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Equipping people worldwide to learn, apply, and teach God's financial principles so they may know Christ more intimately, be free to serve Him, and help fund the Great Commission.
Today on MoneyLife
Thursday, August 14, 2008
Chuck Bentley Answers Your Email Questions
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Chuck Bentley answers email questions on today's program. If you've got a question for Chuck, send it to ChuckBentley@crown.org.
A. You're drowning in debt. A debt that large needs more than $25 a month. You need a plan to get you where you need to be.
Despite your big debt and small income, God will intervene and help you get out of this situation. Take solace in Proverbs 15:16, "Better a little with the fear of the Lord, than great wealth with turmoil."
Q. Our little girl is 7, and since she was 2, she has been selling eggs and puppies in the neighborhood and making a couple of hundred dollars a year. We invested her money a few years ago, but that hasn't turned out well at all. We thought mutual funds were supposed to be a slow but secure investment, but we’ve lost quite a bit of money. What would you suggest we do for our little girl’s money as well as for a little savings that my wife and I have? – Forrest in Rusk, Texas A. I love to hear about young entrepreneurs like your daughter. It's great that your daughter is learning to make money, a skill all parents need to teach their children. I'm glad you're also teaching her to manage money. There's a difference between saving and investing. Saving is putting money in a safe place that doesn’t give you much of a return, but also has little, if any, risk. Investing requires risk, but its rewards can be greater. At your daughter's age, saving is wise. When enough savings have accumulated, then some can be invested. Put the money in a CD or Treasury note until you have enough to invest. The biggest mistake most people make is becoming investors before savers. Follow the Crown Money Map for long range advice.
Q. My wife and I are nearing retirement age, and with the economic downturn, we're wondering if we should use 401K money to payoff our mortgage, which has 25 years left. My wife would like the security of having no debt, but I hate to withdraw the money and have the tax consequence while we are both working. What are your thoughts? – Jim in Florence, South Carolina A. It's important to follow a sequential plan as represented on the Money Map to avoid getting into this kind of situation. Most of your resources are in a long-term investment that will penalize you for early withdrawal. You will pay penalties if you withdraw from a 401(k) before age 59 ½, plus you’ll pay taxes on the money at your current taxable rate. keep your money in the 401(k) and use your dual income and take radical steps to pay off your house debt in 7-12 years. Check out Crown's mortgage pre-payment calculator.
Q. Our 17-year-old son is part of a five-member Christian rock band that’s been together for about two years. The band manager, also father of two of the members, thinks all the money should be put into the band account and used for instruments, recording, and other band expenses. But my husband and I think the boys should each get paid a percentage to pay for their own sticks and strings, so they can learn how to handle their own money. The band manager thinks it would be A. Both opinions are correct. Some money should go into a band fund controlled by the “manager.” The rest should go to each band member to manage on his own. This is a great opportunity for life growth. As soon as possible, meet with band manager and tell him you understand his point of view. Make sure he understands your goal to help each boy learn to manage money wisely. Please let us know how it works out!
Q. My husband recently had to have gall bladder surgery, and we have no health insurance. We also don’t have a 40l(k) or any savings. We have been tithers, but my husband says we can’t afford to pay our tithes now that we have to pay this hospital bill. Without too much fuss, I told him "do what you have to do but I will pay tithes on my income." What do you suggest? – Theresa in Franklin, North Carolina A. Protect the unity of your marriage. This is an opportunity for you to win your husband’s confidence. Don’t have an attitude of I’ll do it no matter what he says. You and your husband need to be better planners. Ask him if he would agree that financial plan is needed to gain savings and insurance. Your ultimate goal is financial margin so you can give to God's Kingdom. Our Money Map Coaches can help you. Also, please reflect on 1 Peter 3:1, "Wives, in the same way be submissive to your husbands so that, if any of them do not believe the word, they may be won over without words by the behavior of their wives."
Q. Our son has graduated from college and moved back home. He hasn’t been able to find a job. What do we have to do to get him to move out of the house? – Concerned mother A. It's a delicate balance between helping your kids and holding them accountable. It's a tough job market right now for college graduates. Suggest to your son that he get a job of some kind while he’s looking for a career job. Don’t allow him to be idle, even if it's in front of the computer. After a period of time, begin asking him to pay rent, perhaps at a reduced rate but enough to help him be accountable. Don’t make it easy for this situation to continue.
Q. We’re foster parents, and we get a small check every month. Should we pay tithes on that since it's not exactly earned income? A. I'm thankful you have a desire to give. That’s very encouraging. We always want people to grow in generosity, but you shouldn’t tithe on income received on behalf of foster children. It's required by law to use that money for their care. The State is providing it, you aren’t earning it. You are only free to use that money on the expenses of the foster children. Reflect on Proverbs 3:9, "Honor the LORD with your wealth, with the firstfruits of all your crops." |
Types of SavingsAlong with discipline and maintaining a budget, saving is the best way to prevent being encumbered by debt. |
Budgeting a Contigency FundThe common attitude presented in the Bible is to save for emergencies on a regular basis. It may be difficult, but it is worth the discipline. |
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20 Major Advantages of Investing in Mutual FundsMutual funds are almost certain to play an important role in your financial future. |
Disciplining Children FinanciallyFinancial pressure placed upon young adults is almost impossible to resist. As parents, our responsibility is to teach children self-discipline. |
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Other Resources: |
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Q. I'm a single mom with two teenagers. For the past two years, I've been investing $25 per month in mutual funds by way of a 457 Deferred Compensation Plan. During the past six months, I have earned 2.1% interest. To date, the value of this account is only $745. My annual gross income is $37,316. Should I stop investing in this plan and put the $25 towards paying off $40,000 debts? – Charise in Tampa, Florida
