Why Your Grandparents' Money Habits Beat Budget Apps

Well, hey everybody.

Welcome to Financially Confident Christian Live.

I'm Ralph Estepp Jr. And I'm super glad that you're here today.

This show is for believers who want to grow in confidence with their money.

Now this show isn't about shame.

It's certainly not about pressure and it's not about pretending.

It's real conversations about the fear, the pressure, debt, stewardship and the next right step.

Now today we've got three questions that listeners send in and I'm also encourage anybody who's joined us, please feel free to.

If you're in Clubhouse, you can jump on there and if you want you can send me a question through the chat.

Abby is monitoring that for me.

But we got three questions to really get started today.

We got a mom who's doing everything right.

She's cooking from scratch, one car, no coffee.

If you listen to my show anytime, you know, I, I get on people about those coffee stops and still drowning in grocery bills.

So we're going to talk about that information that we got from her.

We've also got a man who's put money in his 401k for 22 years and he's now wondering if he set himself up for failure.

Talk about that on today's show.

And we've got a new parent trying to make a smart decision for her daughter before an ad makes it for her.

These are real people that are really trying and still feel like there's not enough.

And maybe that sounds familiar to many of you that are listening.

I just want to remind everybody this is a non judgment zone.

You're not alone and you're not too late.

Here's how it works.

If you're on Clubhouse, you can join me here on stage or post in the comments.

If watching you're.

If you're on YouTube, drop it in the chat.

So let's get started by getting started with our first question here.

But before we do that, I wanna invite everybody.

We do have a community site.

It's on Patreon.

I'm not looking for money there, just a place to share information.

We can share wins and we can share struggles.

You can find that by going to financiallyconfidentchristian.com join again.

That's financiallyconfidentchristian.com Join.

Well, let's get right into our first question and we titled this one Tired of everything, right?

And the listener wrote this.

Hey Ralph, I've been listening to Financially Confident Christian for a while now and I finally have a question.

Well, I'm so happy to have A question that's a good thing.

This is what she writes.

She said, I cook everything from scratch.

We've got one car, and I don't buy coffee.

But my grocery bill is still $1,200 a month for four people.

And I don't know where I'm going wrong.

My mom used to save everything.

She saved jars and bags and even twist ties.

I thought she was crazy, but she never seems stressed about money the way I am.

What's the difference between doing what she did and just being broke?

And how do I know if I'm actually being frugal or just struggling?

I'm tired, Ralph.

I'm tired and I'm scared.

Would love to hear your thoughts on this.

Thank you for all you do.

Well, thank you for sending in that question.

What a beautiful question.

What a great question to ask.

And I gotta be honest with you.

When I read your question, it seems to me like you are doing everything right, but you're still coming up short.

And you're making choices that feel like deprivation, and it seems like you're still not feeling like it's working, and you're ashamed to be struggling when you feel like you're already trying everything.

But I want to bring some things to your mind.

First thing is, a $1,200 grocery bill for four people in 2026 is not a character flaw.

That's what things cost.

Groceries now are generally more expensive than they've ever been.

And that's not a failure.

That's just the math of it.

The difference between what your mom is doing and being broke is really a habit.

And a lot of people get stuck right now in apps and systems, and all those things are great, but they don't always answer the question.

Sometimes it comes down to habits and other things that I talk about on the show all the time is automatic, invisible, stacked up habits over decades.

And your mom was doing that.

She picked one habit, like, here's a great one.

She scraped the peanut butter jar.

And my mom used to do the same thing.

She would say to us as kids, hey, there's a little bit left in here.

You don't need another jar.

Because it would say, you gotta get in there with a knife and try to dig that out.

My mom used to do things like save the chicken carcass.

I know it sounds kind of gross before lunchtime talk, but she used to say that she would make broth and make soups and she would cook one meal that became two.

And that's that one habit that leads to Another.

And that's how your mom lived.

Your mom didn't live from a spreadsheet.

She saw it from a different way of looking at the world.

And we found this scripture verse which I think is really apropos for to this discussion right now.

And it's from Matthew, chapter 6, verse 11.

It says, Give us today our daily bread.

Now, notice what it says in that, because I think we really need to key in on this.

Not a year's worth of bread, today's bread.

See, your mom wasn't hoarding.

She was honoring what she had.

And that's biblical posture.

So I want to ask in the chat right now, I see we've got several people that have joined us on Clubhouse.

Thank you so much for joining us.

And I will see.

We'll get to those questions here in a second.

But I want to ask this question in the chat.

What's one old school money habit from your parents or grandparents that you've gone back to or wish that you had gone back to?

I think that's really a great place to start this discussion today.

What's one old school money habit from your parents or grandparents that you've gone back to or wish you had gone back to?

And I'll give everybody a couple seconds here.

If you want to type something in the chat or if you want to throw something onto the Facebook or onto the YouTube live.

Oh, Abby, great.

Great.

Point envelope system.

Yeah, that's something a lot of people.

My grandparents used to use that.

I remember as a kid, I never really understood, what's the point of this?

And my grandmother would get her money out and she would set out all the envelopes on the kitchen T. And I remember my grandfather and I, we used to go fishing and he would always say to me, let me go get the fishing envelope so we could figure out how much we could spend on bait and on that kind of stuff.

I like what Mark said.

My wife will not open a new jar or a new carton until the old one is completely empty.

Yeah, exactly, Mark.

My mom used to do the exact same thing.

And J.R. i got your question.

What's one financial habit you could start this week that would still matter five years from now?

Let's come back to that because I think that is a really good point.

And it kind of talks along the lines of what we're talking about right now?

Well, I found this article, and I want to pivot to this a little bit right now.

We found an article, and this is from buzzfeed.

It was also on Reddit.

And it said old school money habits your grandparents knew.

And we'll put a link to that in the show notes.

But that question we talked about today connects directly to the thread going on around Reddit.

In this particular thing, people were sharing what their grandparents did with money.

And what struck me wasn't the habits were.

It wasn't that the habits were clever.

It wasn't that it was.

Nobody called them hacks back then.

They just called it how you lived.

It was just the things that they did.

There's a ton of people spending money on budgeting tools and they can't even cover their groceries.

And these modern solutions we have assume time and energy that stretched families don't have.

The habits that actually worked have been sitting in front of us the whole time.

So let's get into some of those key habits to really help you save money, because what you're asking about is very specific.

We are living in times when groceries are expensive.

My wife handles the grocery shopping for our family, and every once in a while she drags me along to the grocery store and she gets angry with me because I look at everything and say, I can't believe this is how much this costs, but it's expensive.

Here's the thing I will tell you.

In my professional opinion, cooking your own food is the single biggest money move you can do.

Now, I know that's not the most convenient thing to do.

It takes a little planning.

But where I see most people losing money, you know, the hole in the boat or whatever you want to call it, is eating out all the time, or even ordering out.

That is the key.

Cooking food at home.

Which leads me to the second thing.

You've got to have a plan for a meal.

Plan out your meals.

Think about strategically, what do you need?

Because if you wait to get to the grocery store, you're going to listen.

Grocery stores are designed to make you spend more.

That is the whole point of them.

That's what they do.

So have your meals planned out in advance.

You know the old adage, don't go to the supermarket when you're hungry.

Another good thing.

One commentator in one of these articles called it the cornerstone of everything else, I believe.

And then the other thing they said is use every part of what you buy.

Like I talked about with my grandmother and my mother, using that chicken carcass.

As Mark said, the bottom of the jar.

We're not open up another one until it's empty.

Those leftovers become tomorrow's lunch.

And that's not about poverty.

That's just the reality of where we live.

It's a different relationship with what you have.

Again, like I said, not shopping hungry is a free rule that prevents impulse buys and keeps junk food out of the cart.

Another thing that I would highly recommend is building a deep pantry of shelf, stable and frozen items so you're not scrambling at the last minute.

I think that's one of the biggest things I know when our kids were younger.

Now my son will be 25 actually Monday.

I can't believe he's going to be that old.

And My oldest is 28.

And I remember when the kids were real young, this was a challenge because we had busy lives.

The kids were going here, we were going there.

So one of the things my wife was really good at is building that pantry and planning those meals ahead of time.

Now, there were some quotes from this that I thought were really appropriate for today.

This is somebody said, even when we thought we had no food and needed to grocery shop, my grandma would say, what?

There's tons of food in here?

And she would proceed to make the most comforting meal out wherever we had lying around.

That was from somebody named Desert Sunshine.

13 From Reddit.

Here's another quote.

They said my mother always used all of her food.

If she roasted a chicken, the carcass became chicken broth and chicken soup.

Throwing out food was simply not acceptable.

That was from somebody named NoTransition8293.

And the last one I'm going to talk about is a quote here.

It says, I Drive a 2013 Honda Civic.

The interior is worn and faded, but I have no car payment.

And that's from somebody named some tangerine 1180 for all very good points, which gets me to this point.

Here's my takeaway from all this.

Stop living in shame.

There's no reason to be embarrassed for being frugal.

There's no reason to be embarrassed for cutting corners and making meal plans and doing all that stuff at home.

Because in the end, you're going to be out of debt.

You're going to be sleeping at night, no car payment.

These are all great things.

I've even counseled people.

Sometimes you got to go sell something.

You got to do what you got to do.

They're better for it in the end.

Which is why we go to scripture verse.

Proverbs 13:11 says, Whoever gathers money little by little makes it grow.

And that's what we're really talking about here today.

Little by little things.

A saved jar, a practice, a habit.

That practice becomes a life all right, well, let me take a look at the chat here.

Let's see.

So, Junior, what's one financial habit you could start this week that would still matter five years from now?

I'm going to answer that right now because that's a brilliant question.

I think the biggest single financial habit is to measure where your money's going and have a plan for your money.

And I'm going to be talking about that again in the future.

I'm actually building what I'm going to call a sexy budget program.

A lot of people don't want to talk about budgets, but I'm going to make them sexy, believe it or not, because I think that is the number one thing.

When I talk to people, especially younger people, the number one thing they tell me is, Ralph, I just don't know how to budget.

I don't know how to plan.

And I'm going to talk about specifically how to do that.

But, Junior, to really answer your question, to lean into that, that's the number one thing, is have a plan.

One of the things I'm going to talk about is I think you've got to give every single dollar that comes in and out of your life a job.

It's when they don't have a job that it causes problems.

So thank you so much for sharing that.

It was a great question.

I see Abby put in, my partner loves planning our meals for the week.

Yeah, Abby, I think that's a great point.

Also.

I think if you lay that stuff out, because you can actually build in there, the idea that you're going to have your grocery budget, you're going to have your groceries ready before you even get to the store.

You can buy wisely and you can make smart decisions.

And my youngest son, he's finally figuring this out.

He used to eat out for lunch every single day.

And I said, dude, you're spending so much money doing this.

And he said, dad, here's what I started doing.

He said, I cook a little more at dinner time.

And then what happens?

That's my lunch for the next day.

And I said, dad's great.

How much money have you saved?

He said, dad, he says, I usually spend.

Now he's a big kid.

He's six, seven, I think he's 300 and some pounds.

We call him Sasquatch.

I mean, he's massive, right?

So he can eat some food.

And he said, dad, he says, when I go out to lunch, it's like 20 or $25.

I'm like, well, you're probably eating for two people, dude.

But he says, I'm saving almost $100 a week and on a barber's budget.

That's fantastic.

So those are all things that you can do to help in this situation because yes, groceries are expensive.

I totally get it.

Well, let's move to our second question.

We titled this one 22 Years and in Suddenly Scared.

This was an email from somebody named David, and he put in the subject line 401K.

Millionaires don't exist for people like me.

And this one really hit home for me.

This is a question I get a lot from customers and people on the show that I deal with, said Ralph.

I see all these articles about record 401k balances and I see that there's 665,000 millionaires in fidelity plans, and it feels like I'm living on another planet.

David, I've been on that planet too, my friend.

I totally get it, but let me continue.

He says, my company, Auto, enrolled me in the 401k a few years ago.

I contribute what I can, maybe 6 or 7% when I can afford it, but honestly, I'm barely keeping up with rent and child care costs.

What worries me is this article keeps mentioning people raiding their 401 plans for emergencies.

That's what we're going to talk about here in a second.

He continues, I know I'll have emergencies.

My car broke down last year and I had to put it on a credit card because I had no cash.

If I had a 401 with money I could access, I probably would have taken it out.

So my real question is this.

Are 401ks actually saving people for retirement or are they just delaying the financial crisis until we're older?

Because for people making $50,000 a year, it feels like we're being told to save money we don't have for the future we can't afford.

And that was signed by David.

David, thank you so much for sharing that.

It was really.

Yeah, I really appreciate you sharing that because you've really been honest about a lot of things.

And the thing I'm going to say, David, is you've been doing the right thing for two decades and now you're questioning was it the right thing to do.

And one of the big things that jumps out at me, you had to mention this, but you talked about it.

I feel like you've got money in retirement, but you don't really have any money outside of retirement, which I would call your safety net.

We talk about on the show all the time.

An Emergency plan or emergency fund.

You got to think about that.

Because that can suddenly feel dangerous.

If all of your money is stacked away in the retirement plan, it's great from a tax perspective.

But if you have a car breakdown or a repair to your home or an unexpected medical expense, all those things are, you don't want to go raid your 401k.

And you're right.

I see a lot of people doing that.

People come in to visit me for tax work, and I see they're making distributions from their retirement plans.

And it's a huge tax hit when you do that.

But really what you're feeling is you've been following all the right things, but you're like, wait a minute, Ralph, I think I might be missing something.

So the first thing I want to say is, consistent contributions is not a mistake that matters.

You are doing that the right way.

Here's the problem.

Most people don't even do that.

But you can't use your 401k like an emergency fund.

It was never designed to be.

And unfortunately, I see so many people doing that with their retirement funds.

Here's the thing I want to talk to you about a tax perspective.

Early withdrawals.

If you take money from your 401k before you're 59 and a half, here's the problem.

You get hit with a 10% penalty right off the top.

Add to that federal and state income tax.

And this is no joke, when clients call me, they pick up the phone and say, ralph, I'm thinking about taking money out of my retirement.

What do I do?

I said, well, here's the thing.

You need to understand, it's going to cost you almost 40% in tax right from the beginning.

And then, of course, the other thing, they'll say to me as well, at work, we have this option.

We can take a loan from our 401k, but you got to be careful with that, too.

Because if you take a loan from your 401, number one, you got to pay it back, which is better than taking the money out.

But here's the problem.

If your employer lets you go, if you decide to leave your employee, if the business closes down, you've got 60 days to pay back that loan, or that becomes effectively a distribution.

And that's real money gone.

So if you think about it, if you get hit with a 40% tax right off the top, I call it the haircut, you've tossed 40% of your money.

But so you got to think about building this firewall, and that's the Thing, David, that I think I didn't hear you mentioning in your email, and I think I want to lean into for a second.

You've got to build up an emergency fund so you have the ability to handle the.

That car repair or that emergency medical expense that you weren't expecting.

And it doesn't have to be.

A lot of people get stuck on this.

Well, it's got to be three to six months of income.

Yes.

In a perfect world, that would be great.

I would love for you to get that.

But you can start with $500.

You can start funding $25 a week.

Once you get up to $500, then say, you know what, let me take it to the next level.

Maybe I do.

1,000.

Yes, keep contributing to your retirement account, but you might need to also put money into that emergency fund.

You can't treat your retirement as your only financial resource.

And unfortunately, a lot of people do that.

I see a lot of younger people that do that.

They're like, oh, Ralph, I'm putting 15% into my retirement account.

And I say, that is fantastic.

You will gain benefits from that the rest of your life.

But what are you doing on the side?

What emergency funds are you setting up?

Here's a scripture reading we found for this one.

And I use this one on the show all the time.

It's Proverbs 22.

3.

It says the prudence see danger and take refuge.

But the simple keep going and pay the penalty, which is really all about seeing the danger before it hits, is wisdom.

And, David, you're seeing that and that's why you're asking that.

So here's a question for the chat room.

How do you balance building retirement savings while keeping cash on hand for emergencies?

And.

And what's working for you right now?

So that's the question is how do you balance building retirement savings but keeping cash on hand for emergencies?

And what's working for you right now?

Now you might be saying, ralph, man, I don't have any extra money to put into retirement right now.

So what's working for me is covering the groceries and the fuel prices.

But if you're able to do that, how do you find that balance?

Because that's not easy.

I totally get.

I will just let everybody comment on that and we'll circle back to those comments in a second.

But we actually found an article about this, and this is more of an article about statistics.

When Dave was talking about the millionaires of Fidelity talked about, I said, that's really interesting.

So we found this on Investopedia and it says, how much do people rely on 401 s in retirement?

And it's something that I've really been thinking about because he said there's record balances, there's 665,000 millionaires.

But the story underneath of this is really different.

The headline numbers only describe people who already had access and margin to save aggressively.

Here's the problem.

More than half of American workers.

I'm going to repeat that because you need to hear this.

More than half of American workers aren't in the conversation at all because they don't even have a 401k plan.

They don't have access to a retirement plan.

And that gap between wealthy savers and everyone else is getting wider, not narrower.

Here's some findings from the report.

The median 401k balance at fidelity ready for this.

The median Middle point is $34,400, which means that half of the account holders have less than that.

You want to get more scared, want to get more depressed.

For people approaching retirement age ages 55 to 64 now the median increases.

But here's the problem.

The Median There is $185,000.

But they're thinking their retirement can last 30 years.

Well, do the math.

If you only got $185,000 at age 64 and you expect to live to be 94 now, I think that's great and wishful thinking.

I hope I live to be that long as well.

But you're going to run out of money if you just do a simple math equation.

That's not enough.

You might say, well Ralph, I'm going to rely on Social Security.

Good luck with that.

What's your lifestyle change going to be?

Here's another statistic from the study.

More than half of private sector workers have no access to any employer sponsored retirement plan.

Now of course you might be saying, Ralph, but wait a second, they can go fund an ira, they can do something like that, sure.

But how many people even understand that?

And how many people have the diligence to set aside the money?

See, that's where I think a 401k.

And when my grandparents were working, my grandfather worked at the dupont Company.

Well, the dupont company had a pension.

So my grandfather knew at some point he'd be able to retire and have a pension.

Well, guess what?

Most people don't have pensions anymore.

I'm really worried about this because without a pension you are going to see poverty at a level that is going to be unsurpassed.

Look at this one.

59% Of the annual tax benefit for 401ks goes to the top 20% of earners.

So think about what I'm saying there and listen, 401ks are great tax benefits.

They are fantastic things to do.

If you hear nothing else I say during this section, contribute to your 401k.

I think I talked about that on last week's live show.

But 20% of the benefit, 59% of the benefit, excuse me, 59% of the benefit, almost 60% is going to the top 20% of earners.

The bottom 20%, 3.7%.

What a huge gap there.

And that shouldn't surprise anybody.

This is the issue we have.

We're getting to a point where the middle class is shrinking.

We've got a wealthy class and a less than wealthy class.

I'll use that term because I think that's the right thing to call it.

But this just proves that now there are new rules that allow penalty free emergency withdrawals from your 401k, which sounds great, but here's the problem.

It's a penalty free.

So yes, you're not going to pay the 10% penalty, but you're still going to pay the tax.

So take 10% off, you're still losing 30%.

What you're doing is you're quietly eroding the whole point of saving for retirement.

So as much as you think that 401k is your go to thing to hit in an emergency, it's got to stop.

You are going to leave yourself penniless in retirement if you don't do it.

Now here's some quotes from the article.

It says, and this one says the US Retirement system isn't working for most Americans.

Despite reports of incremental gains, these plans aren't sufficiently moving the needle towards achieving a financially secure retirement for working families.

And that's from an organization called the Pension Rights Center.

Here's another quote from that.

This is from Investment News.

It says automatic enrollment has pulled more workers into plans.

That's a good thing.

But it's also given more people a pot of assets to raid when cash is tight.

And like I said, I see this every tax season.

People who go to their retirement plans and they pull that money out because that's the only assets they have.

Maybe they've already refinanced their house.

I'm assuming they own a house.

If there's any equity in it, they've refinanced their house, sucked all those assets out.

So now they're looking at this retirement statement.

They get once a month or once a quarter, and saying, well, there is money I can use, and I'm not judging them.

But it's not the right place.

It's not the right thing.

You're supposed to be doing it.

Here's another one from Vanguard.

It says roughly What a hypothetical $10,000 investment in 1976 in the Vanguard 500 index fund could have grown to by March 31st of 2026 this year, $2 million.

So here's the thing.

I want to leave with this as we finish up this second question.

The numbers you share, David from Vanguard, are real.

And the math works when you have time and you don't touch it.

See, that's the key to these retirement plans.

The math, the compounding interest, the compounding value of money will work.

But you got to leave it in there.

You can't be taking the money out.

You can't be borrowing against it.

You can't be taking distributions from it.

The problem is most people do touch it because life happens.

We started off today talking about groceries and the cost of living going up so you can have a solid plan, but the execution is where it's breaking down.

And that's the part we don't talk about enough.

We talk about how great it is to have retirement plans and how great it is to be putting money aside.

And I'm hitting the 10%.

I'm getting my employer match.

But if you're going behind it and taking the money out, taking distributions from it, you're not helping yourself.

And that worries me.

Here's our scripture reference for this part.

It's from Proverbs 13:11.

It says, Whoever gathers money little by little makes it grow.

And that's the thing to take away from this particular question.

You got to think in terms of retirement being a gathering a little bit by little, bit by a little bit, and then letting it grow, set it, and forget it.

I've done statistics before where if you start a 401k at a very young age, like 25 now, I'm going to be very transparent.

This is something I did not do a good job of.

I have all the training in the world, a master's degree in accounting, and it finally took a boot in my rear end from my wife at about age 45 to say, Ralph, you need to start thinking about putting money into retirement.

I've got peers who started doing that at 25.

So I started 20 years behind everybody.

So what do I got to do now?

I've got to scramble to get to that same level.

So do that.

Because the people with $2 million and you know these people, they're probably people in your family.

People, you know, they didn't get there by making dramatic moves.

They just stayed in the plan.

And that's the key.

Little by little, let it grow.

Don't touch it.

So here's a question for the chat.

Are you primarily relying on a 401k retirement or are you building saving somewhere else to what's working for you?

So if anybody wants to comment on that, if you have a comment or a question you want to answer in the chat, please shoot that over to us.

We'll definitely answer it on the show.

If not, we're going to move on to our third question for today.

And this one actually is a comment that we got on one of our.

I think it was a post that we had and I think Abby is going to try to post that into the chat, but I'm also going to read it so that those of you who are catching us on audio can still hear it because we do release this as an audio episode as well.

But this is what they wrote.

They wrote, Ralph, I'm seeing Trump account ads everywhere and they're saying $1,000 free for newborns, but I've got a five year old and we just left out also, like is it just free money or do I have to do something with it?

After all, my kid is five.

So if I start saving now for college, that's 13 years away.

And then they ask me the million dollar question, which is better, Trump accounts or 529?

Because everyone keeps saying different things online and I'm too tired to research it.

And then they sign it lol.

Help.

Well, here is your.

And this was from somebody named Christy.

Mom, 24.

And I see Abby just posted that onto the live chat in clubhouse and we'll also post that into the live chat on the online sites.

But I really thought this was an interesting question because right now there's a lot of people being flooded with ads, these Trump account ads, and it makes it harder to make a decision.

And a lot of people are thinking the same thing.

I have plenty of people that came in this taxi and said, ralph, explain these Trump accounts to me.

I don't understand.

I see all kinds of advertisements and people just like you aren't sure if they're choosing between two good options or two tools for completely different jobs.

And I think that's really what we're talking about here.

Honestly, I think that this has been kind of blurred a Little bit.

A new parent who wants to get this right before someone else makes the choice for her.

That's really what we're talking about here.

So here's my practical takeaways.

I don't often say this on the show that I can tell you exactly to do something.

If you have a child that qualifies for the thousand dollars, you take the thousand dollars.

This is a no brainer.

Sign up for the Trump account and take it.

There is no reason not to.

You just have to make sure you open that account through the irs.

You could do it as part of your tax return if you already filed.

You can now go to TrumpAccounts.gov that'll start on July 4, 2026.

What a great day to pick it.

250 Years as a country.

But go there and claim your thousand dollars.

It's free money.

There's no scam here.

Don't leave that on the table.

I talk about this with retirement all the time.

If you're walking down the road, you lean over and there's $100 laying on the sidewalk.

Do you bend over and pick it up or do you keep walking?

You bend over and you pick it up.

You got to do this here.

Don't leave it on the table.

Here's the way these Trump accounts work.

Trump accounts become traditional IRAs when your child turns 18.

They're retirement accounts.

And this is where a lot of people get confused.

The Trump accounts are retirement accounts, they're not college accounts.

So if you wanted to use one of those as an education account, that comes with taxes and penalties.

Now what we're really leaning into here are 529 plans.

If you want to talk about education sake.

So let me just back up for one second.

I feel like I'm jumping ahead here.

If you want to contribute to the Trump account, take the thousand dollars and do it.

That's great.

I think I'm going to talk here in a minute how much you can put into those.

But if you're really trying to save for education, I honestly think the best education, the best tool for education is using a 529 plan.

The reason I love 529 plans is the money that you put in there grows tax free and you can use that money for tuition, for books, for tutoring, even K through 12 costs.

Now up to $20,000 a year comes out tax free.

Now Delaware, where I'm located, doesn't offer a deduction for 529 plans.

But there are many states that do Offer deduction for that.

As I know right now there are no states that offer that for a Trump account.

So in the end the answer isn't one or the other.

As I've said, open the Trump account, take the thousand dollars, let it grow towards retirement, set it and forget it.

That's fine.

But if you're thinking about funding your child's education, open a 529 plan.

We're really talking about two tools from two different jobs.

Which leads me to this scripture verse and I use this one when I talk about planning for your children all the time.

It's from Proverbs, chapter 13, verse 22.

It says a good person leaves an inheritance for their children's children.

And that's really what I think this person's asking about.

You're thinking about two generations ahead for a baby that's a month old.

And that's a wonderful thing.

That is a beautiful thing.

So let me ask the chat right now.

Parents, are you saving for your kids education?

Are you using 529 plans?

Are you using savings account or using something else?

What are you using and why and what's working for you?

I know in my practice I see a lot of people creating these 529 plans.

I see other people that are doing other plans.

But I just want to know from the chat here if anybody wants to participate, what is working for you now and what are you benefiting from it?

And also if you want to throw it out there, if you've got a child, have you taken advantage of the thousand dollar Trump accounts this year during tax season I do about 500 individual tax returns a year.

And I think I might have had three people that even that had any clue what I was talking about.

And I think of those only one person actually was able or decided to take it up on the thousand dollars.

I said listen, this is a no brainer.

And there was actually an article.

You're going to laugh when I tell you the name of the article.

It's from Kiplinger's.

It says Trump accounts are a no brainer if you're eligible.

Thank you.

I could have written we'll put a link to that in the show notes, but it comes directly from this.

It's an honest headline.

Sometimes when you see headlines like wait a minute, that's just clickbait.

No, this is true.

$1,000 Free.

Once you do that, that's a different decision.

The problem is parents are being flooded with ads that skip over the important details about it.

And I want to get into those details a little bit right now because I've had several clients say to me, well, Ralph, these Trump things are fantastic.

The thousand dollars is real.

That's true.

You get the thousand dollars, it's yours, not yours.

It goes into this account that turns into an IRA for your child at 18.

But there is differences in the account structure here and there are trade offs that the ads don't mention.

Here's the first thing.

Families with older kids.

If your kid isn't born in one of the years, and I don't have the numbers right in front of me, there are certain years where your child has to be born.

If your kid's not born in that year, you don't get the thousand dollars.

Here's some big high level stuff.

Trump accounts actually officially open on July 4, 2026.

If you've had children born between 2025 and 2028, you get the $1,000 federal deposit.

But you've got to ask for it.

You can open those through the IRS as part of your tax return.

Or as I said, we'll put this in the show notes.

You can go to trumpaccounts.gov now with these Trump accounts, you can put $5,000 a year into those Trump accounts.

So that's really the Trump accounts.

If you got the money for free, take it.

If your baby's born in 25, 26, 27, 28, like I'm getting ready to have a grandson.

I am super excited.

It's going to be in the next short term.

It could even be this weekend, who knows?

I'm just praying that he's going to be healthy and safe and my favorite daughter in law is going to be great.

Now I say favorite daughter in law because I only have one.

So I'm not offending anybody.

But I am definitely going to tell my son and my daughter in law, go get the Trump account, take the thousand dollars and put it away.

It's fantastic.

It's free money.

But my son, my older son's also a planner.

So we're going to talk about 529 plans.

Now, he's in the military, so there are some nuances to him.

He might have different bills that he can use for paying for things.

We're not going to get into that today.

But a 529 plan, as compared to the Trump account, The Trump account, the maximum contribution is $5,000 a year.

Again, it's just thought as a way to put aside money for your child so that when they turn 18, they've got something.

But the 529 plan allows you to put $95,000 in a single year into that.

So if Grandma or Grandpa or Aunt Sally or Uncle Joe want to put some money aside into your kid's retirement account, or, excuse me, into their 529 education account, they can put $95,000 into that with zero tax consequence for them or for the person who received it.

So these are very different tools at very different scales.

Now, continuing our contrast here, at age 18, that Trump account converts to a traditional IRA.

Now, in the back of your head, start thinking through that a little bit.

So that money's going to grow tax free, which is fantastic.

You're going to get the benefit of compound interest.

And when they turn 18, that money's still going to be in a traditional IRA.

So if they want to take that money out to use it for something, there's going to be a tax consequence to that.

Now, I haven't seen the final registry or the final regulations on this, but is there going to be a 10% penalty?

Now, that said, there are ways to take money out of a traditional IRA for education, for your first home, for hardships, for medical, without paying that 10% penalty, but you're going to pay the tax as well.

Whereas on a 529 plan, those you don't have to pay any tax on at all.

So college withdrawals without penalty are not part of the Trump accounts, but they are on the 529 plans.

Unused 529 funds can now be transferred up to $35,000 into a Roth IRA.

That's assuming that the account has been open for 15 years.

That's a flexibility that doesn't exist with the Trump accounts.

And then it says here in my notes here, children born before 2025 may qualify for a $250 grant through a private donation.

Yeah, they haven't talked a lot about this on the news, but I actually saw this.

There's a people named Michael and Susan Dell.

They are putting money in, sort of the private sector money.

But children born before 2025 could qualify for a $250 grant.

I don't have all the specifics on that.

I don't even know that that's out there.

I think once July 4th hits, we'll see more of that.

That's not $1,000, but it's still worth noting.

Now, I don't know if there are going to be certain requirements based on income or based on age or any of those things, but keep an eye open because Again, if you can get someone to give you $250, hey, take it.

I think that is a great thing.

And Abby, thank you.

Congratulations.

I appreciate you saying that.

Yeah, I don't know that my daughter in law and son are ready for what's fixing to happen.

And my grandfather used to say fixing, that was his term to use all the time.

It's fixing to happen.

But here's some quotes from the articles as we start to talk about the end of this one.

And so $3,000 for newborn makes Trump accounts a no brainer.

The bigger question is whether to contribute more.

Yeah, that's really the key.

This was by JP Morgan Asset Management.

Yeah, take the $1,000.

But then the question is do you put more into that or do you put it into a 529 plan?

There's another thing here by savings for College says 529 plans remain the superior vehicle for college and other educational goals compared to Trump accounts.

I think that's a great point too.

And Fidelity says this open a Trump account via IRS form.

So here we're going to get real into the details.

So if you're listening to this or you're watching this online, here's the form you need to know.

It's IRS form 4547.

Hey, go figure.

Trump is 4547.

Pretty nifty, huh?

Or you can go to trumpaccounts.gov and claim the seed money if you're eligible and then consider that 529 plan for education expenses.

Well, here's my take on the holding.

This is why you tuned in.

Listen, the families who do well with these accounts won't be the ones who reacted to an ad.

They're going to be the ones who slowed down, read past the headlines and made a plan.

That's what our listeners are already doing here.

The person who put this out there, that's what they're doing.

Because Scripture Proverbs 21:5 says the plans of the diligent lead to profit as surely as haste leads to poverty.

So this isn't a time to react.

This is a time to plan.

Because that one difference changes everything.

So think about this.

If you've got young kids, what's one thing you wish someone had told you earlier about saving for their future?

I'm thinking about that for my grandson.

What is some wisdom I can give my daughter in law, my son?

As they're embarking on this, they're going to be in the diaper stage here in the Formula stage, and whatever that looks like.

But what is some guidance that we can give our children and our grandchildren about how to plan for the future?

I think that's really important that we do that.

Okay, So I want to go through and just kind of re.

Go through what we talk about today.

If you're a mom who's tired, your mom's habits weren't embarrassing.

They were working.

So, as we talked about in the first question, that's a great way to save money on your groceries.

Scrape that pan, save that carcass.

Yeah, we're talking about carcasses on this show.

We're talking about chicken carcasses and making soup.

But make it automatic.

Make it that habit that you keep building.

And maybe you're like, David, you got 22 years in your retirement plan.

You didn't do anything wrong.

But add to that, build that emergency fund, start with $500, and then just build from there.

Have that cash outside the retirement accounts, what I call a firewall.

That's what's missing.

And if you're the new mom figuring out accounts, hey, take the $1,000.

You can say, ralph said it.

Give me my thousand bucks, Open that Trump account.

But then if you're thinking about education, open up that 529 plan and put the regular contributions there.

Again, two tools, two jobs.

But do one thing this week.

I never want to overburden you with anything.

So if you're looking to save money on groceries, plan your meals, lay that out, put your budget together.

If you're looking to do the retirement plan and you don't have an emergency fund, do that.

Start with $500.

It doesn't have to be a big amount.

And then finally, if you're thinking about the trumpet, if you got a child that's born this year, go get your thousand dollars.

Just one step.

That's all it takes.

This week, you're not failing in anything you're doing.

You're surviving.

You're starting, and you're making choices, and that's progress.

Now, one of the things I want to mention here is I also do a daily show.

You can catch that every day.

It's not live like this show, but you can go to financiallyconfidentchristian.com.

You can get that wherever you get your pockets.

Now, I can just hear people saying, well, Ralph, be specific.

Even better, go to financiallyconfidentchristian.com and sign up for our newsletter.

Become a member of that.

You can join our Patreon community.

As I said, that's@financiallyconfidentchristian.com Join in the Patreon community.

We put special things over there.

You can ask questions, you can talk about what's working for you.

All those things are great.

Now, don't forget to join me next Friday, same time.

We're going to do this every week.

So if you know somebody that's battling with financial questions, have them come join us live.

They can join on Clubhouse.

They can go to the chat.

That's financiallyconfidentchristian.com FCCLive but how about we end in prayer today?

Lord, I just want to thank you for the people who have joined us today, the people who are listening, the people who are watching.

Lord, I just thank you for their honesty about where they really are.

It all starts with honesty.

It all starts with an assessment of where you are.

And I just want to pray right now for the mom who's exhausted and still showing up.

I know the struggle you're going through.

And for the man who's been faithful for 22 years and still asking if he got it right, Lord, show him that he's doing it right.

And for the new parent who wants to give her daughter something better.

Show her a path for that.

Help them all to break that cycle of financial shame and find confidence in what they're doing.

And remind all of us, Lord, survival is success.

Starting is courage.

Planting together is love.

And just give us one clear next step this week so we can break that cycle of financial shame.

And we ask this in Jesus name.

Amen, friend.

I want to end with this.

Your finances don't define who you are.

It's your courage to make a change that truly matters.

So let's tackle this all together and I'll see you again next week.