On yesterday's Faith & Finance program, SMI’s executive editor Mark Biller offered plenty of ideas for strengthening your financial health in the new year.
To listen, click the play button below. Scroll down for the transcript.
Faith & Finance with host Rob West airs each weekday morning on American Family Radio. A different version airs weekday afternoons on Moody Radio.
(For more radio appearances by members of the SMI team, visit our Resources page.)
Transcript
Rob West:
Hi, I am Rob West. Only God knows what the future holds — but that doesn't mean we can't prepare for whatever may come! Mark Biller joins us today with some great suggestions to shore up your finances.
This is Faith & Finance on American Family Radio — biblical wisdom for your financial decisions. (theme music ends)
Well, our friend Mark Biller is executive editor at Sound Mind Investing, where they've been working extra shifts to finalize their annual list of financial moves you can make in the new year. And there are a number of them.
Mark, great to have you back.
Mark Biller:
Thanks, Rob. I'm good to be back with you.
Rob West:
Well, we're always impressed when you roll out this list every year. It's exhaustive, and of course, we can't cover the whole of it on the program, but folks can find it at soundmindinvesting.org. It's simply titled Your 10 Most Important Financial Moves for 2024.
Mark Biller:
Yeah, thanks for that, Rob. Everywhere you turn right now you're seeing advice about the new year, and the problem with that is it's usually one size fits all. What we're trying to do with our list is help people choose the best 10 ideas that specifically fit their situation.
So we discuss over 60 ideas in this article, but we encourage each reader to go through and select their personal top 10 list. And we've found over the years that people who go through this process of making a personal top 10 list, and then follow through on those action steps, they become better stewards and make tangible progress toward their long-term goals.
Now, I should also mention we've got links to additional articles and resources for all of these suggestions on the SMI website if listeners want more information or they want to dig deeper on a particular topic.
Rob West:
Yeah, very good. Now, these suggestions are broken up into several categories. We'll go over a few in each category. So let's dive in.
The first category is "Spiritual and Financial Fundamentals." What would you point out here?
Mark Biller:
Yeah, so we try to set the appropriate context before diving into the nitty-gritty financial stuff, and that really begins with understanding what God says about us and about our money and scripture. So a few highlights from this section include resting in God's love. His love for us isn't based on our worth or merit, and if we start with an appropriate understanding of who we are in Christ, this whole exercise regarding our finances becomes so much easier and less stressful.
And then along those same lines, a second very worthwhile step is to invest time studying what Scripture says about money and material possessions. SMI has long said that the number one financial mistake that Christians is ignoring biblical wisdom about financial matters and looking to secular advice instead, and by allowing yourself to be guided by biblical teaching, you'll guard against imprudent and unwise choices that inflict financial harm.
Rob West:
Yeah, that's helpful. Now the next category is "The World Around You." And that, of course< covers a lot of stuff, right?
Mark Biller:
(chuckle) Yeah, it does! So here's some suggested moves from that section. One is: improve your understanding of the problems and the policies that are shaping today's economy. We've written a ton about inflation and the potential for recession this past year. Having a working knowledge of these subjects is really helpful.
Another big-picture topic to understand relates to the rapidly expanding level of federal debt. And Rob, honestly, I hate putting stuff like this on the list because it's to me, the sort of background noise that you and I have been hearing and talking about our whole careers. But this year we had to look at it and say the debt situation has escalated so dramatically in these last few years that it's legitimately impacting interest rates, how markets are behaving and so on, and investors just can't afford to be ignorant of those types of factors.
Rob West:
Now we're going to move into the next category, and that is "Strengthening Your Foundation." So what do you have for folks here?
Mark Biller:
Yeah, laying a strong financial foundation is so critical. So a few of the items here include building an adequate emergency fund before risking money in the markets, and we discuss how to go about doing that.
The second item is: invest time creating and following a budget. Now, this is probably the least popular suggestion, but in all seriousness, it's probably the most powerful single step that a lot of people can take to make real financial progress in the year ahead. I just really can't put it any more bluntly than to say creating and living on a budget is often the difference between financial success versus financial failure for a lot of people. And I should put in a shameless plug here for the FaithFi app, as that's one of the best tools out there to help people figure out and implement a workable budget.
Another point from this section, another idea would be committing to giving generously even if you're still paying off debt. Getting out of consumer debt is crucial for long-term financial stability, but debt repayment shouldn't take precedence over still giving generously during that process. That can be kind of counterintuitive, but giving is a sign of trust. It's a concrete expression that you believe God knows your needs and is going to provide for you.
Rob West:
That's great, Mark. Now I think we're ready for the next section — and that is "Developing Your Investing Plan." So what would you share with our listeners?
Mark Biller:
Yeah, so of course we've got a lot of suggestions here. This is our bread and butter section, if you will. But one there is: face your fears, overcome your inertia, start investing. A lot of people are waiting for the "perfect time" to get started, but really for most people, now is the best time to start and making regular investments over a long period of time. Ignoring what the market's doing today is going to help you to build a healthy nest egg down the road.
Now, a second step here for relatively new investors is to become a dollar-cost-averaging investor and ideally, automate that process so that it's out of sight and out of mind. Now, dollar-cost averaging simply means you're investing the same amount of money at regular intervals. So for example, you're investing $300 every month or $100 every pay period. And often the best way to do that is through a workplace retirement plan. But if you don't have a workplace retirement plan, you can still set up automatic monthly investments into an IRA. That's a very achievable step and it's definitely worth the effort of setting that up.
Rob West:
Yeah, that's really helpful. Now let's build on that first category on developing your investing plan, and let's move into "Broadening Your Portfolio."
Mark Biller:
So this is kind of the next level, a little bit more advanced. And the first item here would be to become a diversified investor. And this includes starting to learn about different types of stocks, different types of bonds, how to combine them in a portfolio. As you might expect, this is the sort of thing that we spend a lot of time discussing in our SMI material. And once you've got a handle on those basics, you'll find there are other ways to diversify too. Alternatives like commodities, real estate and gold.
This is also the section where a person would start thinking more closely about retirement taxes and the best way to utilize traditional and Roth accounts. Rob, you and I just spoke recently on the program about how blending these two account types can be a good move for a lot of people.
Rob West:
Yeah, that's right.
Mark Biller:
And of course for the gold bugs out there, we've got a separate action item about gold investing. You know who you are. We've got lots of resources that discuss the tactical process that SMI uses for investing in gold.
Rob West:
Yeah, that's so helpful. We're talking with Mark Biller today at Sound Mind Investing. We're specifically referencing this article at soundmindinvesting.org. It's titled Your 10 Most Important Financial Moves for 2024. We'd love for you to check it out today.
All right, this next batch of suggestions, Mark, is around "Retirement." So what do you have for us here?
Mark Biller:
Yeah, one big one, Rob, is to start thinking through your later-life decisions — ideally when you're in your fifties. Now, most people put this off until later, but research really suggests that it's wise to think this through earlier. And this can include creating or updating a will or other estate planning documents could also include the possibility of hiring a financial professional to help guide you through the crucial financial decisions that come with aging and retirement.
Another item in this section, there are lots of tangible retirement items relating to Medicare, how to optimize Social Security benefits, those types of things. Another bigger picture item here is to seek the Lord about how he wants to use you during your retirement years. You may be retiring from a specific job, but that definitely doesn't mean that the Lord is done with you. He may have a new capacity, a new vocation, new ideas for you, and a new season of life, and it's a good idea to spend time asking him about that.
Rob West:
Now, as we begin to wrap up today, one more category, and you might call it everything else. I know it includes children, work, college, technology, and insurance. So share a few suggestions from this one.
Mark Biller:
Yeah, so for parents and grandparents, a good one here is be intentional about training your children to be wise and faithful stewards. Our consumer culture just screams at us constantly that the key to happiness is to have more money, more material goods, and Christian parents and grandparents play a key role in presenting a different narrative on this subject — specifically, we want to teach our kids that God owns everything and we're called to be productive with whatever he entrusts to us.
Some other items in this section include insurance items. One that stands out is making sure that you have enough liability insurance coverage. That's a big one because the default liability coverage in a lot of homeowners and auto policies is on the low side, and you might be able to bring that up by simply adjusting the levels within the policies you already have. Or by adding an umbrella policy — umbrella liability policy — which picks up when those policies leave off.
Disability insurance is another topic to consider here.
And, of course, for those with young children, the topic of saving for college is always of particular interest. So spending some time learning about the best ways to approach that is going to be time well spent for those folks.
Rob West:
Wow, and that's just a sampling folks of the many great suggestions in the SMI article, Your 10 Most Important Financial Moves for 2024. You can read it at soundmindinvesting.org and build your personal list for the new year.
Mark, thanks for stopping by.
Mark Biller:
Thanks, Rob. Always a pleasure.
Rob West:
That's Mark Biller, executive editor at Sound Mind Investing. Again, learn more — soundmindinvesting.org.
Back with much more on Faith & Finance. Stay with us.
