The longer you do something the more it becomes ingrained as a habit. That’s not necessarily a bad thing. Establishing good habits early in life will be a blessing for years to come. It’s never too early to establish wise habits for managing money, especially if you’re a teenager. Today, I’ll give you five of them and by the way, they’re great habits to start anytime in life. Then it’s your calls at 800-525-7000. It’s always important to know where your money is going and you can’t do that unless you track it. If you haven’t done it already, download and start using the new MoneyWise app. It helps you establish a budget based on the envelope system and allows you to monitor all of your transactions. Our next good money habit for teens is get a budget buddy. That way you can rein in each other’s impulse-spending. You can challenge each other to stay on budget and look for ways to save money. Another good habit for teens is pay yourself first. When you get money as a birthday or Christmas present or a paycheck from a part time job get into the habit of saving a certain percentage of it. And while you’re establishing the saving habit you can do the same for giving. Understand that God owns everything and He’s your ultimate provider. He directs every penny that comes your way. The 4th good money habit for teens is building a good credit rating. You might want to ask your parents to set up a secured credit card for you. With a secured credit card you deposit a certain amount into that account and then you can make small, budgeted purchases and pay them off in full each month. As you do that you’ll start to establish a good credit history and score. The fifth and final good habit for teens is to study how to manage money wisely. Learning how the financial world works will pay huge dividends. There is no better way to do that than by studying God’s Word. The Bible has more than 2300 verses related to the wise use of money and possessions. As you study Scripture be on the lookout for them and consider how they apply to your life. Proverbs and Jesus’ parables are particularly rich in God’s financial principles. But then you should spend time learning about the nuts and bolts of managing money wisely. Educate yourself about credit scores, avoiding debt, and the best ways to save for college and yes, even retirement. Those things might seem far off right now, but they’ll become very important before you know it. Here are a couple of questions we answered from our callers on today’s program: --Is there a penalty for not drawing out of a 401K before age 70? --I have 25K in savings, my husband is retired and I am still working. I will receive half of his pension, but my work offers a 401K, should I put the 25K in that? --My mother receives my dad’s pension, this is the only income she makes. Do I need to file taxes on this? --What is credit amnesty? --I have cosigned a student loan for my grandson. I am hoping to pay outright for my new residence, but if I can’t, will this student loan get in the way of a good loan for my home? Ask your questions at (800) 525-7000 or email them to [email protected] Visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, purchase books, and even download free, helpful resources like the MoneyWise app. Like and Follow us on Facebook at MoneyWise Media for videos and the very latest discussion! Remember that it’s your prayerful and financial support that keeps MoneyWise on the air. Help us continue this outreach by clicking the Donate tab at the top of the page.
We all have our favorite things in life, things that bring us joy, meaning and fulfillment. Sometimes it’s nice to make a list of our favorites, as this helps us recognize and appreciate them even more. We could make lists for many different things, favorite Bible verses, for example. Rob West recently made a list of his favorite financial things. That’s today on MoneyWise. First on the list of favorite financial things involves your emergency fund. Where’s the best place to keep it? We talk about this a lot and how higher yield savings rates are found at online banks, not the brick-and-mortar types. Within that category are three favorites: Ally, Marcus, and Capital One 360. All of these are FDIC insured, currently offering around 0.5% on savings. Of those, Marcus may top the list. There you’ll find no fees or minimum deposit, linking to other banks for same-day transfers and a U.S.-based contact center to your answer questions. I also love their app. My next favorite financial thing is the teen checking account. These teach our kids to manage their money wisely, remembering Proverbs 22:6, "Train up a child in the way he should go; even when he is old, he will not depart from it." Here, Rob West recommends a Capital One teen checking account. It has no fees or minimum balance, it offers a debit card for teens with parental locking and unlocking, and it has a mobile app that allows you to easily transfer birthday and allowance money into the account. You might be surprised that a credit card is on the list of favorite financial things! But keep in mind that any advice given about credit cards always includes the warning to pay off the balance in full every month. Otherwise, the interest you pay will easily wipe out any rewards you receive. Rob’s favorite credit card is the Fidelity Rewards Visa Signature Card. It has no annual fee and it gives you an unusual 2% on every purchase. However, you have to sign up to automatically deposit your cash back into one or more Fidelity accounts, such as a Fidelity 529 plan to save for college, a Roth or traditional IRA or an HSA. So, you don’t get to spend the 2% cash you get back it has to go into savings, which is a smart idea. Ron Blue often says that you can’t make money by spending it. But this may be the only exception. Digital envelope budgeting systems. Our favorite is, of course, the MoneyWise app, which is free. It’s based on the old school, tried and true, paper envelope system, only it’s digital. Your envelope balances carry over month to month and you can only use the money in your accounts to fund those envelopes, so, you stay on budget. Check out higher yield savings rates at Ally, Marcus and Capital One 360. For teen checking, see Capital One. Also, turn your cash back rewards into long term savings with the Fidelity Rewards Visa Signature Card. On today’s program we also answer your questions: --We’re in the process of selling our house and will use that money to get another house, using cash, enabling us to have no more house payment. Are there downsides to this? --We are at the tail end of our careers. We have a 401(k) and my husband plans to keep working until he’s 66. We have some life insurance policies that I believe are no longer needed. If we cash out those life insurance policies, do we have to pay taxes on it? Also, is it better to keep that liquid? Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to [email protected] Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, purchase books, and even download free, helpful resources like the free MoneyWise app. Like and Follow us on Facebook at MoneyWise Media for videos and the very latest discussion! Remember that it’s your prayerful and financial support that keeps MoneyWise on the air. Help us continue this outreach by clicking the Donate tab on our website or in our app.
We all like to see our portfolios grow but do you know how your investments make money? Not just the rise of stock prices, but how the actual companies whose stock you own do business? The fact is many companies are involved in ungodly practices from pornography to fetal tissue research. Today, Jason Myhre of Eventide explains three ways to approach this problem. Eventide is an investment company that’s all about faith-based investing and a financial underwriter of this program. Our guest, Jason Myhre spends his time teaching folks the importance of faith and values when we invest. Then it’s your calls at 800-525-7000. A quote from author Philip Yancy explains what faith has to do with our finances: The Bible asks three main questions about money: 1) How did you get it? (Righteously and justly, or exploitatively?); 2) What are you doing with it? (Indulging in needless luxuries or helping the needy?); and 3) What is it doing to you? Some of Jesus’ most trenchant parables and sayings go straight to the heart of that last question. Most of us, if we’re honest, don’t have a great level of knowledge about our investments. We just invested in some mutual fund in our IRA or 401K, and we’re thinking about retirement, or some future goal, and not really thinking about what companies we own or what things we’re profiting from. Most investment managers are just looking for profitable companies. This is a classic setup for having our investments out of sync with our values. Faith-Based Investment managers are seeking to generate attractive returns for investors. But, they’re also paying attention to the sources of the returns seeking to provide Christian investors with the pride in knowing their money is not just with profitable companies, but companies whose returns flow from activities that harmonize well with our faith values and commitments. There are three dimensions to Faith-Based Investing. The first dimension is called Avoid. This means that Faith-Based Investing helps Christian investors to Avoid some of the common problem areas that we can come into in investing. The second direction is called Embrace. And it’s about seeking out and positively Embracing companies whose products and activities we believe are well-aligned with God’s heart and his desires for work and business. The third is called Engage. This Engage dimension means engaging with the companies we own to help them improve even more. Learn more about Eventide and Faith-Based Investing at investEventide.com. Here are a couple of questions we answered from our callers on today’s program: --My husband and I are in our early sixties and have adult children. We still need to help them financially sometimes. One of the children is demanding everything to be equal. What are your opinions on this? Ask your questions at (800) 525-7000 or email them to [email protected] Visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, purchase books, and even download free, helpful resources like the MoneyWise app. Like and Follow us on Facebook at MoneyWise Media for videos and the very latest discussion! Remember that it’s your prayerful and financial support that keeps MoneyWise on the air. Help us continue this outreach by clicking the Donate tab at the top of the page.
There’s nothing funny about making mistakes when they affect your finances. Well, if financial mistakes are the enemy, knowing your enemy is the first step in defeating it. Rob West has a list of those blunders - so you can avoid them. And how do we do that? Well, certainly you want to learn from your mistakes so that you don’t repeat them. And the first step is admitting them. The second step is knowing that God forgives all of our mistakes including those with money. 1 John 1:9 reads, "If we confess our sins, He is faithful and just and will forgive us our sins and purify us from all unrighteousness." So let’s look ahead so we can steer clear of financial mistakes whenever possible. This is hardly an exhaustive list, but these are some of the bigger mistakes people commonly make: --Not realizing how expensive health care is. Having a serious medical condition without insurance or medical cost-sharing such as Christian Healthcare Ministries (chministries.org) can wipe out your finances for years to come. --Not having disability insurance. Have you ever thought about what would happen if you suddenly couldn’t work because of a health issue or an accident? Don’t count on Social Security disability benefits. It’s tough to qualify and the benefits don’t match most other policies. --Getting divorced. Even after attorney and court fees and the dividing of assets, the financial impact goes on for years. In her book, "The Case for Marriage," author Maggie Gallagher shows that the majority of people who weathered marriage problems were actually happier years later than those who divorced, in addition to being much better off financially. --Day trading stocks and trying to time the market. The stock platform Etoro surveyed day traders and their habits and found that 4 out of 5 of them lose an average of 36% of their invested money over the course of a year. It’s a wonder day traders hang on for so long. It’s probably because day-trading is so much like gambling, which we know can be addicting. Folks forget about their losses and just look for the next big win. Before they know it, they can be in deep financial trouble. So stay away from both day-trading and gambling and your bank account will thank you. Next, Rob turns to our callers and answers the following questions: --I’ve got a pretty sizable amount of money in my retirement account at work and am considering taking about $350,000 out to help us move to a better house. Is there a way to do that without a huge tax hit? --I was able to purchase my current house outright. We’re looking at getting a second house in Florida and are wondering if we should take out a mortgage to pay for that second home? And if so, should the mortgage actually be on the first or the second home? We have enough in savings if we include part of our Emergency Savings to pay off our home. We would probably be left with about two months of expenses in reserve. Is it wise to do this? --We learned that the reason to get out of debt is not just to have more money, but to have more money to give. However, there are so many charitable needs out there. How do I know where the need is greatest? And is it better to give a little to a lot of organizations or to give more to fewer organizations? --I’m eligible to retire from my job. My options are to take a lower annual pension along with a lump sum, or to take a higher annual pension with no lump sum. Is there a Biblical perspective to help me determine the best decision to make? Ask your questions at (800) 525-7000 or email them to [email protected] Remember that you can connect with a MoneyWise Coach, find books, articles and other helpful resources including the free MoneyWise app on our website MoneyWise.org. Like and Follow us on Facebook at MoneyWise Media for videos and the very latest discussion! Remember that it’s your prayerful and financial support that keeps MoneyWise on the air. Help us continue this outreach by clicking the Donate tab in the app or on our website.
Plenty of companies claim they can boost your credit score, but it’s for a price. Some are scams and some are legitimate. Either way, you just don’t need them. The truth is, there’s nothing anyone can do to improve your credit score that you can’t do yourself and should be doing. Today on MoneyWise, we’ll explain this and help you see money from God’s perspective. What exactly is your credit score? It’s a single number, usually between 300 and 850, that essentially tells a prospective lender how good a risk you are and how likely you’ll be to repay money loaned to you on time and in full. Five factors make up your score: payment history (35%), amounts owed (30%), length of payment history (15%), the different types of credit accounts (10%), and new credit (10%). First, pay every bill that comes in on time. Simple enough, right? We should always do that anyway. Proverbs 3:27 tells us, "Do not withhold good from those to whom it is due, when it is in your power to do it." Second, never use more than 30% of your available credit in any account. If you do those two things and in time, you’ll have a very healthy credit score that’ll get you a favorable interest rate if you apply for a loan. Most major scoring companies, including FICO and VantageScore, put the heaviest emphasis on timely payments when determining your score. A single, 30-day-late payment probably won’t do much lasting damage to your score, but you might get hit with a late fee. Consistent late payments of 30 days will drag your score down significantly. There are things you can do to make sure you pay on time. Get on a budget. This ensures you’ll always have enough to pay your bills. Then set up automatic payments from your checking account. Most banks now enable you to do that. If you prefer to pay manually, you can set up payment reminders. Setting a reminder a few days before a due date allows time to transfer money to the creditor. Never have a balance on a credit card. Instead, pay off the entire balance in full each month to avoid paying interest. The lower your balance on each card, the higher your credit score will be. If you find yourself in a tough spot financially and you have to temporarily run a balance on a credit card, many issuers now allow you to set alerts. This way, you’re notified when approaching the 30% mark. Another trick when carrying a balance is to make several smaller payments during the month instead of making the full payment due amount at the end of the billing cycle. This will lower your credit usage ratio and probably reduce the amount you’ll owe in interest, too. The longer an account is open, the more it improves your score. So, if you have two credit cards and want to cancel one of them, cancel the newest card to have the least impact on your score. Finally, avoid taking on any new credit accounts as that will negatively affect your score, at least temporarily. On today’s program we also answer your questions: --I’m eligible to retire soon and my options are to accept a lower annual pension along with a lump sum or take a higher annual pension with no lump sum. Which should I do? --I’m now able to save between three- and four-thousand dollars monthly. Where’s the best place to put this money? --My husband’s a pastor who receives a parsonage allowance. Should we pay off our mortgage as we just recently inherited some money? However, as a consequence, we’d lose the parsonage allowance. We still owe about $50k on the mortgage. Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to [email protected] Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, purchase books, and even download free, helpful resources like the free MoneyWise app. Like and Follow us on Facebook at MoneyWise Media for videos and the very latest discussion! Remember that it’s your prayerful and financial support that keeps MoneyWise on the air. Help us continue this outreach by clicking the Donate tab on our website or in our app.
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