businessSep 9, 202624:57

Making Financial Progress When Money Is Tight with Brian Holtz

About this episode

When money is tight, the financial goals you want to pursue can feel frustratingly out of reach. You may want to give more generously, build your savings, or pay down debt, but there simply doesn’t seem to be enough margin to do everything.

The good news is that financial progress doesn’t always begin with a giant leap. Sometimes, faithfulness looks like taking one small step at a time.

Brian Holtz, CEO of Compass Financial Ministry, says that whether financial pressure comes from past choices or circumstances outside our control, creating that first bit of margin is often the hardest part. But a few practical steps can begin building momentum.

1. Start With Prayer

The first step may not sound tactical, but it is foundational: invite God into your financial decisions.

James 1:5 tells us that if we lack wisdom, we should ask God, who gives generously to those who ask. When you feel financially stuck, tell the Lord that you want to honor Him with what He has entrusted to you and ask Him to show you the next faithful step.

The answer may not come as unexpected money. More often, God may provide fresh insight, reveal new options, or bring wise people into your life who can help you see your situation differently.

Before changing the numbers, begin by seeking the One who gives wisdom.

2. Think Smaller—but Longer

When margins are slim, quick financial wins may be harder to come by. But that doesn’t mean progress is impossible.

Perhaps you want to give 10% of your income but simply aren’t in a position to do that right now. Instead of giving up on generosity altogether, you might begin with 1% or even less and prayerfully work your way up over time.

The same principle applies to saving. If all you can set aside is $5 or $10 a week, start there. Small amounts may not seem significant, but consistency matters.

Jesus praised the widow who gave two small coins in Mark 12:41–44. The monetary value was tiny, but her gift revealed something much greater about her heart.

Faithful stewardship isn’t measured only by the size of the step. Sometimes the important thing is simply keeping moving in the right direction.

3. Use Windfalls to Create Margin

Occasional extra money can become a powerful tool when used strategically.

A tax refund, bonus, rebate, gift, or an occasional month with an extra paycheck can help reduce expenses that normally consume your monthly cash flow.

Instead of spending that money automatically, consider using it to eliminate a small recurring payment. Perhaps you can pay off a phone, clear a small department-store credit card balance, or eliminate another modest bill.

That may free only $10, $20, or $50 each month—but now that money can be redirected toward your next priority.

It’s similar to a miniature debt snowball. One small victory creates margin, and that margin fuels the next step.

When money is tight, momentum matters.

4. Shop With a Strategy

Another way to create breathing room is to become more intentional about everyday spending.

Start by prioritizing essential expenses such as housing, utilities, food, transportation, and other obligations. Then evaluate optional expenses.

That may mean pausing a streaming subscription during a difficult month or postponing a purchase you would otherwise enjoy. Needs should generally come before wants.

You can also make your grocery dollars work harder by purchasing staples when they are discounted. If chicken is half-price and you know your family will use it, buying an extra package may reduce future grocery costs. The key is buying strategically rather than simply buying more because something is on sale.

Small decisions like these can gradually create room in a tight budget.

Don’t Despise Small Beginnings

When finances are strained, it’s easy to become discouraged because you can’t immediately accomplish everything you want to do.

But stewardship is not about achieving financial perfection overnight. It is about faithfully managing what God has placed in your hands today.

Pray for wisdom. Start smaller if necessary. Use unexpected income strategically. Choose needs before wants. Then allow each wise decision to create a little more margin for the next one.

As Zechariah 4:10 reminds us, we should not despise small beginnings.

You may not be able to change your entire financial situation today. But you can take one faithful step—and then another.

Compass also offers a video study called Making Ends Meet, designed to help individuals and families find that first bit of financial margin and begin their financial discipleship journey one step at a time.

You can learn more and find additional biblical stewardship resources at CompassFinancialMinistry.org.

On Today’s Program, Rob Answers Listener Questions:

My husband has been in a nursing home for four years and is on Medicaid. I’ve been told that once I retire, if my income exceeds about $4,000 a month, I may have to contribute more toward his care. Is that true? And could using some of my 401(k) to pay down our mortgage affect how Medicaid treats my income or assets?
I keep my emergency fund in savings, but the interest is low, and CDs limit access. Would a money market mutual fund be a good place to keep emergency savings?
I’m receiving Social Security survivor benefits from my late husband. If I remarry, can I continue receiving those benefits, particularly at my age?
I’m 63 and have both a traditional IRA and a 401(k). Will my traditional IRA withdrawals be fully taxable in retirement, and would a Roth conversion make sense before I retire? Also, should I contribute only enough to my 401(k) to receive the 4% match and put additional retirement savings into my IRA instead?

Resources Mentioned:

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Faith & Finance — Making Financial Progress When Money Is Tight with Brian Holtz. Machine-transcribed; use the interactive transcript above to jump the player to any line.

This episode of the Faith and Finance podcast is brought to you in part by Christian credit counselors. If credit card debt is weighing on your heart and your unsure where to begin, our trusted partner, Christian credit counselors is here to help. Their debt management program can help you pay off your credit card debt up to 80% faster, while ensuring you honor your financial commitments in full. Take the first step toward financial freedom today. Visit faithfi.com slash ccc. We're called 800 557 1985. Zechariah 410 reminds us, do not despise these small beginnings for the Lord rejoices to see the work begin. Hi, I'm Rob West. When money is tight giving more, saving more, paying down debt can feel out of reach, but financial progress doesn't always begin with a giant leap. Sometimes faithfulness starts with one small step at a time.

Today, Brian Holtz joins us with four practical ways to begin creating margin. And then it's on to your calls at 800 525 7000. This is Faith and Finance, Biblical Wisdom for your financial decisions. Well, it's always a privilege to have my friend Brian Holtz back with us. Brian is the CEO of Compass Financial Ministry, founded by our good friend and former host of this program Howard Dayton. Compass helps people around the world grow as faithful stewards by applying Biblical wisdom to the way they earn, spend, save, and give. Brian, great to have you back. It's always great to be here, Rob. Brian, when money is tight, it can feel difficult to make progress, especially when you want to give generously and save wisely. What encouragement would you offer someone who feels like there just isn't enough margin to do both? Yeah, Rob, that really is tough. You know, whether they're in that position because of past choices or forces outside of our control,

gaining that first little bit of margin seems to be the hardest. So I'd love to share four tactical moves that can spark that first bit of progress. Step one is to start with prayer. I know that doesn't sound tactical, but it is. James one five promises that God gives wisdom to those who ask. Tell him that you want to follow his ways, but you've hit a roadblock and you need his help and he will respond. That's right. Now, we'd all love for it to be extra funds in our bank account, but it's usually fresh insight. You'll start to spot new options and meet wise people. But one way or another, God will answer those prayers. Yeah, that's well said and absolutely right. That we need to invite God into our financial lives. Yeah. And we often miss that step. All right, what's step two? So second, people need to think smaller, but longer. Slim margins can certainly delay the quick wins and the progress where you really want to

feel like we're making, but they don't stop us from making steady long-term progress. Maybe you want to give 10% for all the right reasons, but you can't. We'll start with 1%, or maybe even less and work your way up. Remember, Jesus praised the widow who gave two tiny copper coins, not because of the value, but because of the heart she had behind it. Same thing with saving. Tuck away five or $10 a week if that's all you can do, but tiny steps will still cover that same mile. It just might take more of those steps. That's well said. So start with prayer and then think smaller, but longer. And what's step three? Step three is really to aim the windfalls that you have at making monthly or weekly margin. So think about tax refunds or that fifth paycheck month that you get. Maybe a rebate from something you bought at the hardware store and use them strategically to drop monthly costs. So maybe you knock out a small bill that frees up $10 or $20 a month every month, like paying off

your phone or maybe a department store credit card that you used at one time before you tackle those big debts, knock off the little ones that first freed up payment becomes fuel for the next steps that you want to take. Yeah, it's almost like a mini snowball method. It is. It's all focused steps, but building momentum over time, right? Absolutely. And that's the play when money's tight. The fourth and final step is shopping with a strategy. Stock up on the essentials when they're on sale, pay top priority bills first and trim out the non essentials. So if chickens have price today, grab two packs instead of one, but only if you're going to actually use them. Yeah. Pay your housing bill before you go to the extras. And maybe that means some months you have to skip the streaming service, but that's better than missing out on a rent payment. And wants generally cost more than needs, choosing needs before wants honors God and grows that margin like we're trying to do. Really great suggestions.

I know Compass has a resource that is specifically designed, Brian, to help people navigate a tight budget, right? We do. It's a video study called Making Ends Meat. And it's designed to help people find that first little bit of margin and begin their financial discipleship journey step by step, even when they're starting at the bottom. And you can find that resource along with many others to help you steward God's money wisely. Just simply head to compassfinancial ministry dot org that's compass financial ministry dot org. Brian great to have you with us today. My pleasure Rob. That's Brian Holt CEO of Compass Financial Ministry. Financial progress rarely happens overnight. So start small, stay faithful and let each wise decision create a little more margin for the next. Back with your questions after this. Stick around. As the leading advocate for the Christian financial industry, Kingdom Advisors serves the public

by promoting the integration of a biblical world view across every aspect of the financial services industry. And we serve a growing network of thousands of Christian financial professionals equipping and empowering them to carry biblical financial wisdom to their clients peers and community. For more information visit kingdom advisers dot com. Are you feeling overwhelmed by credit card debt? As followers of Christ, we are called to be good stewards of what God has given us. That's why our trusted partner Christian credit counselors is here to help. Their debt management program can help you pay off your debt 80% faster while honoring your commitments in full. Take the first step toward financial freedom today. Visit faith 5 dot com slash CCC or call 800 557 1985. I'm so glad to have you with us today on faith and finance.

Do you have a question today in your financial life? Well, we've got lines open. We're ready for you. We'd love to take your call at 800 525 7000. We've got looks like four lines open right now 800 525 7000. Whatever is on your mind today, whether it's your lifestyle and your your budget, maybe it's the best way to pay off debt. Maybe you're struggling with that credit score. You're getting ready to buy a house or get a car loan and it's concerning you. Maybe you want to give wisely, especially this time of year and maybe you want to do a qualified charitable distribution out of your IRA. Well, any of those topics and more, we'd love to chat with you about the number 800 525 7000. You can call right now. Now let's begin in Illinois today. Sure, Ne how can I help? Hi, well, so I have a question. My husband is in a nursing home right now. He's been there for four years. I do draw my social security and now he gets, mine's was bigger than here. So now he gets there and that goes, of course, to the nursing home. I was told by someone that once I retire,

if I bring home over $4,000 a month that I would have to start doing a spend down and I would have to contribute to his money, you know, to pay for his state at the nursing home. I don't know if that's true. And the second part of the question is, can I take some of my 401K now and put it towards my mortgage to offset how much I would have to get to the nursing home? Because he's on Medicare, Medicare now. Got it. Yeah, great question. So it sounds like you're referring to. It's referred to as a Medicaid spend down. And essentially, it's really going to depend on whether your husband is on Medicaid or paying privately. And what states you live in because rules vary by state. Is he actually on Medicaid or is he paying for the nursing home privately? No, they just get his social security check. Okay. Yeah, so that's going directly to the nursing home, correct? Yeah, yeah, so he's not private paid now.

Okay, all right. Yeah, so I think the key there is, if he's in a nursing home on Medicaid and his social security check is already being paid to the nursing home, which is how generally how Medicaid works, then you're allowed to keep your own income. So your retirement income is not automatically required to be paid to the nursing home simply because your husband is on Medicaid. His income, social security and pension is applied toward the cost of the care. That's the way that works after certain permitted deductions. There are special spousal impoverishment protections that allow a living spouse, you at home to retain certain income and assets. But regarding your question about the money from the 401K, I would get some professional advice on that. A 401K withdrawal could create taxable income that could affect that Medicaid eligibility. Paying down the mortgage, I love that idea generally.

But you want to talk to an elder care attorney because again, those rules do vary by state. So I'd probably get some counsel on this before you do anything because what you would not want is for you to do something that inadvertently jeopardizes that government assistance that's coming through Medicaid, anything remaining after they get his social security. Does that make sense? It does make sense. Now we were estranged, but we still married when he went into the nursing home four years ago. And I don't think that has no bearing because legally we are still married. Yes, exactly right. So if you are still legally married, then Medicaid is going to treat you as spouses, even if you're living apart. But I would say the exact rules and whether your income or assets are considered are going to depend on the Illinois Medicaid regulations and the circumstances of the separation. So again, I think you're going to want to check with somebody who can advise you

on that professionally. Okay, thanks for that. All right. Thank you, Sharna. Call anytime if I can help. And we appreciate you being on the program today. Steve, go ahead. Hey, Rob. Thank you for taking my call. I'm a long time listener. I used to listen back when Larry Burkett started the show. So, oh, cool. Really, really loved his advice. And I love your godly wisdom too. Well, thank you. I appreciate you mentioning Larry Burkett. Absolutely. Some of my question is, I have an emergency fund set up and I've had it in a savings account. I had there for a little while. Wasn't collecting much interest. Try to CD for a couple months. Same thing. Not able to get to it. You know, it had to be matured and whatnot. Just wanted to know what your thoughts were on putting my emergency fund into a money market mutual fund.

Yeah. Yeah. The only downside is the the money market mutual fund while it pays a higher rate of interest, typically than a traditional savings account, it's not FDIC insured. So the value can technically fluctuate slightly, although it's extremely rare and withdrawals can take a day or two. It's not instant like the bank. So while very safe doesn't have the guarantee of a bank account. So for some folks, that's a deal killer for others. They say, no, it's such a modest amount of additional risk. I would rather get that higher yield. That really is my primary objective. And I think if that's the case, then I would say, yeah, the fidelity government money market or the Schwab value advantage money market or even a fed a Vanguard federal money market fund. Those can be great. Give you a little bit more yield. You just need to understand that you don't have that FDIC insurance. And you don't have immediate access to the money like you do with a bank product.

I see. Okay. All right. Yeah, my risk conversion. I'm okay with the FDIC. But if I needed it right away, you're saying it would be a day or two. Typically, yeah, because you've got to wait for the the transaction to settle and clear. And then you know, you could take a withdrawal at that point. So it's just not immediate like it would be with a savings account. You know, in terms of the funds, you know, having a problem, they call it breaking the buck. Because basically what happens is the idea behind a money market fund is it always is priced at a dollar per share. It's only happen once that I can think of, you know, there was one in 2008 where it fell to 97 cents, you know, after Lehman Brothers, you know, they held Lehman Brothers commercial paper during the financial crisis. And that, you know, event shook the industry and it triggered some reforms. Since then,

they've made funds much safer. The SEC has strengthened the rules around higher credit quality, more liquidity. But the bottom line is it can happen. And it has happened. And so you just need to understand that. But again, I would underscore the idea that it's extremely rare. Okay. Well, thank you very much. And God bless you. All right. Thank you as well. Appreciate you, Steve. And thanks for mentioning the late Larry Brickett. I walk in the shoes of some giants, Larry Brickett, originally, then Howard Dayton, one of my mentors hosted the program after Larry passed away in 2003. Howard passed it onto me in 2017. And we have an amazing team, boy, what a privilege to come alongside you. listeners each day to encourage you out of God's word and your role as a steward to give you some practical advice. And we'll continue to do that right after the break. So if you have a financial question, now's a great time to call. The number is 800 5257000. It's 800 5257000. Or if

you'd prefer to email your questions, send it to us at ascrawbidfaithfi.com. I'm Rob Weston. You're listening to Faith and Finance Biblical Wisdom for your financial decisions. We'll be right back after this break. How much money is enough? It's a question almost all of us wrestle with. But few of us know how to answer. What if God has already given us a better way to think about enough? One that leads to contentment, freedom, and greater generosity. Our Faith 5 field guide, how much money is enough will help you explore this important question through scripture and practical exercises. Get your copy today at faithfi.com slash shop. That's faithfi.com slash shop. Faith 5 is grateful for support from one Ascent. One Ascent believes that your values in inspire why you invest and how they can inspire how you invest. One Ascent's goal is to provide

solutions designed for every need and invest in businesses that bless the people in places God has made. They want to help investors do well by doing good to explore a new way of investing that aligns with your values. More information is available at oneascent.com slash faithfi. Taking your calls today here on Faith and Finance, 800-525-7000, let's go down to Tampa. Mary, go ahead. Yes, this is a Social Security question I have. Okay. My husband died a while back and I read somewhere if I decide to re-marry, I can still receive his death benefits if it's, you know, I get married again. Is that true? Yes. There's two different benefits to keep straight. There's the spousal benefit which is paid while your spouse is living and then the survivor benefit which is paid after your spouse dies.

So since you mentioned you're already receiving benefits based on your deceased husband's record, you're receiving a survivor benefit. So if you re-marry before the age of 60, you generally lose eligibility for survivor benefits based on your deceased spouse's record. If you re-marry after 60 or at 60 or older, you can generally continue receiving those benefits based on his record. Oh, okay. Okay. So it wouldn't interfere with if I got married again and, my new husband if I decide to get married again, I would still get my deceased husband's benefit. That is correct. If you're 60 or older? Yeah, I'm 66. So. Okay. Yeah, very good. Yeah, so that's exactly how it works. You would have the ability because you're re-marrying at 60 or later to continue receiving those survivors benefits.

So you should be in pretty good shape. Okay. All right. Thank you very much for your answer. Listen to me every day. Well, thank you, Mary. Call anytime. 10 Nashville, Tennessee. Highland. Go ahead. Hi. Thanks for taking my call. I just got to quick question about a couple of different investment things. I currently have a traditional IRA that I contribute to myself monthly and I was wondering. I realized that it's going in after tax right now. So it's lowering my taxable income now. But when I have to start taking the RMDs, then I have to pay tax on all withdrawals. Is that correct? Yeah. I mean, typically we would say that's called pre-tax, right? So you put it in. It gets excluded from your taxable income. So you don't pay tax on it. And then when it comes out, yes, it's added to your taxable income. As opposed to the Roth, where you get the income, you pay the tax on the full amount. And then you make the after tax contribution, but it grows tax-free and you never pay any

tax on the gains when you pull it out. So is it more? Would it be more than I'm 63 now? Probably going to work another, I don't know, fourish years. It can it be converted to a Roth? And would it be beneficial to me to convert it to a Roth? Yeah. Yeah. So it absolutely could be converted to a Roth. It would mean that you're paying the taxes now versus later. Because if we leave it in the traditional IRA, when you take it out in retirement at some point, maybe you convert it to an income stream or you start to pull it out as needed, disupplement other income sources, whenever you pull out in any given year would be added to your taxable income. If you convert it to a Roth, what you can do, it just means you're paying it now instead of later. Since you're working, though, and earning income, generally we would not see a lot of people doing that because while you're working, you're likely in a higher tax bracket, then you may be after retirement when you're not working.

So what a lot of people do is between the age of, from the year they retire until they're required, minimum kicks in at 73, that's usually the period of time where they start converting to Roth because their income has dropped. So they're in a low bracket. And then we use a strategy called filling up the brackets. So you could check with your CPA or if you do your taxes yourself, you could take a look at this, but you would look each year and say, okay, how much more income can I have before I go into the next bracket? And then you could convert that amount to Roth during that year. But the idea is you probably don't want to do it during the peak of your earning years because you're already in a higher bracket and then adding more income on top of that through the conversion is usually counterproductive. Does that make sense? Oh yeah, yes, that makes perfect sense. And then my second part of my question is I have a 401k with a 4% match, but I'm contributing

more than that. And when I look at the return, the amount for the traditional IRA versus the 401k account, the traditional is earning better. So would it be wiser to contribute more into the traditional versus contributing additional into the 401k? Yeah, well, first of all, and I didn't hear you say this, but just to make sure you understand, you probably can't move any of that 401k money out until you separate from the company. At that point, you could roll it to an IRA. But if you're still working, it's called an in-service distribution. And, you know, generally the plan administrators don't allow that. So yeah, I think the question is, do you prioritize the 401k or do you prioritize the traditional IRA? Well, remember, the 401k and the IRA are just the account type, which is different than the investments. So it just so happens that the investments that have been selected for the IRA are outperforming the 401k. So I think the first thing to do would be to

go back to the 401k and say, why are those investments not performing well and do you need to make a change and perhaps, you know, change the allocation inside that 401k? Maybe you're too conservative, maybe you have too much in bonds, you know, maybe you're in a certain classification of stock that's not been performing as well as maybe what you have in your IRA. So I would say maybe you look at tweaking that first, but as long as you're maximizing any match available through the 401k, I don't have any problem with you, you know, funding the IRA first. It's just that you're likely going to hit the ceiling on the contribution limit for the year much quicker because 50 or older, it's only $8,600, whereas between age 50 and 59, you can put in 32,500 for 2026 in a 401k. So you've just got quite a bit more room there for contributions. Okay, my question was that I'm giving in, I'm putting into the 401k above the 401k match. Okay, great. I think it's putting more into the IRA

instead of putting the extra into the 401k. Yeah, and I'm not opposed to that at all because you're getting your 4% match. So you certainly could, you know, start to prioritize the IRA instead. I'm just saying, let's back up. And if the 401k is not performing as well as the IRA, I want to know why. And so I want you to go take a look at those investments or get somebody at the plan administrator to help you evaluate what you've got to see if you don't need to make a change. But separate from that, yes, I have no problem with you starting to put anything above the match into the IRA. But remember in the IRA, the contribution limit for somebody 50 and older is only $8,600 for the year. So you're probably going to get to the contribution limit, which at that point, you'd have to then go back to the 401k and start putting more there. Okay, gosh, that makes perfect sense. Excellent. Hey, Lynn, thanks for your call today. Call anytime if I can help. Big thanks to my team today, Pat Taylor and Devon. Plus everybody here at FaithFive. We'll see you next time.

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