Today on MoneyLife with Chuck Bentley

We know you have a passion for reaching the ultra-poor, but how can you do that when you’re selling a box set of DVD’s in the U.S. at a standard price?

That's a great question about the God Provides™ Film Learning Experience. It may appear that the two things are in conflict, but they actually work together. The goal was to produce the films in English, sell them, and use money from the sales to get the films translated into 26 languages and distributed to people around the world who can’t buy it. By selling God Provides in the developed world, we are seeking to be good stewards of what God has given us. God Provides™ isn’t just another tool. It was developed to help solve a problem. The problem is that the world is desperate for spiritual and financial transformation. People are trapped in man’s economy but they know there is more to life than money. They long for a spiritual need in their heart to be filled. Spiritual transformation leads to financial transformation. We are driven to solve this problem. I believe immersion in God’s Word is the solution. God’s Word brings the spiritual and financial transformations together. The short films highlight stories in the Bible that do that. We rented a theater in Orlando and Dallas to show Abraham and Isaac on the big screen. Listeners are invited to attend this free event, no tickets are required; it's first come, first served. I will teach and Sharon Epps will facilitate the learning experience.

I am torn between two decisions. If we are living in the last days before Christ will return, what should be my priority: reaching others for Christ by giving to ministries who can do so full-time, or paying off my mortgage? We have no other monetary debt.

I love this question. I get many different questions about paying off a house or doing something else. People are hesitant because of our culture of debt, and the overemphasis on the tax benefit which is really small. Ignore all the arguments against paying off the house and pay it off as quickly as possible. We’re in a time of declining home values, but your house is not supposed to be an investment, it’s a place to live. It doesn’t need to be at risk of being lost. I appreciate your motivation to give. I believe you can pay off the mortgage and give, and when you pay off the mortgage, you can give more. It's a win, win situation.

I regularly hear advice to stay below a certain percentage of income [on your mortgage] but have never seen the warning to stay below your current housing 'spending' when buying a house.  That can give the impression that taking on a much larger payment than what you are currently spending is safe as long as you stay below 38%.  Is that what Crown recommends?

I understand the concern about a one-size fits all formula. Housing expenses include more than mortgage payment or rent. The percentage guidelines help put the total expense into context with the rest of your budget. Our budget guideis helpful and available for free. The 38% housing guideline applies to your net spendable income, after tithe and taxes.

We feel super high inflation is coming with the amount of dollars being printed.  Is it still wise to pay this off as the debt will become cheaper if and when high inflation starts?

This is similar to an earlier question and my response is the same, pay off the house. You're making a big assumption on what will happen. The goal should be to become debt-free. If you free up cash, you can diversify your investments. I do believe we’ll have hyper-inflation. Diversified investments can help you offset it.

Is it ok not to tithe if I’m giving 20% of my income to support family members?

I believe you are fulfilling one part of Scripture but neglecting another. We are to give our first fruits to the Lord. When we tithe, we let go of that money and give the Lord control of it. We’re not to direct that money. That money is to perpetuate the church, God’s kingdom and God’s glory. The church you should give to is the one where you are being fed. A tithe is setting aside the first fruits of your income to support the Lord’s word through your church. Do that first and then help your family after that. In this situation, the problem may be that you’re giving your family members in need 20%. They may be dependent on that income from you and it would be better to help them get out of financial bondage. Help them on a short-term basis but don’t let them become dependent on you. Support them in other easy such as through counsel. Point them back to the church to help meet their needs.

I have recently been able to put money in a savings account, I now have enough to pay off some of the smaller credit card balances that we owe but is it better to keep the money for a rainy day & keep paying monthly minimums or go ahead and pay off a couple of these small bills?

The Crown Money Map was created to offer guidance in situations like this. It gives people the next steps no matter where they are on their journey to true financial freedom. You must begin with a spending plan. It will give you the ability to save $1,000. Once you’ve saved $1,000 by living within your means, you should start paying down high-interest consumer debt. As you pay it down and free up more money that can be saved, you should build an emergency fund equal to one month’s living expenses. Then increase it to six months since the average length of unemployment right now is six months. So now that you have the minimum amount saved, start paying down your bills. As you get rid of the consumer debt, steadily build your savings. Savings will help you get out of the trap of using your credit card and running up debt. Take action and trust the Lord to help you out of the bondage so you can be free.

When my husband and I got married 16 years ago, we took out a Whole Life Insurance Policy for him in the amount of $50,000.  You talk about getting term life insurance, but do you think we should keep this whole life policy, since we’ve had it so long, or should we cash it out and switch to term?  I feel like we spend a lot each month on insurance.  We currently spend about 6% of our yearly income on insurance (life, auto, home, accident).

It's difficult to know the present value of your policy and what you would get if you cashed it out. In general, it’s better to "rent" insurance through term life insurance. Term life insurance is cheaper. You're better off in the long run if you invest the difference between it and whole life. There are some cases in high risk environments where whole life is helpful. In this case, I recommend you stay in your whole life policy since it’s been 16 years, but if you add any future life insurance, use term. Also, 6% on all your insurance is exactly where you need to be.

What is the maximum gift amount you can receive in a year without being taxed?

You can give an individual $13,000 in a calendar year without the money being taxable to the recipient.

We have completed a 60 day budget, tracking every expense and living with a margin. Our combined bring home pay is $6630 and we are budgeting to live on $5800. Our 401k contributions and medical and childcare flex dollars are taken out before the $6630. The remaining 15% margin is divided between consumer loan payoff and building our emergency savings.  We have $3100 in our emergency fund. We are paying 10% tithe + giving.  We have no credit card debt. We are upside down on the car loan and it has high mileage. We REALLY want to get it paid off. We owe approx. $15k. Does our allocation of 60% debt and 40% savings make sense? We have an ultimate 5 year goal, no auto debt, no HELOC and a 5 month emergency fund. When we have “extra” money, should we put it all on debt, all in savings, or continue with the 60/40 split?

I love that you’ve taken what you’ve heard on this program to heart. You've been living on a budget, found financial margin by spending less than earned, and now you're trying to figure out what to do with your surplus income. This is a very encouraging email. Continue the 60/40 split. It's important to pay the car loan off. That will give you a better return than any current savings vehicle. Pay off car and save for emergencies. When car loan is paid off, finish building your emergency savings, then pay down the HELOC. When you get those two done, you’ll have made significant progress on your journey to true financial freedom. Keep going and let us know when you get to the end of it.

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Don't forget about the upcoming God Provides™ premieres in Orlando and Dallas. I'll be in Orlando, Thursday, October 15 and in Dallas, on Friday, October 16.

We've rented a theater in each city to show Abraham and Isaac on the big screen. See the complete city tour list here. You're all invited to attend this free event, but seating is limited, first come first served.

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Budget Busters

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Other Resources:

• God Provides™ Film Learning Experience
• Career Direct
• Your Money Map Video Guide
• Business By the Book
• Crown Mvelopes