Ask Chuck: Avoiding The Paycheck-to-Paycheck Trap

By: Chuck Bentley, Crown Financial Ministries

Dear Chuck,

I read an article recently about how many Americans live paycheck to paycheck and question how many really have to live that way. I don’t want to be calloused, but doesn’t the Bible tell us not to live that way?

Financially Secure

Dear Financially Secure,

Unfortunately, I am all too familiar with people caught in the paycheck-to-paycheck trap for multiple reasons. Many are there due to circumstances beyond their control, including tragic health issues, job loss, unwanted divorces, and basic financial illiteracy.

A key consideration regarding household finances and overall economic well-being is the ability to withstand financial disruptions. A lack of emergency funds is the onset of financial suffering for many. With little or no margin, an unexpected expense or loss of income throws their finances into chaos.

A 2017 report by the U.S. Federal Reserve revealed the following issues that contribute to the paycheck-to-paycheck problem.

Dealing with Unexpected Expenses

  • 4 in 10 adults, if faced with an unexpected expense of $400, would either be unable to cover it or would find it necessary to sell something, borrow from family or friends, or carry a balance on credit cards. (This is an improvement from half of the adults in 2013.)
  • Over 1 in 5 adults are unable to pay their current month’s bills in full.
  • More than 1 in 4 adults skipped necessary medical care in 2017 because they could not afford the cost.


  • 3 in 10 adults have family income that varies from month to month.
  • 1 in 10 adults experienced hardship because of monthly changes in income.
  • Nearly 25% of young adults under 30 and 10% of all adults receive some sort of financial support from someone living outside their home.

Financial Literacy

  • On average, people answer fewer than 3 out of 5 basic financial literacy questions correctly.
  • Lower scores fell among those less comfortable managing their retirement savings.

What To Do

There are emotional stories of those living paycheck-to-paycheck, but, like you, I question how many are willing to change their lifestyles, to adjust priorities, and make some sacrifices to protect themselves from financial disaster.

People rely on debt because it’s easy and “everyone” does it. It is certainly easier to buy a new car with low-interest rates than saving to pay cash. After all, saving means you have to forfeit (or postpone) a bigger house, the latest fashion, a new phone, or eating out; but easy is ultimately the more costly option.

In the long-term, sacrifice has its rewards, and it isn’t all that painful once the decision is made to take control rather than letting the world dictate how to spend money. Learning to discipline oneself eventually becomes a habit and a way of life. Before long, the thought of carrying consumer debt becomes ridiculous.

I think most people who are experiencing the overwhelming burden of carrying credit card debt would tell you the small sacrifices upfront are worth it. If you’re dealing with overwhelming credit card debt, contact Christian Credit Counselors. They can help!

The trick is to develop a mindset of tight control over your income. With a budget in place, progress can be made toward getting people off the financial cliff so they CAN withstand financial emergencies.

Self-control, accountability, hard work, living contrary to the rest of the world, and disregard the availability of credit are some basic steps I recommend to anyone wanting to become financially secure.

Learning to wait is a great discipline. Pausing and praying for a need allows us to see God provide. God wants us to be good stewards of what He provides for our good and for the benefit of others. We are living examples of His goodness and offer hope to the hopeless. When we manage our finances the way He tells us, we have the freedom to live out our purpose and glorify Him in the process.

Debt Counseling

Dr. Anne Bradley with The Institute for Work and Economics summarizes this beautifully:

Good stewardship leads to flourishing, which is characterized by well-being, thriving, and abundance. It is the way God created all things before the fall, as well as what he will restore when Christ returns. In the parable of the talents, Jesus teaches that everyone is to maximize the gifts that he is given in order to contribute to the flourishing of the world (Matt. 25:14-30).

…Each of us is created uniquely by God to contribute something to his kingdom. We have a special opportunity to use our particular interests and abilities to do something significant.

This larger view of stewardship encompasses every aspect of life. That job that one takes, where you live, how many children you have, and where you send your children to school all involve stewardship. Those options require us to make choices with our scarce resources, as each tradeoff presents us with a cost and becomes part of the calculus of stewardship. Our efforts can bring delight to us and to the Lord and allow us to serve the common good.  

So let’s not disparage those who are struggling to make ends meet. Let’s work to help them discover and understand that God has a better way. Ultimately, we not only want to see them get out of the pain and stress of living paycheck to paycheck but to be prepared to stand before the Lord and hear Him say, “Well done, thou good and faithful servant. Enter into the joy of your Master.”

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6 Tips for Spring Cleaning Your Finances

By: American Bankers Association (ABA)

With the arrival of spring, consumers are encouraged to add a very important item to their spring cleaning to-do list: organizing their finances. As you kick off the spring season by cleaning, sorting, and tidying up around the house, don’t forget to rearrange your financial house.

“Spring is the season of renewal, which means it’s time to sweep away your winter bills and tidy up your spending habits,” said Corey Carlisle, executive director of the ABA Foundation. “Taking time to balance your budget today will set you up for sunny financial days throughout the rest of the year.”

Here are six tips to help you organize your finances:

  • Review your budget.

A lot can change in a year. If you’ve been promoted, had a child, or become a new homeowner or renter, be sure to update your budget. Determine what expenses demand the most money and identify areas where you can realistically cut back. Develop a strategy for spending and saving – and stick to it. In addition to the “Budget Boss” webinar available on our website, our trusted partner, Budget Ninjas, offers a multitude of budgeting tools and resources for free.

  • Evaluate and pay down debt.

Take a look at how much you owe and what you are paying in interest. Begin paying off existing debt, whether that’s by chipping away at loans with the highest interest rates or eliminating smaller debt first. Contact your Account Specialist at Christian Credit Counselors to add any new or existing debt that you may have left off the program to your debt consolidation plan.

  • Set up automatic bill pay.

By paying recurring bills automatically on the same day each month, you’ll never have to worry about a missed payment impacting your credit score. Plan out your automatic payments to ensure your checking account has an adequate amount of funds when the payments are scheduled to be withdrawn.

  • Save for emergencies.

About 40% of Americans are positioned to cover a $400 emergency expense. You can prepare by opening or adding to a savings account that serves as an “emergency fund.” Ideally, it should hold about three to six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car.

  • Go digital.

Sign up for e-statements, paperless billing, and text alerts. Converting to paperless billing will help keep your house—physical and financial—more clean and organized, and will help protect you from fraud. Manage your money on the go. Utilize your bank’s mobile app to check your balance, pay your bills, transfer funds, deposit a check and send money to friends from wherever you are.

  • Check your credit report.

Every year, you are guaranteed one free credit report from each of the three credit bureaus. Take advantage of these free reports and check them for any possible errors. Mistakes can drag down your score and prevent you from getting a loan, or cause you to pay a higher than necessary interest rate.

“People are motivated to get things done when the weather warms up and the flowers bloom, which makes it an ideal time to look closely at your savings and spending habits. Putting in the work now will help you live your best life in the months ahead.”

Corey Carlisle, ABA Foundation
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Ways to Improve Your Financial Capability Now

By: America Saves

Are you ready for National Financial Capability Month? Here are three actions you can take now to make sure you are prepared for any financial disaster, big or small.

1. Have a Disaster Plan for Your Finances.

Sure, you keep bottled water, canned goods, flashlights, and batteries close at hand, but you should also have a disaster plan in place for your finances. The first step is building and maintaining an emergency fund. Saving is the best financial defense against disasters. A little bit at a time can go a long way. Then you can make sure the rest of your finances are in order.

The Federal Emergency Management Agency (FEMA) has an Emergency Financial First Aid Kit (EFFAK) that is great for identifying all your important financial information and then helping you keep track of it. The EFFAK also provides advice on managing finances, offers insights on dealing with credit scores, and describes what to expect should a disaster strike your community. All of this will help your family prepare today for both the big incidents and minor emergencies.

2. Check Your Financial Well-Being.

Just like you should go see a doctor once a year for a check-up, so too should you assess your financial wellness. Like your health, you should assess your savings annually to make sure you are saving for all the right things. Evaluate the status of your savings to see if you are saving adequately and create a savings plan. Start saving automatically by setting up automated regular transfers with your bank or credit union so your savings will increase each time you get paid. Automating your savings can take the guesswork out of reaching your savings goals.

The Consumer Financial Protection Bureau (CFPB) has a nifty tool that lets you take a ten question quiz that not only evaluates your financial well-being but also compares you to other Americans in your age group. Then it suggests ways to improve your score and where to find help.

3. Make Sure You’re Properly Insured.

Review your insurance coverage. Most homeowners and renters insurance policies do not cover flooding, so you may need to purchase a separate policy from the National Flood Insurance Program. An inch of water in your house can cause $25,000 of damage and 20% of flood claims come from areas outside of flood zones. Think because you’re a renter you don’t need insurance? If you don’t have renters insurance, and you lose your personal property to theft or disaster, you will have to replace everything out of pocket.

Let America Saves help you save money. It all starts when you make a commitment to yourself to save. Take the first step today and take the America Saves pledge to save money, reduce debt, and build wealth over time. And it doesn’t stop there. America Saves will keep you motivated with information, advice, tips, and reminders to help you reach your goal. Think of us as your own personal support system.

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