but for anyone carrying a balance, it's usually far more expensive than the fees we're about to discuss. According to the Federal Reserve, the average interest rate on credit card accounts being charged interest is currently just over 22%. At rates like that, reward points and cash-back offers lose their shine quickly.
The best practice is simple: don't charge what you can't pay off when the bill comes due. If you're already carrying a balance, consider putting the card away while you work on a plan to eliminate the debt.
Next are late fees. The amount varies by issuer, so review your card's terms and know your due date. Set up payment alerts or automatic payments. At minimum, automate the required payment so an overlooked date doesn't create another expense. Then, pay the full statement balance each month to avoid interest. Just make sure there's enough in checking when that payment hits. A returned payment can bring another fee, and possibly a bank fee as well. Keeping a small cushion in checking can help protect you.
Then there are annual fees. Some cards charge nothing. Others charge hundreds of dollars in exchange for travel benefits, rewards, and other perks. Generally, we'd encourage you to avoid cards with annual fees altogether. The rewards often don't justify the cost, and chasing points or cash back can tempt you to spend more than you otherwise would.
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Since 1995, AdelFi members' card activity has generated over $6.9 million for Christian causes. For responsible credit users, it's a great way to align financial tools with your values. You can learn more at faithfi.com/banking. That's faithfi.com/banking.
Also, be especially cautious with cash advances. They can come with an upfront fee, and interest often begins accruing right away. That's an expensive way to solve a cash flow problem. A better long-term solution is to build margin: a starter emergency fund first, then a larger reserve over time, so an unexpected expense doesn't force you to borrow at credit card rates.
Foreign transaction fees are another cost to watch if you travel internationally or make international purchases. Some cards charge a percentage of the transaction; others don't. Check before you travel so there are no surprises.
And finally, review your statement every month. Look for fees, subscriptions, or charges you don't recognize. That simple habit helps you stay engaged with your financial life.
Here's the larger principle: a credit card should be a tool, never a master. If using one consistently leads to interest, fees, or overspending, the wisest move may be to stop using it. There's no spiritual virtue in having a credit card, and there's no shame in using cash or debit if that helps you steward faithfully.
Faithfulness often shows up in small decisions—paying on time, avoiding unnecessary costs, living within God's provision, and directing more of what He has entrusted to us toward His purposes. So take a few minutes this week and review your credit cards. Know what they cost. Know why you have them. And make sure they're serving your plan, not quietly shaping it.
And if you're looking for a financial institution that shares your Christian values, consider our friends at AdelFi Christian Banking. FaithFi listeners can earn up to a $400 bonus when opening a qualifying high-yield checking or savings account, or a cash rewards Visa credit account. To learn more, just go to faithfi.com/banking and enter the code "FAITHFI". That's faithfi.com/banking and use the code "FAITHFI".
All right, your calls are next: 800-525-7000. We'll be right back.
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Rob West: Thanks for joining us today on Faith & Finance on American Family Radio. I'm Rob West. Well, the lines are open; that means it's time for your phone calls: 800-525-7000. That's 800-525-7000. We'd love to be able to take your questions today, help you apply biblical wisdom to your financial decisions and choices, understanding that money is a tool—a good gift from a good God—for us to be used for our enjoyment, to provide for our families, but also to love our neighbor, and protect the vulnerable, and promote human flourishing through our investments, through our generosity. What a privilege it is to be able to take a portion of what God has entrusted to us and return it for Kingdom purposes. That's what happens when you and I give and invest in a way that aligns with the heart of God in Scripture.
And so we'd love to be able to tackle those questions today when you call right now: 800-525-7000. Whether it's questions around your spending, your saving, your giving, perhaps it's debt reduction, whatever it might be today, the number with lines open is 800-525-7000. Again, that's 800-525-7000. You can call right now.
Rob West: We'll head to those phones here in just a moment. In the news today, student loan debt is often associated with college graduates, but millions of parents are carrying education debt of their own. Parent PLUS loans allow parents of dependent undergraduate students to borrow from the federal government to cover the cost of college. EducationData.org reports that Parent PLUS loans account for about 6.7% of federal student loan debt, showing that the nation's education debt burden extends well beyond former students.
Federal data cited in recent analyses show that the scale of the problem was significant. Roughly 3.8 million Americans hold about $122 billion in outstanding Parent PLUS loans. That works out to nearly $30,000 in debt per borrower on average, although individual balances, of course, vary widely.
Now, for many families, the loans were taken out to close the gap between financial aid, student borrowing, and the full cost of attendance. Unlike loans issued directly to students, Parent PLUS debt is legally the parents' responsibility to repay. The figures highlight how paying for college can affect household finances across generations. And as policymakers continue debating the cost of higher education and student debt, Parent PLUS borrowers remain an important part of the conversation with billions of dollars in repayment obligations tied to their children's education.
Something to keep an eye on. There's obviously a lot of changes going down right now in this whole area of student loans and student borrowing as we have new legislation coming in that's really changing the game with regard to those income-driven repayment options, access to the federal loan forgiveness program, but also just the accessibility of these funds which have been, you know, so widely available at almost unlimited amounts. It has been a key source of the rapid college tuition inflation we've seen, well outpacing even our own higher-than-average inflation just across the board with core goods and services.
And I think it's in large part due to the fact that there's just a seemingly unlimited amount of money, or there has been, available to borrow for college. And so it allows these schools to continue to push these prices up. I think the right-sizing of this program is going to bring, you know, perhaps some changes there, not to mention this demographics cliff we're facing where there are far less students now, which is putting even more pressure on these universities. And we're seeing a lot of the smaller universities close. There's a lot of changes being considered with regard to how students coming out of high school prepare themselves for their careers, thinking about trade schools and even other lower-cost options, some foregoing college altogether.
So, an interesting time, but this whole change in kind of how we look at and view college debt certainly is one that needs to be considered. Here's what I would say: don't miss the opportunity to find other ways to pay for college. You know, taking those AP and dual-enrollment courses in high school can be a huge blessing. I mean, all three of—all four of mine, really—that have been, you know, some now through college, one in college, I've got two in high school—that was a major focus for them is being in those dual-enrollment and AP classes. I think every one of my kids will have at least 12 to 14 of those coming out of high school. Here's what that does: it allows them to take some of those courses before they get to college, which they get credit for. It also makes them, you know, higher-quality applicants because they show rigor. But also, when they get to college, they don't have to take as many credits. You know, my oldest just graduated after two and a half years because he brought so many credits with him. That just saves on the cost of college overall.
So that's one thing. The second is, you know, maybe they're working in high school part-time, maybe they're working on campus with a part-time job. Maybe if they need to focus on their studies, they find something that's a little more conducive to their schedule. My junior and senior year, I was an RA, a resident assistant, so that covered my room and board, and I just was able to fold it into my normal rhythms. And even though I had maybe some office hours once a few hours a week, you know, I was able to, you know, be invested in the lives of the students on my hall and get a major portion of college covered, room and board, just by being a resident assistant. That's the kind of, I think, creative ways that you can pay for college without just automatically defaulting to borrowing just incredible sums of money.
I think another filter we need to look at this through is just this idea that, you know, whatever we borrow—and again, it's a last resort; let's look for every other way, including scholarships and grants, which is just a major source that you may not be looking at. It's not just what the school offers; look in your community. You know, for instance, here in Georgia, the power company offers a $5,000 scholarship that very few people end up applying for; same with Alabama Power in our neighboring state. So don't miss those local scholarships that you can apply for, not to mention the grants.
But I think in terms of a rule of thumb or a filter to determine how much to borrow, think about: how much could I borrow that, based on my career path, what I'm pursuing—and I realize you may not know that until you get a little further in—but I need to have a reasonable expectation, based on the first 10 years of salaries in that field, that I could pay this back in a decade, 10 years or less? And if I can't, I'm borrowing too much money. I think that's just at least a general rule of thumb we ought to consider as we look at this.
All right, we're ready to dive into your questions. It's back-to-school season, so as you might imagine, my sophomore at the University of Georgia starts class today, and so I've got college on my mind.
800-525-7000 is the number to call. We'd love to hear from you. The lines are filling up, but still a few open at the moment. Let me dive in.
Rob West: We're going to begin in Texas today. Jim, go right ahead.
Jim: Yes. My mother just passed. She was 95 years old. She had a great life. And we're dealing with the estate. My father had passed in 2021, and he was 92. And so we're dealing with the estate, and my sister's the executrix. She lives in Mississippi where my parents lived. And so she says he has an IRA, and it's got about $190,000 in it. And I just didn't know you could have money in it in your 90s. I was thinking you had to distribute it by like 20 years or something. So...
Rob West: Good question. Yep, I got that. Let's do this: I'm up against a break here, Jim, but I'll give you my thoughts right on the other side. Stay right there; we'll be right back
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Rob West: Great to have you with us today on Faith & Finance here on American Family Radio. I'm Rob West. The lines are filling up, still room for two more calls: 800-525-7000. Before the break, we were talking to Jim in Texas. His mom and dad passed away—his mom passed recently in her early 90s, his dad passed back in 1991. He had an IRA, it was not retitled in his mom's name, she was the beneficiary, his sister's the executrix of the estate. They have been taking required minimum distributions, and he's just wondering how it's possible there's still $190,000 in this account and whether something was done improperly.
You know, it could be completely legitimate. Because your dad passed in '91, the key idea here is that the IRA rules have changed recently based on the SECURE Act. So back when your dad passed away, it doesn't retroactively apply to your mom's passing. So for deaths before 2020, the applicable rules depended on things such as whether your dad had already reached his required beginning date, who he named as the beneficiary, and how the inherited IRA was handled after death. But if your mom was your dad's beneficiary, and the account was properly maintained as an inherited IRA with distributions being taken under the applicable life expectancy rules, there's nothing suspicious at all about it still having $190,000 left. The RMD just means required minimum, not that the account necessarily has to shrink every year. If the investments earned more than or close to what was withdrawn, a substantial balance could remain decades later.
So I think the only question is this idea that it stayed in your dad's name. That needs clarification. If the custodian was treating it as an inherited IRA for your mom, even though your dad's name remained on the account title, that's normal. But if it literally remained an IRA owned by a deceased person for 35 years and the distributions weren't being calculated under the correct beneficiary rules, that could be an issue. But I think just the fact that it's got the $190,000 in it, Jim, is not necessarily problematic.
Jim: Okay. Just one question. So you don't have a set amount of time that all of the money has to be out of the IRA, like when you're—it's not 20 years after 70 or 73 or whatever? You just take minimum distributions for your whole life?
Rob West: That's right. So, yeah, if you were the one that set up the IRA, you just have to take the required minimums, and depending on how the investments perform, you may not drain it. What you may be thinking of, though, is that the newer rules say that, for instance, there's a new 10-year rule that applies to beneficiaries when the IRA owner dies after 2020. And if it was not a spouse, then it has to be completely drained within 10 years. So that may be what you're referring to. But if it's your IRA, you set it up, or it was passed to a spouse, often they're not drained because if you're just taking the required minimum and keeping it invested, you could be outpacing the required minimums with your investment performance.
Jim: Okay, perfect. Thank you for that information.
Rob West: Absolutely, Jim. Hey, call anytime. 800-525-7000. All the lines full; we're going to get to as many calls as we can today. Out to Texas. Hey, Paul, go ahead.
Paul: Yes. Hi. Since you're in the area—this is not actually your specific thing, but maybe if you know—when I use a credit card that's got points, some of them are, you know, the rotating category ones, you get like even 5% back. My question is, when they have these programs, 2%, 5%, whatever, when I, like, go to a restaurant and use that card, are they charging extra fees to the merchant? And the reason I ask is just a sense of fairness. It's like if the big mega-bank wants to throw me some extra cash, that's one thing, but if they're taking that out of the hide of the merchant, then I'd just prefer to, you know, use a regular credit card.
Rob West: Yeah, good question. I would say yes, but not directly. It's really indirectly, and here's how: the merchant doesn't pay for your points directly; they pay card acceptance and processing fees. Now, where could they in part or indirectly be paying for these premium rewards cards? Well, the premium rewards cards often carry higher interchange costs than some of the basic cards. So the merchant's actual cost depends on its processor and pricing arrangement. And so, therefore, some of these premium rewards cards, you know, the issuer may charge higher fees or take a larger percentage from the merchant to in part offset it. But it's not a one-for-one in the sense that it's being billed back directly to the rewards that you're receiving, if that makes sense.
Paul: Yes, thank you.
Rob West: Yeah. So rewards are, you know, funded out of the general economics of these cards, which includes the processing fee, which includes the interchange costs, but also, of course, includes interest and certain fees like annual fees—which is why a lot of times the cards that have the more rich benefits will charge an annual fee, the idea being that, you know, you're getting far more benefits than the annual fee. Which is why largely business owners will pay these big annual fees, like for instance, Amex Platinum. I mean, you get, you know, access to the airline clubs, and you get premium, you know, status with, you know, hotels and rental car companies, but you're paying $350 a year for it. Well, most business owners are putting that in as a business expense, writing it off, and then enjoying all the benefits that come with it. But at the end of the day, you kind of have to put it all together, and, you know, in part, those fees do support that rewards ecosystem.
Hey, Paul, we appreciate your call. Yes, sir, call anytime.
Rob West: Let's go to North Carolina. Hi, Terry, go ahead.
Terry: Good afternoon, sir. Just kudos. I just wanted to call and give you a praise. We thank you for what you're doing. I've been a long-time listener to you and Dan Celia both. Matter of fact, I started my recovery, as I'm going to call it, for my financial mishaps with him. I was one of them—I'm hoping I can provide a little bit of encouragement to anybody else that might have been in my shoes. When I started listening to Dan, I was over $200,000 in debt between four car payments, credit loans, and everything else, not including the mortgage.
Rob West: Wow. Hey, I want to hear the rest of that story, Terry, if you don't mind sharing it, but I want to give you plenty of time to share it, and I'm up against a break. Stay right there. We'll pick it up on the other side. We'll be right back.
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Rob West: This is Faith & Finance on American Family Radio. I'm Rob West. Our goal each day to encourage you, to equip you to live as a faithful steward, to take you back to God's word to uncover the truths we find in Scripture about how we're to manage God's money, God's way. Before the break, we were talking to Terry in North Carolina. Terry's been listening a long time going all the way back to Dan Celia. Dan was a big influence in his life, and Terry, appreciate your kind remarks about the program that we do today. Had so much respect for Dan. Didn't know him personally, but I've talked to enough listeners to know the incredible impact that he still has to this day, even though he's with Jesus because of his timeless biblical wisdom. But Terry, take us back. I know you were in a really desperate place financially when you started listening to Dan. I'd love for our listeners to hear that story.
Terry: Uh yes, sir. Definitely. It was like I said, I was well over $200,000 in debt between four auto loans and personal loans and credit cards and everything else. And, you know, I kept praying, "Lord, let me buy that lottery ticket and get out of this debt. I won't never get in it again." But...
Rob West: Yeah.
Terry: I kept listening to Dan and what he was saying. And I kept praying about it. And the Lord didn't make it easy on me, but uh He brought me through the struggle and stuck with me. And with Dan's program, I one bill at a time, I took my smallest bill, I took everything extra I had in that month and I put it at that smallest bill. Well, when that bill got paid off, it's like I could catch my breath. And everything I was paying on that bill, I went to the next bill. And I kept paying, I just kept doing every one of them until all my bills, all my credit cards, all the vehicles, and everything was paid off except for my mortgage. And I done that within three years. And like I said, that was well over $200,000 worth of debt that I cleared out just by listening to Dan and doing what he said to do. I didn't talk to him on the phone, it's just by listening to his program. That's all I done. And then, like I said, it wasn't but about four more years later I had my mortgage paid off. And people would be surprised at how much money you can start putting up and putting away once you start paying bills off that you ain't got to pay every month. And how much you can help other people out there that are struggling that just need a little extra hand. Pay a lot bill or buy their groceries or something similar to that. And, you know, it's it's all God's doing and God's will, and I give Him the praise and glory for it. And I give Dan the praise and glory, and I give you the praise and glory for what you're continuing to do.
Rob West: Wow. Well, thank you for sharing that. A couple of things I want to just put a spotlight on that you just said. First of all, you give testimony to God's faithfulness and to Dan's willingness to speak truth from God's Word on a daily basis. Thank you for that. I think number two is you highlighted the power of something we call the snowball method, which is uh just so effective where, you know, you take one bill at a time, in this case a credit card, but you went well beyond that, and you pay everything, you keep it current, but you live lean, you, you know, live well within your means, modestly, and try to free up as much margin as you can on a monthly basis, and you attack the smallest balance because a couple of months later you get that win by paying it off, you get to rip it up, throw it in the trash, and then you move to the next one, and then you move to the next one. And that concentrated focus on one bill at a time with the the progress that you make along the way is what gives you the motivation to keep going. And, you know, you you were tapping into a really powerful idea there, Terry. I love that you continued giving along the way, and I love that you're giving the credit to the Lord, which is where it belongs. You know, Deuteronomy 8:18, even the ability to produce wealth comes from God. It's not just all His, even our ability to actually earn anything comes from the ingenuity God's given us, and the minds, and the skills, and the abilities, and the breath in our lungs, it all comes from Him. And so we give credit where credit is due to God, but He used you as a faithful steward, Terry, and now I guarantee you that encouragement you just shared today is what somebody else needed to hear that's where you were with a couple hundred thousand dollars worth of debt. So uh God bless you, my friend, and thank you for sharing with us today.
Terry: Thank you, sir, and you have a blessed one. And, you know, like I said like you said, I just give all the credit and glory to God and like I said, He put that distaste in my mouth for debt. I do not get into debt today because of it.
Rob West: I love it. I love that, "the distaste for debt." Let's uh let that sink in to you today. Hey, uh Terry, stay on the line. I'm going to have the team send you a copy of my devotional, Our Ultimate Treasure. I'd love for you to spend the next three weeks, you know, as you first wake up, just letting God's Word wash over you. I think it'll be an encouragement to you, and we'll get it out as our gift today. Again, it's called Our Ultimate Treasure, and we'll put it in the mail to you. Lord bless you, my friend. Thanks for being on the program. Call anytime.
Rob West: Let's go to Virginia. Hi, Godwin. How can I help?
Godwin: Um thank thank you for taking my call. Um I owe about 100,000 on my mortgage, and I've saved up to 60k. And uh I can put down towards the payment, can use as a, you know, towards the payment to reduce the principal. Would that be the prudent thing to do? I do have uh some um emergency fund saved up to 13k as well.
Rob West: Yeah. Yeah, the the only thing, although I love the idea of you prepaying the mortgage and trying to get that balance down so you can get to uh being debt-free sooner, I I just want you to be careful because we could inadvertently become too illiquid, meaning you don't have enough in the way of liquid reserves, because as soon as you put that against the house, it becomes very illiquid, meaning you can't get to it. And if you have a $100,000 mortgage and you put 60,000 on it, you still owe 40, your monthly payment isn't going to change unless you refinance, and you probably don't want to do that at this point. It would reset the amortization, there'd be a lot of expense to it. And so you could be in a situation where, yes, your balance is now 40 instead of 100, but you still have the same monthly payment, and now you don't have the reserves that you had. And so I think the question we need to start with is, how much is an appropriate amount of reserves for you to have enough for the unexpected? How much do you have in emergency savings not counting the 60,000?
Godwin: I do have 13k.
Rob West: Uh how much?
Godwin: One and 13. One, three k, 1000, uh 13,000.
Rob West: Okay, so $13,000 in emergency savings?
Godwin: Right.
Rob West: Okay, very good. And how much do you typically spend, how much are all of your expenses in one month, typically?
Godwin: Um generally it would be um about uh 2,500.
Rob West: Okay, let's round up and say 3,000. I would love for you to have at least 18 to 20,000 in emergency savings. And so you're at 13 uh not counting the 60, so I'd take seven at a minimum, seven from the 60, add it to the 13, let's get up to 20,000, okay? Now, we'll call that your emergency fund. All right, well now you still got 53,000 left. Are you contributing to a retirement plan at work?
Godwin: I do.
Rob West: Okay. What percent of your income are you putting in, do you know?
Godwin: Not very much. Uh put like about five percent.
Rob West: Okay. I'd love for you to try to get that up to somewhere between 10 and 15%. And if that left you where you didn't have enough to pay all of your bills because it was taking too much out of your check, one thing we could do is start supplementing the additional amount you're putting into retirement from your salary deferral because you increase the percentage, you know, up to 10 or 15%, and start pulling that same amount that you're now adding additionally to your retirement, pull that from the 53,000 that remains to cover your bills. And essentially what you'd be doing is pulling a little bit out of that savings, which is after-tax money, and putting it in a tax-deferred environment. So that would be one way to go. Apart from that, if you didn't have any other short-term savings goals, like you're going to need to replace a car or you have another expense that is known coming up, then I love the idea of you prepaying the mortgage, but I want to make sure your retirement savings is at the right level, 10 to 15%, you've got at least 18 to 20,000 in emergency savings, and your other short-term savings goals are funded. Then let's prepay the mortgage. We'll be right back.
Announcer: Her name is Dr. Jessica Peck, but you can call her Dr. Nurse Mama. She's bringing hope to teens facing tough realities in our world. Unforgiveness destroys families emotionally, spiritually, even physically down to that neurological level. Choosing to forgive, modeling true reconciliation, changes not only our lives, but the lives of our future generations. The Dr. Nurse Mama Show, weekdays at 2:00 p.m. Central on AFR, or catch the podcast at afr.net.
Announcer: The term providence means God's superintending care over His creation. America's Providential History, with Stephen McDowell. God is at work performing His will in history. And so through this podcast, we're going to be taking a look at the providence of God in history, and in particular in the history of America. America's Providential History, available now on the podcast page at afr.net.
Announcer: We are grateful for support from Movement Mortgage, who provides residential home loans and reverse mortgage options in all 50 states. Guided by a mission to love and value people, Movement seeks to help individuals and families make informed financial decisions from buying a home to planning for retirement. More information is available at faithfi.com/movement. Movement Mortgage LLC supports equal housing opportunity, NMLS number 39179. For licensing information, visit nmlsconsumeraccess.org.
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Rob West: Helping you live as a faithful steward, this is Faith & Finance on American Family Radio. Hey, just 13 days remain—actually 14, so two weeks—for our campaign, our opportunity to work with Preborn to fund the—well, the word I'm looking for is ultrasounds. We're funding free ultrasounds with Preborn. We're looking for 1,500 of them. Now, if you've been listening to AFR for a while, you know and love Preborn and the incredible work that they do, providing free ultrasounds to moms considering an abortion, sharing the love of Jesus with them, and then if they choose life, following them, providing diapers and other resources for up to a couple of years. It's just an amazing ministry. And we have partnered with Preborn here at FaithFi for two months, which ends August 31st, to fund 1,500 free ultrasounds. And you know, when a mom sees her baby on ultrasound, more than 80% of the time she chooses life—it's just incredible. And every $28 funds one of these free ultrasounds, and we're not to our goal yet. I think we're going to get there, Lord willing, but we're going to need your help. So if you could take 1 or 5 or 10 of those ultrasounds, that'd be a blessing. Just go to faithfi.com/preborn. That's faith f-i dot com slash preborn. And you can jump on board with us today. We'll keep you updated between now and August 31st.
All right, before the break, we were talking to Godwin in Virginia. Godwin's got a condo, owes 100,000, he's saved up 60,000 beyond his emergency fund. We were talking about whether or not to prepay the mortgage. But Godwin, I know you had a follow-up question, sir. Go ahead.
Godwin: Yes, Rob. The next question is, my current variable interest rate is 7.25—7.25. And the 60,000, what would be the best way to invest it at this point, since it's still just sitting in a checking account?
Rob West: Yes. So your $100,000 mortgage is variable at 7 and a quarter?
Godwin: Yes, sir.
Rob West: Okay, yeah. So although, Lord willing, that'll start coming down over the next couple of years as interest rates come down, that's, you know, a high rate. And so I think that underscores even more this original question you had about "Should I prepay the mortgage?" Yeah, I think as long as we've got the fully funded emergency fund, as long as you're putting—I would say maybe 10%, maybe not any more than that—in a retirement plan, and as long as you don't have any, you know, expenses that are coming up real soon where you would have to borrow at an even higher interest rate, like if you had a car that was at the end of its life and you needed to borrow and it was going to be 9% or something, you know, then we'd want to set aside for that. But if you don't have any of those, I think this underscores even more, Godwin, why you'd want to do what you originally called about, and that is prepay this mortgage.
But for any money that you aren't going to prepay the mortgage with and you're going to hang on to, yeah, we want to get it working for you. And, you know, what we talked about at the top of the show was our good friends at AdelFi Christian Banking. They're the largest Christian banking option in the country. They're incredible to work with. Part of the profits—and they're a credit union, so, you know, "profits" is a relative term, but part of the profits go to fund Christian ministries doing work all over the globe in the name of Jesus. And their money market up to $100,000 is right now at 4%, which is a phenomenal interest rate for that balance. So I think that would probably be, you know, where I would send you. There's also up to a $400 bonus for FaithFi listeners when you open a new account. So if you want to go to faithfi.com/banking, that's faith f-i dot com slash banking. Even some of our team members here at FaithFi use AdelFi and love it, and I think that could be a great option for you.
Godwin: Okay. Sounds good. Great, thank you so much for all your advice.
Rob West: Well, thank you, Godwin. You're a blessing, my friend. Call anytime if I can help. Let's go to Alabama. Arthur, how can I help you?
Arthur: Well, hello, Brother Rob. How are you, sir?
Rob West: I'm doing well. Thanks for your call.
Arthur: God bless you. I've been a long-time listener, listening to Howard Dayton back in the day, also a little bit of Dan Celia, but I had questions about buying stock. And recently, Cash App on my app that I have started off where you can purchase stock on it. And so I did purchase some smaller stocks for $140, but I wanted your advice on who can we get in contact with about furthering, you know, our understanding of buying and purchasing stock.
Rob West: Ah, yes, sir. How much do you have—and first of all, thanks for your kind remarks about the program and Howard. By the way, be praying for Howard. He had a triple bypass last week, doing well, but if you know and love the ministry of Howard Dayton and you think about him, pray that the Lord would restore him to complete health.
In terms of the investments you'd like to do, Arthur, what do you have available on a monthly basis that you would want to put into some investments?
Arthur: Well, right now it is very small. I mean, like I say, I just recently, with the Cash App, purchased five smaller stocks with that total of $140, so that lets you know how small they were.
Rob West: Yeah, that's okay. We've got to start somewhere, and, you know, those small—what I'll call micro-deposits—are going to add up over time, and maybe you get to a place down the road where you can bump that up. Yeah, I think—you mentioned Cash App. I'd probably use one called Betterment, B-E-T-T-E-R-M-E-N-T, Betterment. It's a robo-advisor. I'd rather you not be buying individual stocks. I'd rather you be buying indexes through exchange-traded funds. So basically—I don't mean to throw a lot of terms at you—but essentially, an index allows you to buy the entire market, like the S&P 500 or, you know, the Russell 2000. So you're getting wide diversification, even with $140. You might own hundreds or thousands of companies by buying an index, and that's going to make sure that you're diversified and you're not putting all of your eggs in one basket. Betterment is one of the robo-advisors that's very easy to use. They have a great smartphone app, and every time you make a deposit of $50 or $25 or $100, it'll automatically reinvest it for you and put it into an appropriate mix of indexes that makes sense for your age and risk tolerance, and the way they're going to determine that is by asking you a series of questions when you first get started. But that would be the direction I would go.
Arthur: Thank you so much. I appreciate that. That sounds great.
Rob West: All right. Hey, Arthur, I'm going to send you a gift. I'm going to send you a book called The Sound Mind Investing Handbook. It was written by our friends at Sound Mind Investing, Austin Pryor, and I think it'll help introduce you to some of these terms and give you an overview of investing from a biblical perspective that'll be a blessing to you. I'm going to send it as our gift to you, my friend. So stay on the line, the team will get your information, and we'll put The Sound Mind Investing Handbook in the mail. Thanks for your call today.
Let's finish out today in Texas. Maria, go ahead.
Maria: Yes, you hear me?
Rob West: Yes, ma'am.
Maria: Okay. I gave the interviewer the summation of my questions. All right, I just retired, and I'm 70 years old. I still owe 11,000 on my house and about 11 to 12,000 on my car. My interest rate on my house is 5%, because I got it a long time ago, and the car, I brought it down, it's like 5 or 6% too, so the interest is not real high. And I have a $50,000 gold IRA, and I have about maybe 120 or so in my 401(k). But I'm trying to determine that I'm going to live on what I get from Social Security, so I'm not trying to count the 401(k) in my budget. And I wanted to tithe. My other question is, so I was going to estimate that I would still be tithing off of just what I get in Social Security, which is going to be—after they take out Medicare Part B, and then I have to get D—it's going to go from 2,000 probably to around 1,900. Okay, so that's my question. I want to keep tithing, and I've also heard that you should roll over your 403(b) from cash—the cash account, because part of that 403(b) I have a money market in there, part is in cash and part is in stocks. But the third part is gold. Okay, there I go.
Rob West: That's a lot there, but let me give you my thoughts, and we've got just a short amount of time. First of all, I think having 30% of your total retirement in gold is too much. At the end of the day, you need to make that call, but that's a significant concentration for someone in your stage of life—really for anyone. And the reason I'm saying 30% is, I'm saying if I'm taking 120 in your 401(k) and adding 50,000 from your gold IRA, you essentially have a total retirement asset of 170, and 50,000 is 30%. I would recommend no more than 10% personally.
I love the idea that you'd live on Social Security alone. It's really going to take you putting a retirement budget together to make sure you can do that. I'd be happy to provide one of our Certified Christian Financial Counselors to help you build that budget, because you're right. If you can leave the gold plus the 401(k) invested and maybe roll it over to an IRA and have an advisor manage it, I think you'd be in great shape. That could grow for the future, keep it invested in stocks—I'd have very little in the cash portion, maybe use bonds—but that would give you a nest egg that could continue to grow, and you wouldn't have to touch it because you'd live on the Social Security.
So I'm going to give you a couple of sessions free with a Certified Christian Financial Counselor, if you want it, to help you work on that budget. And then if you want to find an advisor to manage the gold portfolio—which I would reduce to only 20,000 at the most, not 50—and the 401(k) that you would roll to an IRA with bonds and stocks, you'd want to go to findacka.com to find a Certified Kingdom Advisor in your area. That's my best advice, Maria. All the best to you. Thanks for calling today.
That's going to do it for us today, folks. Big thanks to my team today: Devon, Patrick—grateful for Pat on our phones today—also Taylor Stanrich, our production manager, and everybody here at FaithFi that makes this possible. Don't forget, faithfi.com/preborn. Every $28 funds a free ultrasound. See you tomorrow.
Announcer: The views and opinions expressed in this broadcast may not necessarily reflect those of the American Family Association or American Family Radio.
Rob West: Credit card fees rarely wreck a budget all at once. Hi, I'm Rob West. From interest and late charges to annual fees and cash advances, the cost of using credit can add up quickly. Today, we'll look at how to avoid those costs and make sure the cards you use are serving your financial plan, not working against it. And then it's on to your calls at 800-525-7000. This is Faith & Finance on American Family Radio, biblical wisdom for your financial decisions.
Proverbs 21:20 says, "Precious treasure and oil are in a wise man's dwelling, but a foolish man devours it." That doesn't mean we hoard what God provides. It means wisdom pays attention. Good stewardship includes knowing where our money is going and refusing to let avoidable costs quietly consume resources God has entrusted to us.
So let's start with the biggest cost of credit cards: interest. Technically, interest isn't a fee, but for anyone carrying a balance, it's usually far more expensive than the fees we're about to discuss. According to the Federal Reserve, the average interest rate on credit card accounts being charged interest is currently just over 22%. At rates like that, reward points and cash-back offers lose their shine quickly.
The best practice is simple: don't charge what you can't pay off when the bill comes due. If you're already carrying a balance, consider putting the card away while you work on a plan to eliminate the debt.
Next are late fees. The amount varies by issuer, so review your card's terms and know your due date. Set up payment alerts or automatic payments. At minimum, automate the required payment so an overlooked date doesn't create another expense. Then, pay the full statement balance each month to avoid interest. Just make sure there's enough in checking when that payment hits. A returned payment can bring another fee, and possibly a bank fee as well. Keeping a small cushion in checking can help protect you.
Then there are annual fees. Some cards charge nothing. Others charge hundreds of dollars in exchange for travel benefits, rewards, and other perks. Generally, we'd encourage you to avoid cards with annual fees altogether. The rewards often don't justify the cost, and chasing points or cash back can tempt you to spend more than you otherwise would.
That's one reason we appreciate AdelFi Christian Banking. Formed through the merger of Christian Community Credit Union and AdelFi Credit Union, as America's number one biblical banking solution with 130 years of combined experience, they continue to provide purpose-driven financial solutions that empower you to live, give, and create lasting Kingdom impact.
Since 1995, AdelFi members' card activity has generated over $6.9 million for Christian causes. For responsible credit users, it's a great way to align financial tools with your values. You can learn more at faithfi.com/banking. That's faithfi.com/banking.
Also, be especially cautious with cash advances. They can come with an upfront fee, and interest often begins accruing right away. That's an expensive way to solve a cash flow problem. A better long-term solution is to build margin: a starter emergency fund first, then a larger reserve over time, so an unexpected expense doesn't force you to borrow at credit card rates.
Foreign transaction fees are another cost to watch if you travel internationally or make international purchases. Some cards charge a percentage of the transaction; others don't. Check before you travel so there are no surprises.
And finally, review your statement every month. Look for fees, subscriptions, or charges you don't recognize. That simple habit helps you stay engaged with your financial life.
Here's the larger principle: a credit card should be a tool, never a master. If using one consistently leads to interest, fees, or overspending, the wisest move may be to stop using it. There's no spiritual virtue in having a credit card, and there's no shame in using cash or debit if that helps you steward faithfully.
Faithfulness often shows up in small decisions—paying on time, avoiding unnecessary costs, living within God's provision, and directing more of what He has entrusted to us toward His purposes. So take a few minutes this week and review your credit cards. Know what they cost. Know why you have them. And make sure they're serving your plan, not quietly shaping it.
And if you're looking for a financial institution that shares your Christian values, consider our friends at AdelFi Christian Banking. FaithFi listeners can earn up to a $400 bonus when opening a qualifying high-yield checking or savings account, or a cash rewards Visa credit account. To learn more, just go to faithfi.com/banking and enter the code "FAITHFI". That's faithfi.com/banking and use the code "FAITHFI".
All right, your calls are next: 800-525-7000. We'll be right back.
David Wollen: For your walk with Jesus, I'm David Wollen with Haven Today, inviting you to anchor your day in God's Word. Hard doesn't always mean bad. Going through a time of suffering doesn't necessarily mean you've done something wrong. Remember Daniel? He wound up in a den of lions because he defied a law that would have required him to disobey God. Daniel 6:10 tells us, "He got down on his knees three times a day and prayed and gave thanks before his God, as he had done previously." Daniel did the right thing, and he suffered for it. But God not only saw him through it; He used this in an amazing way. And today, the same holds true. God doesn't always spare us from suffering, but He does promise to go through it with us. Get more daily encouragement for your walk with Jesus at haventoday.org.
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Announcer: We all have times of discouragement, but there is hope. Here's Pastor Jeff Schreve. Hey, I have good news for you. God is the God of encouragement, and God has a good word from His Word to encourage you, to lift you up, and to change your outlook. Learn the power of simply having a godly outlook. Join Pastor Jeff Schreve on From His Heart, each weeknight at 6 Central here on American Family Radio.
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Rob West: Thanks for joining us today on Faith & Finance on American Family Radio. I'm Rob West. Well, the lines are open; that means it's time for your phone calls: 800-525-7000. That's 800-525-7000. We'd love to be able to take your questions today, help you apply biblical wisdom to your financial decisions and choices, understanding that money is a tool—a good gift from a good God—for us to be used for our enjoyment, to provide for our families, but also to love our neighbor, and protect the vulnerable, and promote human flourishing through our investments, through our generosity. What a privilege it is to be able to take a portion of what God has entrusted to us and return it for Kingdom purposes. That's what happens when you and I give and invest in a way that aligns with the heart of God in Scripture.
And so we'd love to be able to tackle those questions today when you call right now: 800-525-7000. Whether it's questions around your spending, your saving, your giving, perhaps it's debt reduction, whatever it might be today, the number with lines open is 800-525-7000. Again, that's 800-525-7000. You can call right now.
Rob West: We'll head to those phones here in just a moment. In the news today, student loan debt is often associated with college graduates, but millions of parents are carrying education debt of their own. Parent PLUS loans allow parents of dependent undergraduate students to borrow from the federal government to cover the cost of college. EducationData.org reports that Parent PLUS loans account for about 6.7% of federal student loan debt, showing that the nation's education debt burden extends well beyond former students.
Federal data cited in recent analyses show that the scale of the problem was significant. Roughly 3.8 million Americans hold about $122 billion in outstanding Parent PLUS loans. That works out to nearly $30,000 in debt per borrower on average, although individual balances, of course, vary widely.
Now, for many families, the loans were taken out to close the gap between financial aid, student borrowing, and the full cost of attendance. Unlike loans issued directly to students, Parent PLUS debt is legally the parents' responsibility to repay. The figures highlight how paying for college can affect household finances across generations. And as policymakers continue debating the cost of higher education and student debt, Parent PLUS borrowers remain an important part of the conversation with billions of dollars in repayment obligations tied to their children's education.
Something to keep an eye on. There's obviously a lot of changes going down right now in this whole area of student loans and student borrowing as we have new legislation coming in that's really changing the game with regard to those income-driven repayment options, access to the federal loan forgiveness program, but also just the accessibility of these funds which have been, you know, so widely available at almost unlimited amounts. It has been a key source of the rapid college tuition inflation we've seen, well outpacing even our own higher-than-average inflation just across the board with core goods and services.
And I think it's in large part due to the fact that there's just a seemingly unlimited amount of money, or there has been, available to borrow for college. And so it allows these schools to continue to push these prices up. I think the right-sizing of this program is going to bring, you know, perhaps some changes there, not to mention this demographics cliff we're facing where there are far less students now, which is putting even more pressure on these universities. And we're seeing a lot of the smaller universities close. There's a lot of changes being considered with regard to how students coming out of high school prepare themselves for their careers, thinking about trade schools and even other lower-cost options, some foregoing college altogether.
So, an interesting time, but this whole change in kind of how we look at and view college debt certainly is one that needs to be considered. Here's what I would say: don't miss the opportunity to find other ways to pay for college. You know, taking those AP and dual-enrollment courses in high school can be a huge blessing. I mean, all three of—all four of mine, really—that have been, you know, some now through college, one in college, I've got two in high school—that was a major focus for them is being in those dual-enrollment and AP classes. I think every one of my kids will have at least 12 to 14 of those coming out of high school. Here's what that does: it allows them to take some of those courses before they get to college, which they get credit for. It also makes them, you know, higher-quality applicants because they show rigor. But also, when they get to college, they don't have to take as many credits. You know, my oldest just graduated after two and a half years because he brought so many credits with him. That just saves on the cost of college overall.
So that's one thing. The second is, you know, maybe they're working in high school part-time, maybe they're working on campus with a part-time job. Maybe if they need to focus on their studies, they find something that's a little more conducive to their schedule. My junior and senior year, I was an RA, a resident assistant, so that covered my room and board, and I just was able to fold it into my normal rhythms. And even though I had maybe some office hours once a few hours a week, you know, I was able to, you know, be invested in the lives of the students on my hall and get a major portion of college covered, room and board, just by being a resident assistant. That's the kind of, I think, creative ways that you can pay for college without just automatically defaulting to borrowing just incredible sums of money.
I think another filter we need to look at this through is just this idea that, you know, whatever we borrow—and again, it's a last resort; let's look for every other way, including scholarships and grants, which is just a major source that you may not be looking at. It's not just what the school offers; look in your community. You know, for instance, here in Georgia, the power company offers a $5,000 scholarship that very few people end up applying for; same with Alabama Power in our neighboring state. So don't miss those local scholarships that you can apply for, not to mention the grants.
But I think in terms of a rule of thumb or a filter to determine how much to borrow, think about: how much could I borrow that, based on my career path, what I'm pursuing—and I realize you may not know that until you get a little further in—but I need to have a reasonable expectation, based on the first 10 years of salaries in that field, that I could pay this back in a decade, 10 years or less? And if I can't, I'm borrowing too much money. I think that's just at least a general rule of thumb we ought to consider as we look at this.
All right, we're ready to dive into your questions. It's back-to-school season, so as you might imagine, my sophomore at the University of Georgia starts class today, and so I've got college on my mind.
800-525-7000 is the number to call. We'd love to hear from you. The lines are filling up, but still a few open at the moment. Let me dive in.
Rob West: We're going to begin in Texas today. Jim, go right ahead.
Jim: Yes. My mother just passed. She was 95 years old. She had a great life. And we're dealing with the estate. My father had passed in 2021, and he was 92. And so we're dealing with the estate, and my sister's the executrix. She lives in Mississippi where my parents lived. And so she says he has an IRA, and it's got about $190,000 in it. And I just didn't know you could have money in it in your 90s. I was thinking you had to distribute it by like 20 years or something. So...
Rob West: Good question. Yep, I got that. Let's do this: I'm up against a break here, Jim, but I'll give you my thoughts right on the other side. Stay right there; we'll be right back
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Rob West: Great to have you with us today on Faith & Finance here on American Family Radio. I'm Rob West. The lines are filling up, still room for two more calls: 800-525-7000. Before the break, we were talking to Jim in Texas. His mom and dad passed away—his mom passed recently in her early 90s, his dad passed back in 1991. He had an IRA, it was not retitled in his mom's name, she was the beneficiary, his sister's the executrix of the estate. They have been taking required minimum distributions, and he's just wondering how it's possible there's still $190,000 in this account and whether something was done improperly.
You know, it could be completely legitimate. Because your dad passed in '91, the key idea here is that the IRA rules have changed recently based on the SECURE Act. So back when your dad passed away, it doesn't retroactively apply to your mom's passing. So for deaths before 2020, the applicable rules depended on things such as whether your dad had already reached his required beginning date, who he named as the beneficiary, and how the inherited IRA was handled after death. But if your mom was your dad's beneficiary, and the account was properly maintained as an inherited IRA with distributions being taken under the applicable life expectancy rules, there's nothing suspicious at all about it still having $190,000 left. The RMD just means required minimum, not that the account necessarily has to shrink every year. If the investments earned more than or close to what was withdrawn, a substantial balance could remain decades later.
So I think the only question is this idea that it stayed in your dad's name. That needs clarification. If the custodian was treating it as an inherited IRA for your mom, even though your dad's name remained on the account title, that's normal. But if it literally remained an IRA owned by a deceased person for 35 years and the distributions weren't being calculated under the correct beneficiary rules, that could be an issue. But I think just the fact that it's got the $190,000 in it, Jim, is not necessarily problematic.
Jim: Okay. Just one question. So you don't have a set amount of time that all of the money has to be out of the IRA, like when you're—it's not 20 years after 70 or 73 or whatever? You just take minimum distributions for your whole life?
Rob West: That's right. So, yeah, if you were the one that set up the IRA, you just have to take the required minimums, and depending on how the investments perform, you may not drain it. What you may be thinking of, though, is that the newer rules say that, for instance, there's a new 10-year rule that applies to beneficiaries when the IRA owner dies after 2020. And if it was not a spouse, then it has to be completely drained within 10 years. So that may be what you're referring to. But if it's your IRA, you set it up, or it was passed to a spouse, often they're not drained because if you're just taking the required minimum and keeping it invested, you could be outpacing the required minimums with your investment performance.
Jim: Okay, perfect. Thank you for that information.
Rob West: Absolutely, Jim. Hey, call anytime. 800-525-7000. All the lines full; we're going to get to as many calls as we can today. Out to Texas. Hey, Paul, go ahead.
Paul: Yes. Hi. Since you're in the area—this is not actually your specific thing, but maybe if you know—when I use a credit card that's got points, some of them are, you know, the rotating category ones, you get like even 5% back. My question is, when they have these programs, 2%, 5%, whatever, when I, like, go to a restaurant and use that card, are they charging extra fees to the merchant? And the reason I ask is just a sense of fairness. It's like if the big mega-bank wants to throw me some extra cash, that's one thing, but if they're taking that out of the hide of the merchant, then I'd just prefer to, you know, use a regular credit card.
Rob West: Yeah, good question. I would say yes, but not directly. It's really indirectly, and here's how: the merchant doesn't pay for your points directly; they pay card acceptance and processing fees. Now, where could they in part or indirectly be paying for these premium rewards cards? Well, the premium rewards cards often carry higher interchange costs than some of the basic cards. So the merchant's actual cost depends on its processor and pricing arrangement. And so, therefore, some of these premium rewards cards, you know, the issuer may charge higher fees or take a larger percentage from the merchant to in part offset it. But it's not a one-for-one in the sense that it's being billed back directly to the rewards that you're receiving, if that makes sense.
Paul: Yes, thank you.
Rob West: Yeah. So rewards are, you know, funded out of the general economics of these cards, which includes the processing fee, which includes the interchange costs, but also, of course, includes interest and certain fees like annual fees—which is why a lot of times the cards that have the more rich benefits will charge an annual fee, the idea being that, you know, you're getting far more benefits than the annual fee. Which is why largely business owners will pay these big annual fees, like for instance, Amex Platinum. I mean, you get, you know, access to the airline clubs, and you get premium, you know, status with, you know, hotels and rental car companies, but you're paying $350 a year for it. Well, most business owners are putting that in as a business expense, writing it off, and then enjoying all the benefits that come with it. But at the end of the day, you kind of have to put it all together, and, you know, in part, those fees do support that rewards ecosystem.
Hey, Paul, we appreciate your call. Yes, sir, call anytime.
Rob West: Let's go to North Carolina. Hi, Terry, go ahead.
Terry: Good afternoon, sir. Just kudos. I just wanted to call and give you a praise. We thank you for what you're doing. I've been a long-time listener to you and Dan Celia both. Matter of fact, I started my recovery, as I'm going to call it, for my financial mishaps with him. I was one of them—I'm hoping I can provide a little bit of encouragement to anybody else that might have been in my shoes. When I started listening to Dan, I was over $200,000 in debt between four car payments, credit loans, and everything else, not including the mortgage.
Rob West: Wow. Hey, I want to hear the rest of that story, Terry, if you don't mind sharing it, but I want to give you plenty of time to share it, and I'm up against a break. Stay right there. We'll pick it up on the other side. We'll be right back.
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Rob West: This is Faith & Finance on American Family Radio. I'm Rob West. Our goal each day to encourage you, to equip you to live as a faithful steward, to take you back to God's word to uncover the truths we find in Scripture about how we're to manage God's money, God's way. Before the break, we were talking to Terry in North Carolina. Terry's been listening a long time going all the way back to Dan Celia. Dan was a big influence in his life, and Terry, appreciate your kind remarks about the program that we do today. Had so much respect for Dan. Didn't know him personally, but I've talked to enough listeners to know the incredible impact that he still has to this day, even though he's with Jesus because of his timeless biblical wisdom. But Terry, take us back. I know you were in a really desperate place financially when you started listening to Dan. I'd love for our listeners to hear that story.
Terry: Uh yes, sir. Definitely. It was like I said, I was well over $200,000 in debt between four auto loans and personal loans and credit cards and everything else. And, you know, I kept praying, "Lord, let me buy that lottery ticket and get out of this debt. I won't never get in it again." But...
Rob West: Yeah.
Terry: I kept listening to Dan and what he was saying. And I kept praying about it. And the Lord didn't make it easy on me, but uh He brought me through the struggle and stuck with me. And with Dan's program, I one bill at a time, I took my smallest bill, I took everything extra I had in that month and I put it at that smallest bill. Well, when that bill got paid off, it's like I could catch my breath. And everything I was paying on that bill, I went to the next bill. And I kept paying, I just kept doing every one of them until all my bills, all my credit cards, all the vehicles, and everything was paid off except for my mortgage. And I done that within three years. And like I said, that was well over $200,000 worth of debt that I cleared out just by listening to Dan and doing what he said to do. I didn't talk to him on the phone, it's just by listening to his program. That's all I done. And then, like I said, it wasn't but about four more years later I had my mortgage paid off. And people would be surprised at how much money you can start putting up and putting away once you start paying bills off that you ain't got to pay every month. And how much you can help other people out there that are struggling that just need a little extra hand. Pay a lot bill or buy their groceries or something similar to that. And, you know, it's it's all God's doing and God's will, and I give Him the praise and glory for it. And I give Dan the praise and glory, and I give you the praise and glory for what you're continuing to do.
Rob West: Wow. Well, thank you for sharing that. A couple of things I want to just put a spotlight on that you just said. First of all, you give testimony to God's faithfulness and to Dan's willingness to speak truth from God's Word on a daily basis. Thank you for that. I think number two is you highlighted the power of something we call the snowball method, which is uh just so effective where, you know, you take one bill at a time, in this case a credit card, but you went well beyond that, and you pay everything, you keep it current, but you live lean, you, you know, live well within your means, modestly, and try to free up as much margin as you can on a monthly basis, and you attack the smallest balance because a couple of months later you get that win by paying it off, you get to rip it up, throw it in the trash, and then you move to the next one, and then you move to the next one. And that concentrated focus on one bill at a time with the the progress that you make along the way is what gives you the motivation to keep going. And, you know, you you were tapping into a really powerful idea there, Terry. I love that you continued giving along the way, and I love that you're giving the credit to the Lord, which is where it belongs. You know, Deuteronomy 8:18, even the ability to produce wealth comes from God. It's not just all His, even our ability to actually earn anything comes from the ingenuity God's given us, and the minds, and the skills, and the abilities, and the breath in our lungs, it all comes from Him. And so we give credit where credit is due to God, but He used you as a faithful steward, Terry, and now I guarantee you that encouragement you just shared today is what somebody else needed to hear that's where you were with a couple hundred thousand dollars worth of debt. So uh God bless you, my friend, and thank you for sharing with us today.
Terry: Thank you, sir, and you have a blessed one. And, you know, like I said like you said, I just give all the credit and glory to God and like I said, He put that distaste in my mouth for debt. I do not get into debt today because of it.
Rob West: I love it. I love that, "the distaste for debt." Let's uh let that sink in to you today. Hey, uh Terry, stay on the line. I'm going to have the team send you a copy of my devotional, Our Ultimate Treasure. I'd love for you to spend the next three weeks, you know, as you first wake up, just letting God's Word wash over you. I think it'll be an encouragement to you, and we'll get it out as our gift today. Again, it's called Our Ultimate Treasure, and we'll put it in the mail to you. Lord bless you, my friend. Thanks for being on the program. Call anytime.
Rob West: Let's go to Virginia. Hi, Godwin. How can I help?
Godwin: Um thank thank you for taking my call. Um I owe about 100,000 on my mortgage, and I've saved up to 60k. And uh I can put down towards the payment, can use as a, you know, towards the payment to reduce the principal. Would that be the prudent thing to do? I do have uh some um emergency fund saved up to 13k as well.
Rob West: Yeah. Yeah, the the only thing, although I love the idea of you prepaying the mortgage and trying to get that balance down so you can get to uh being debt-free sooner, I I just want you to be careful because we could inadvertently become too illiquid, meaning you don't have enough in the way of liquid reserves, because as soon as you put that against the house, it becomes very illiquid, meaning you can't get to it. And if you have a $100,000 mortgage and you put 60,000 on it, you still owe 40, your monthly payment isn't going to change unless you refinance, and you probably don't want to do that at this point. It would reset the amortization, there'd be a lot of expense to it. And so you could be in a situation where, yes, your balance is now 40 instead of 100, but you still have the same monthly payment, and now you don't have the reserves that you had. And so I think the question we need to start with is, how much is an appropriate amount of reserves for you to have enough for the unexpected? How much do you have in emergency savings not counting the 60,000?
Godwin: I do have 13k.
Rob West: Uh how much?
Godwin: One and 13. One, three k, 1000, uh 13,000.
Rob West: Okay, so $13,000 in emergency savings?
Godwin: Right.
Rob West: Okay, very good. And how much do you typically spend, how much are all of your expenses in one month, typically?
Godwin: Um generally it would be um about uh 2,500.
Rob West: Okay, let's round up and say 3,000. I would love for you to have at least 18 to 20,000 in emergency savings. And so you're at 13 uh not counting the 60, so I'd take seven at a minimum, seven from the 60, add it to the 13, let's get up to 20,000, okay? Now, we'll call that your emergency fund. All right, well now you still got 53,000 left. Are you contributing to a retirement plan at work?
Godwin: I do.
Rob West: Okay. What percent of your income are you putting in, do you know?
Godwin: Not very much. Uh put like about five percent.
Rob West: Okay. I'd love for you to try to get that up to somewhere between 10 and 15%. And if that left you where you didn't have enough to pay all of your bills because it was taking too much out of your check, one thing we could do is start supplementing the additional amount you're putting into retirement from your salary deferral because you increase the percentage, you know, up to 10 or 15%, and start pulling that same amount that you're now adding additionally to your retirement, pull that from the 53,000 that remains to cover your bills. And essentially what you'd be doing is pulling a little bit out of that savings, which is after-tax money, and putting it in a tax-deferred environment. So that would be one way to go. Apart from that, if you didn't have any other short-term savings goals, like you're going to need to replace a car or you have another expense that is known coming up, then I love the idea of you prepaying the mortgage, but I want to make sure your retirement savings is at the right level, 10 to 15%, you've got at least 18 to 20,000 in emergency savings, and your other short-term savings goals are funded. Then let's prepay the mortgage. We'll be right back.
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Rob West: Helping you live as a faithful steward, this is Faith & Finance on American Family Radio. Hey, just 13 days remain—actually 14, so two weeks—for our campaign, our opportunity to work with Preborn to fund the—well, the word I'm looking for is ultrasounds. We're funding free ultrasounds with Preborn. We're looking for 1,500 of them. Now, if you've been listening to AFR for a while, you know and love Preborn and the incredible work that they do, providing free ultrasounds to moms considering an abortion, sharing the love of Jesus with them, and then if they choose life, following them, providing diapers and other resources for up to a couple of years. It's just an amazing ministry. And we have partnered with Preborn here at FaithFi for two months, which ends August 31st, to fund 1,500 free ultrasounds. And you know, when a mom sees her baby on ultrasound, more than 80% of the time she chooses life—it's just incredible. And every $28 funds one of these free ultrasounds, and we're not to our goal yet. I think we're going to get there, Lord willing, but we're going to need your help. So if you could take 1 or 5 or 10 of those ultrasounds, that'd be a blessing. Just go to faithfi.com/preborn. That's faith f-i dot com slash preborn. And you can jump on board with us today. We'll keep you updated between now and August 31st.
All right, before the break, we were talking to Godwin in Virginia. Godwin's got a condo, owes 100,000, he's saved up 60,000 beyond his emergency fund. We were talking about whether or not to prepay the mortgage. But Godwin, I know you had a follow-up question, sir. Go ahead.
Godwin: Yes, Rob. The next question is, my current variable interest rate is 7.25—7.25. And the 60,000, what would be the best way to invest it at this point, since it's still just sitting in a checking account?
Rob West: Yes. So your $100,000 mortgage is variable at 7 and a quarter?
Godwin: Yes, sir.
Rob West: Okay, yeah. So although, Lord willing, that'll start coming down over the next couple of years as interest rates come down, that's, you know, a high rate. And so I think that underscores even more this original question you had about "Should I prepay the mortgage?" Yeah, I think as long as we've got the fully funded emergency fund, as long as you're putting—I would say maybe 10%, maybe not any more than that—in a retirement plan, and as long as you don't have any, you know, expenses that are coming up real soon where you would have to borrow at an even higher interest rate, like if you had a car that was at the end of its life and you needed to borrow and it was going to be 9% or something, you know, then we'd want to set aside for that. But if you don't have any of those, I think this underscores even more, Godwin, why you'd want to do what you originally called about, and that is prepay this mortgage.
But for any money that you aren't going to prepay the mortgage with and you're going to hang on to, yeah, we want to get it working for you. And, you know, what we talked about at the top of the show was our good friends at AdelFi Christian Banking. They're the largest Christian banking option in the country. They're incredible to work with. Part of the profits—and they're a credit union, so, you know, "profits" is a relative term, but part of the profits go to fund Christian ministries doing work all over the globe in the name of Jesus. And their money market up to $100,000 is right now at 4%, which is a phenomenal interest rate for that balance. So I think that would probably be, you know, where I would send you. There's also up to a $400 bonus for FaithFi listeners when you open a new account. So if you want to go to faithfi.com/banking, that's faith f-i dot com slash banking. Even some of our team members here at FaithFi use AdelFi and love it, and I think that could be a great option for you.
Godwin: Okay. Sounds good. Great, thank you so much for all your advice.
Rob West: Well, thank you, Godwin. You're a blessing, my friend. Call anytime if I can help. Let's go to Alabama. Arthur, how can I help you?
Arthur: Well, hello, Brother Rob. How are you, sir?
Rob West: I'm doing well. Thanks for your call.
Arthur: God bless you. I've been a long-time listener, listening to Howard Dayton back in the day, also a little bit of Dan Celia, but I had questions about buying stock. And recently, Cash App on my app that I have started off where you can purchase stock on it. And so I did purchase some smaller stocks for $140, but I wanted your advice on who can we get in contact with about furthering, you know, our understanding of buying and purchasing stock.
Rob West: Ah, yes, sir. How much do you have—and first of all, thanks for your kind remarks about the program and Howard. By the way, be praying for Howard. He had a triple bypass last week, doing well, but if you know and love the ministry of Howard Dayton and you think about him, pray that the Lord would restore him to complete health.
In terms of the investments you'd like to do, Arthur, what do you have available on a monthly basis that you would want to put into some investments?
Arthur: Well, right now it is very small. I mean, like I say, I just recently, with the Cash App, purchased five smaller stocks with that total of $140, so that lets you know how small they were.
Rob West: Yeah, that's okay. We've got to start somewhere, and, you know, those small—what I'll call micro-deposits—are going to add up over time, and maybe you get to a place down the road where you can bump that up. Yeah, I think—you mentioned Cash App. I'd probably use one called Betterment, B-E-T-T-E-R-M-E-N-T, Betterment. It's a robo-advisor. I'd rather you not be buying individual stocks. I'd rather you be buying indexes through exchange-traded funds. So basically—I don't mean to throw a lot of terms at you—but essentially, an index allows you to buy the entire market, like the S&P 500 or, you know, the Russell 2000. So you're getting wide diversification, even with $140. You might own hundreds or thousands of companies by buying an index, and that's going to make sure that you're diversified and you're not putting all of your eggs in one basket. Betterment is one of the robo-advisors that's very easy to use. They have a great smartphone app, and every time you make a deposit of $50 or $25 or $100, it'll automatically reinvest it for you and put it into an appropriate mix of indexes that makes sense for your age and risk tolerance, and the way they're going to determine that is by asking you a series of questions when you first get started. But that would be the direction I would go.
Arthur: Thank you so much. I appreciate that. That sounds great.
Rob West: All right. Hey, Arthur, I'm going to send you a gift. I'm going to send you a book called The Sound Mind Investing Handbook. It was written by our friends at Sound Mind Investing, Austin Pryor, and I think it'll help introduce you to some of these terms and give you an overview of investing from a biblical perspective that'll be a blessing to you. I'm going to send it as our gift to you, my friend. So stay on the line, the team will get your information, and we'll put The Sound Mind Investing Handbook in the mail. Thanks for your call today.
Let's finish out today in Texas. Maria, go ahead.
Maria: Yes, you hear me?
Rob West: Yes, ma'am.
Maria: Okay. I gave the interviewer the summation of my questions. All right, I just retired, and I'm 70 years old. I still owe 11,000 on my house and about 11 to 12,000 on my car. My interest rate on my house is 5%, because I got it a long time ago, and the car, I brought it down, it's like 5 or 6% too, so the interest is not real high. And I have a $50,000 gold IRA, and I have about maybe 120 or so in my 401(k). But I'm trying to determine that I'm going to live on what I get from Social Security, so I'm not trying to count the 401(k) in my budget. And I wanted to tithe. My other question is, so I was going to estimate that I would still be tithing off of just what I get in Social Security, which is going to be—after they take out Medicare Part B, and then I have to get D—it's going to go from 2,000 probably to around 1,900. Okay, so that's my question. I want to keep tithing, and I've also heard that you should roll over your 403(b) from cash—the cash account, because part of that 403(b) I have a money market in there, part is in cash and part is in stocks. But the third part is gold. Okay, there I go.
Rob West: That's a lot there, but let me give you my thoughts, and we've got just a short amount of time. First of all, I think having 30% of your total retirement in gold is too much. At the end of the day, you need to make that call, but that's a significant concentration for someone in your stage of life—really for anyone. And the reason I'm saying 30% is, I'm saying if I'm taking 120 in your 401(k) and adding 50,000 from your gold IRA, you essentially have a total retirement asset of 170, and 50,000 is 30%. I would recommend no more than 10% personally.
I love the idea that you'd live on Social Security alone. It's really going to take you putting a retirement budget together to make sure you can do that. I'd be happy to provide one of our Certified Christian Financial Counselors to help you build that budget, because you're right. If you can leave the gold plus the 401(k) invested and maybe roll it over to an IRA and have an advisor manage it, I think you'd be in great shape. That could grow for the future, keep it invested in stocks—I'd have very little in the cash portion, maybe use bonds—but that would give you a nest egg that could continue to grow, and you wouldn't have to touch it because you'd live on the Social Security.
So I'm going to give you a couple of sessions free with a Certified Christian Financial Counselor, if you want it, to help you work on that budget. And then if you want to find an advisor to manage the gold portfolio—which I would reduce to only 20,000 at the most, not 50—and the 401(k) that you would roll to an IRA with bonds and stocks, you'd want to go to findacka.com to find a Certified Kingdom Advisor in your area. That's my best advice, Maria. All the best to you. Thanks for calling today.
That's going to do it for us today, folks. Big thanks to my team today: Devon, Patrick—grateful for Pat on our phones today—also Taylor Stanrich, our production manager, and everybody here at FaithFi that makes this possible. Don't forget, faithfi.com/preborn. Every $28 funds a free ultrasound. See you tomorrow.
Announcer: The views and opinions expressed in this broadcast may not necessarily reflect those of the American Family Association or American Family Radio.
Credit card fees rarely wreck a budget all at once. From interest and late charges to annual fees and cash advances, the cost of using credit can add up quickly. On this Faith & Finance on AFR, Rob West looks at how to avoid those costs—and make sure the cards you use truly boost your financial plan, rather than work against it. Then, it’s on to calls.
(00:00) Rob West gives advice on avoiding credit card fees
(09:52) In the News: Student loan debt being carried by parents / planning to pay for college
(16:27) Caller Jim: Estate of deceased parents, including an IRA
(20:45) Continue call with Jim regarding his deceased father’s IRA
(24:16) Caller Paul: Who pays for the rewards when using a rewards credit card, merchant or credit card company
(27:12) Caller Terry: Thank you and testimony about getting out of debt
(31:31) Continue call with Terry and his testimony of getting out of debt
(36:06) Caller Godwin: Is it wise to use savings to pay down mortgage
(43:45) Continue conversation with Godwin on managing his savings and mortgage
(46:31) Caller Arthur: Investing advice, investing small amounts via apps
(50:00) Caller Maria: Managing investments in retirement
Credit card fees rarely wreck a budget all at once. From interest and late charges to annual fees and cash advances, the cost of using credit can add up quickly. On this Faith & Finance on AFR, Rob West looks at how to avoid those costs—and make sure the cards you use truly boost your financial plan, rather than work against it. Then, it’s on to calls.
(00:00) Rob West gives advice on avoiding credit card fees
(09:52) In the News: Student loan debt being carried by parents / planning to pay for college
(16:27) Caller Jim: Estate of deceased parents, including an IRA
(20:45) Continue call with Jim regarding his deceased father’s IRA
(24:16) Caller Paul: Who pays for the rewards when using a rewards credit card, merchant or credit card company
(27:12) Caller Terry: Thank you and testimony about getting out of debt
(31:31) Continue call with Terry and his testimony of getting out of debt
(36:06) Caller Godwin: Is it wise to use savings to pay down mortgage
(43:45) Continue conversation with Godwin on managing his savings and mortgage
(46:31) Caller Arthur: Investing advice, investing small amounts via apps
(50:00) Caller Maria: Managing investments in retirement
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