Budgeting, Finance, Money Management

Ask Chuck: How to Budget for the Dangers of Inflation

By: Chuck Bentley, Crown Financial Ministries

Dear Chuck,

We tried to live on a budget when we first got married but didn’t stick with it. Now that we have children and are feeling the pain of rising gasoline and groceries, etc., we need to get disciplined with money! Can you help us? 

Budgeting for Inflation

Dear Budgeting for Inflation, 

We are all having to navigate the dangerous challenges to our finances caused by inflation. To help you get serious about your budget, I reached out to Steve Brooks at Dedicated Money Management. Steve is a dear friend who served on staff with CRU for 21 years and Crown for 27. He has been a trained budget coach for over 20 years, helping tens of thousands of people manage money from a Biblical perspective. He answered a number of questions that will help you get on the right track. 

Why don’t more people live on a budget?

Steve: I think there are three main reasons why people do not stay on their budgets:

  • They have wrong money beliefs.
  • They have poor money behaviors.
  • They don’t have a simple budgeting tool.

I teach my clients that God is the Owner of all that they possess. They are stewards of His money and possessions. If they do not get this right, they will never become “good and faithful stewards” of God’s money and possessions. If I do not have a spending plan (budget), I am probably spending God’s money the way I want to spend it instead of the way He wants me to spend it.

What is the best way to get the right perspective on budgeting? 

Steve: I ask my budget coaching clients two important questions:

  1. How would you act if I hired you as my money manager/steward?
    • Would you spend my money any way that you wanted to?
      • If you did, I would quickly remove you from your money-managing responsibilities!
    • Or would you ask me how I want you to manage my money?
      • This is the appropriate thing for a money manager/steward to do.
  2. Since God has hired you as His money manager/steward, how should you act?
    • Should you spend God’s money any way that you want to? 
      • If you do, He might remove you from your money managing responsibilities. This is what happened to the shrewd and dishonest steward in Luke 16.
    • Or should you ask God to show you how He wants you to manage His money? 

This is the appropriate thing for a money manager/steward to do.

Do people need special skills to make this work?  

Steve: I want my clients to become “budgeters,” not “accountants.” The difference is that budgeters check the category balance throughout the month before making a purchase to make sure they have enough money set aside for that purchase. 

What tools do you recommend? 

Steve: Choose a budgeting tool that works best for you.

  • Cash envelopes 
  • Paper and pencil 
  • An Excel spreadsheet
  • A computer program (Quicken, QuickBooks, etc.)
  • A budget app that can be accessed on a cell phone to check a category balance before making a purchase. Some examples are You Need a Budget (YNAB) – the one I like best, Mint, Every Dollar, or Calendar Budget.

What about those who say they don’t make enough to budget? 

Steve: If one is unable to live on a budget because income is too low, consider these options: 

  • Look at every spending category in the budget, and ask yourself: Can this category be eliminated or lowered? Is it a necessity?
  • Sell stuff you no longer need or want. Use the income to fund short- or long-term savings goals. For example, if you sell an item for $500, you might consider funding your vacation with this money instead of setting aside that money monthly.
  • As a last resort, you might consider starting a side business or working part-time to earn additional income. I have clients who have become Uber Eats drivers temporarily to fix holes in their budgets.

What are the behaviors needed to budget well?

Steve: This is a great question and an important one to make the budget work well! 

  1. Keep your budgeting tool updated. 
  2. Check it before making a purchase.
  3. Accelerate debt repayments.
  4. Be generous toward God’s work in the world.
  5. Save for future expenses.
  6. Invest part of your income.
  7. Husbands and wives, make financial decisions together.
  8. Refer to the Crown Money Map when making financial decisions.
  9. Seek counsel from the Bible and Godly family and friends.
  10. Be completely honest and trustworthy.
  11. Teach/train others to be faithful stewards (multiplication principle).

What are the beliefs that you want your budget coaching clients to know and believe?

Steve: All of these are Biblical principles that I can summarize: 

  1. God is the Owner, and we are stewards of HIS possessions and money.
  2. Debt is bondage and should be avoided.
  3. We are to be givers (generous) rather than getters (consumers).
  4. We are responsible to teach/train others to be faithful stewards.
  5. We are to seek counsel from God and others when making financial decisions.
  6. We are to save and invest our money to meet needs and to build God’s Kingdom.
  7. We are to work hard for the Lord in our God-given areas of strengths and talents.
  8. We are to be absolutely honest.

Thank you, Steve

General Principle to Follow

Since overall inflation is estimated to be between 8–10%, I suggest you reduce all spending by the same amount to ensure you are keeping up. You also need to increase your emergency savings, as you are able, to ensure you can navigate any disruptions to your income should inflation hurt your job or career. 

Hopefully, these ideas will set you on a course to develop your budget, stick with it, and navigate the rapidly changing effects of inflation on your finances. If you want help creating and staying on a budget, reach out to Steve today, or contact Crown to enroll in our Budget Coaching Program.

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Activities, Budgeting, Holiday Tips, Money Management

7 Ways to Ensure a Great Staycation

By: MoneyWise

Inflation and gas prices may have pushed a traditional vacation out of your budget. But that doesn’t mean you still can’t enjoy time with family and make some lasting memories.

A staycation is an at-home vacation. Staycations reduce or eliminate common expenses related to vacations—gas, hotel, and food. Staycations have become a popular option for a budget-friendly time away from work.

Are you considering a staycation this year? Here are seven ways to ensure a great time:

1. Set objectives for your staycation.

What do you hope to accomplish during your staycation? Objectives are not equivalent to what you will do. What you will do should be a means to an end. Before considering what you will do during your time away from work, think about more significant outcomes. Do you desire to make some memories with family? Do you desire to rest? Do you desire to grow spiritually or help your children grow spiritually? Setting objectives can provide guidance and purpose to your staycation plans.

2. Make a plan.

It’s easy to procrastinate staycation planning. Because you are staying at home, the need to plan doesn’t seem as urgent. However, not planning is a sure way to get frustrated during or after the staycation. Without a plan, routines tend to take over and the time at home starts to feel less like a vacation. A lack of planning also reduces the anticipation of a staycation. When planning, consider your objectives. Make a schedule that best accomplishes those desired outcomes.

3. Take advantage of special events.

Good staycations create a break from the normal, even when staying local. While planning your staycation, look for special events, activities, and concerts taking place during your time away from work. These special events can bring added excitement, fun, and a flair to the familiar during your staycation.

4. Do something you’ve wanted to do for a while.

Have you wanted to see something or do something in your hometown for a while? A staycation is a great time to do activities or see areas you would not normally do or see. If you have been talking about doing something for a while, make sure to include it in your staycation plan.

5. Take a day trip.

Yes, you can get out of town during a staycation. More than likely, there are a few fun day trips you could take. Consider including one or two-day trips during your staycation. Granted, this will increase gas costs. So, budget accordingly.

6. Spend more money on entertainment than food.

For families, food is a big vacation expense. During the staycation, determine to significantly reduce your food costs. Breakfast can typically take place at home. Depending on the day’s plans, bringing a cooler filled with sandwiches, chips, and drinks can create a low-cost lunch. Dinner can take place at home, or you may choose to eat out, depending on your budget. If you do choose to eat dinner at home, consider having foods you would typically eat on vacation—pizza, hamburgers, ice cream, etc.

7. Plan a few splurges.

Craft a staycation budget that allows for a few splurges. Consider splurging on experiences instead of food. Experiences usually create longer-lasting memories than meals at an expensive restaurant.

Enjoy your time away from work in a cost-effective manner. Set your staycation objectives and plan accordingly. Make some amazing memories without making a bunch of debt.

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Budgeting, Finance, Gas, Money Management, Saving

How to Deal with Inflation and Rising Costs

By: MoneyWise

The latest Consumer Price Index was released today, posting an 8.6% annual increase in May. That’s the highest increase the U.S. has seen since 1981. More importantly, it tells us that goods and services are becoming more and more out of reach. Reports have shown that these increases have already slowed discretionary purchases. Basically, that tells me there’s a lot less vacation and leisurely spending going on right now.

Our regular contributor and Compass Australia founding member, Gwenda, touched on saving the other day. And in times like this, I think it bears repeating: “The Bible encourages us to save and is loaded with great practical advice.”

That’s from the last time we heard from Gwenda. And as prices rise, we’re reminded of just how much wisdom God’s Word contains. Not everybody feels the effects, but many of us do. And one thing to weather it is to do exactly what the Bible says. As Gwenda mentioned, there’s a saying: “Save for a rainy day.” A step further, Proverbs 21:20 says that the wise save for the future, but the foolish spend whatever they get.

Sometimes, it can be hard for us to save when we don’t know what we’re saving for. But if the cost of just about everything is going up and it’s affecting you, this is the case in point for why the Bible tells us we must save. Having savings set aside right now would help weather rainy days like this.

If you’re asking how would you save, here are a few ways to get started:

  1. Make it automatic – Gwenda mentioned the automatic savings plan, as well. It’s an amount you decide and set up typically through your bank.
  2. Budget – Another recommendation by Gwenda. But don’t let this word scare you.
  3. Cut Back – I consider this separate from budgeting because the way I see it, just because I budget or plan for something, it doesn’t mean it’s necessary.

An automatic savings plan encourages you to save first, spend second. If you tithe and “pay yourself” first, you’re required to work with what’s left. A much better formula for putting more aside than if you were to spend first, save second. Saving whatever’s left over usually encourages more spending.

“Budget” is just a technical term for telling the money where to go, not the other way around. And when I say cutting back is separate from budgeting, here’s what I mean…

In our budget this month, my husband and I have planned to spend no more than $150 on dining. How much of that has to be spent, though? Well, the answer is $0.

We have to eat, but we don’t have to do that by going out to restaurants or taking out. This is my point: If you study your budget, chances are you’ll find one or two categories that either can be reduced or don’t need to be there at all.

The Building Your Finances God’s Way financial discipleship study dives even deeper into the concept of saving and much more. I encourage you to sign up for a study right here. Because it’s not just about weathering your storm.

Putting these three things into practice helps us become better financial disciples: One who can live in contentment, knowing no matter what, God provides; who can live life applying finances God’s way, giving cheerfully and with the assurance that it shall be given unto them, pressed down, shaken together, running over (Luke 6:38); and who shows others how to do the same and that there’s a reason why faith and love get us through anything and everything life throws our way.

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Activities, Budgeting, Money Management, Saving

Ask Chuck: Help Me Get Our Spending Under Control

By: Chuck Bentley, Crown Financial Ministries

Dear Chuck,

We have to cut our spending this year, but I really don’t know where to begin. When I bring up the subject, my spouse always has an excuse. If we don’t get things under control, we are going to face eviction from our landlord. 

Cash Crunch

Dear Cash Crunch,

I’m so glad that you wrote to me and are ready to make some big changes. My hope is that if you set a clear direction, your spouse will be inspired to join in the effort. Forced eviction is devastating emotionally; it is expensive and wrecks your credit score. Let’s work hard to avoid it!

Some of the obvious ways to reduce spending include eliminating the big expenses, like a car payment or rental/living costs in excess of 40% of your net spendable income. Look at both of those expenses closely, and determine if you need to make any changes. If not, there are some not-so-obvious ways you can save money each month that really add up over time. Cutting what seems like a necessity may seem impossible, but over time, the sacrifice will prove rewarding. Here are a few examples I want you to consider.

Do You Really Need Amazon Prime?

Membership fees jump for new members on February 18th. Renewals take the hit on March 25th. The annual cost will be $139/year plus taxes or $14.99/month plus taxes. An alternative is to keep a shopping list until you reach a total that qualifies for free shipping from Amazon or other companies. You may have limited shipping options, but this leads to better planning and less impulse purchasing. You can also use Amazon gift cards to limit spending since a credit card is not linked to your account.

Do You Really Need That Streaming Service?

According to The Streamable, in 2021, the average viewer had five or more subscriptions. The top five include Netflix, Amazon Prime, Disney+, Hulu, and HBO Max. In May 2021, Bloomberg reported that the average streaming consumer spends $40 per month. That comes to $480 per year! Different streaming prices can be seen here. The average cost of cable TV comes in at $64 but can run from $11 to $127 or more per month.

Do You Really Need Audible or Spotify?

Free audiobooks are available via Overdrive and Hoopla with a library card. Spotify and other small monthly fees that seem insignificant can really add up. Nothing is too small to eliminate to help you avoid eviction!

There’s More

Look at your spending with a critical eye. What could you realistically eliminate? What are your real needs? What do you need to reprioritize? Small daily purchases can add up quickly.

Analyze what is spent on subscription services, fast food, coffee, bottled water, shoes, clothes, gym membership and gear, house plants, manicures, pedicures, tattoos, haircuts and color, lottery tickets, toys for children, etc.

Challenge

Ask your spouse to join you in tracking all spending for the next 30 days. When Ann and I did this years ago, we found that recording each dollar spent made us more aware of our actions. We realized that we had some costly habits. Write down your expenses. Don’t leave anything off your list so that you know where your money is really going.

After 30 days, come together and share what you learn. It may only take a few days before a heightened awareness sets in. Prayerfully discuss what you could sacrifice for six months or a year. I suggest you gently educate your spouse on the long-term benefits. Can you agree to get the help of a mentor or come under the accountability of trusted friends? How about planning a reward when reaching your goal? You can likely cut back on your spending by 25% by just changing some of your habits.

Once you get your spending under control and avoid eviction, there are many other reasons people decide to better manage their money. Reduced spending builds the habit of saving, and with the help of automatic deductions, people learn to live without. The possibilities can include:

  • Building an emergency fund
  • Paying off debt
  • Saving for retirement
  • Giving more generously
  • Having funds for vacations, a move, a business, education, holidays, births, deaths, etc.

Years ago, a woman confided in my wife that she was tired of her husband limiting her spending. She felt like she was being treated as a child. Ann listened and then asked, “Have you considered the possibility that he loves you so much that he wants to protect you and save for your future together?” The thought had never entered the woman’s mind. It changed her entire perspective and opened the door to healthy dialogue about their finances.

We enter marriage with a philosophy of money. Most often, we marry an opposite. The goal is uniting around God’s principles regarding our finances. Pray about how to lovingly communicate with your spouse. Treat him/her with respect and love so you can make progress. My desire is to see God’s people free and marriages united, strong, and thriving. We must recognize the errors in what the world has taught us about finances and have our minds renewed by God’s truth. Consider this effort to lead the way out of this crisis the best gift you can give your spouse.

If credit card debt is a source of frustration in your marriage, consider contacting Christian Credit Counselors. They specialize in assisting people with getting out of debt and on the road to financial freedom, and they are a trusted source of help.

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Budgeting, Goals, Money Management, Personal Goals

7 Steps to Achieving Your Financial Goals This Year

By Daniel Rodriguez | Dr. Budgets

Another year has come and gone, and last year’s goals are now in the history books. So how did you do? If you want some guidance in achieving your financial goals this year, then read on! Below are 7 steps to achieving your financial goals this year:

1) Be SMART. No, I’m not talking about intelligence. The first step to achieving your goal is to set a strong financial goal that is SMART (Specific, Measurable, Achievable, Relevant, Time-Bound). In order for your goal to be strong, you have to really want it (do you have a strong emotional attachment to your goal?). Once you are emotionally invested in your goal, then being SMART with it will strengthen it even further.

2) Know Your WHY. Take some time to determine WHY your goal is so important to you. For example, my wife and I have a goal of moving from our condo to a single-family home in four years because our baby girl (on the way) and future unborn kids are very important to us. We want to raise our kids in a place that is large enough and located in a great school district because family, education, and stability are a top priority. Knowing the WHY behind your goal will help keep you on track when you stumble (and believe me, we all stumble!).

3) Find the Money. Once you have your goal and you know your why, then you need to consistently put money toward your goal. To do so you need to be aware of where you are currently spending your money, and then find savings within your current spending that can be used to fund your goal. One of my favorite tasks as a Dr. Budgets money coach is to find the savings within my client’s current spending that allows them to achieve their financial goals. The key is to keep spending money on what is important to you and cut spending in the areas where you receive very little value from your money.

4) Build A Plan. Now that you have all the facts and figures of your current spending and have determined where the money is going to come from to fund your goal, the next step is to build a spending plan that coincides with your SMART goal. This is also when you may have to adjust the “T” portion of your SMART goal based on your findings from Step 3.

5) Monitor Your Progress. Having a plan is worthless if you don’t follow it. Monitoring your progress and making adjustments along the way is critical to successfully achieving your goal. If you don’t know how you are doing, then you will be flying blind. When I coach my clients, I track their spending and monitor their progress toward their goals, which greatly increases their probability of success.

6) Celebrate! Setting some milestones (or mini financial goals) along the way toward your ultimate goal, then celebrating and rewarding yourself when you hit those milestones, makes your journey much more enjoyable and will help keep you motivated. So think of some experiences or things that you want, then use those as rewards for when you hit your milestones. Also, remember to celebrate when you do achieve your ultimate goal. This is an area where I have had trouble in the past, but I’ve been getting better at rewarding myself, which has made it more fun!

7) Repeat. Repeat Steps 1 – 6 for your next financial goal. I do recommend you limit the number of goals to a maximum of three. Ideally, you want to focus on just one financial goal at a time.

These are my 7 steps to achieving your financial goals this year. I hope you find these steps helpful as you start off the new year. What is your top financial goal this year? What will you do to achieve it? Wishing you a great start to the year!

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Budgeting, Debt, Money Management, Personal Goals

Ask Chuck: Help My Financial Anxiety!

By: Chuck Bentley, Crown Financial Ministries

Dear Chuck,

My husband and I are both working adults. With 3 kids at home and trying to care for some extended family here and abroad, I am increasingly struggling with financial anxiety. Now the holiday pressures are making it worse. Please help me deal with this! 

Family Financial Stress

Dear Family Financial Stress,

You obviously have a big heart…maybe bigger than your budget can afford.

The Bible says that we are to provide for our own immediate families (1 Timothy 5:8). This is a responsibility that the Lord has entrusted to us. When you add extended family members, here and/or those living in a different country, it is no wonder your stress is great.

Immigrants or children of immigrant parents face pressures that differ from many in the general population. Learning the language, navigating the culture, and the burden to succeed create tremendous stress. In my travels, I have seen how parents in some nations sacrifice greatly to give their children an excellent education. Once in the working world, these children are then expected to sacrifice for their parents. The pressure for a couple to support four aging parents along with their own children can be financially and emotionally crippling.

Financial Anxiety

Researchers at the Global Financial Literacy Excellence Center at George Washington University and the FINRA Investor Education Foundation found that prior to Covid-19, more than half of American adults experienced financial anxiety. The report shows that anxiety occurs in thinking about or discussing money. (This is without the very real pressures you and your husband are shouldering.) Women, young adults, those with financial dependents, and those who are low-income, unmarried, and unemployed feel most anxious. Respondents reported that too many expenses and monthly bills, especially medical expenses, were major factors contributing to high anxiety.

My Advice

First, establish a budget that primarily takes care of your immediate family. Meet with your husband, and discuss the appropriate distribution of the surplus funds that you discover in your budgeting process.

Next, set priorities for whom your budget will allow you to support, and then, determine how much can be allocated to them as the Lord provides.

Communicate to those whom you may not be able to support on a regular basis that you are sorry that you cannot continue. Let them know that you will help them establish a budget, and encourage them to try and take care of their needs themselves.

For those that may be totally dependent on your financial support and are unable to work or care for themselves, set some goals for what you may be able to do should the Lord provide an increase in your income, but live within your budget without compromise.

Make or improve your plan. If grandparents are living with you, possibly they can be asked to make some contribution to the needs of the family, like babysitting, doing household chores, shopping for discounts, cooking, cleaning, or running time-saving errands. Don’t rule out that some family members may be capable of generating income under the right circumstance or opportunity. A friend who operates an online business has his parents that live with them answering emails, praying with customers, and even filling orders.

Consider creative ways to give meaningful gifts that do not cost money. Often, a handmade card, a day spent together, or a poem or song will convey your love far more than a gift that comes in a box.

Reduce Financial Anxiety 

God’s Word gives us financial principles for our good. When we fail to know and live by God’s financial principles, we actually create circumstances that increase our stress. He also told us how to deal with anxiety. Here are some tips that have helped me:

  • Acknowledge Him as your Provider. He is a God of abundance, and He is faithful.
  • Live one day at a time. That means to keep your mind and emotions on today. Matthew 6: 25-34
  • When you are afraid, learn to pray and seek God’s guidance.
  • Cast your cares upon the Lord.
  • Practice gratitude. Give thanks to the Lord for three things every day. Philippians 4:4-9

The key to breaking the anxiety loop is faith exhibited by a deep trust in God’s character and an assurance of His promises.

Faith is a muscle that grows under tension. It is an exercise that must be practiced. Remember the words the apostles spoke to the Lord? “Increase our faith!” (Luke 17:5 ESV) Or, remember the father who brought his boy with an unclean spirit before Jesus for healing? “I believe; help my unbelief!” (Mark 9:24 ESV)

Invite the Lord to intervene and give you peace in the midst of your trial. Ask Him for wisdom to make the right decisions and the words to talk winsomely with your family.

If your pain is from debt, stop all borrowing. Are you in need of a raise? Improve your skills, meet with your boss, and ask for feedback on how to qualify for an increase. Have you mishandled money in the past? Get on a crisis budget, and ask all family members to help.

Crown has many free online courses available to guide you, like budgeting tools and career assessments. Also, if debt is a problem, Christian Credit Counselors is a trusted source of help.

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Consumer, Holiday Tips

Supply-Chain Chaos: Holiday Edition

By: Robert Briones, Thrivent

The supply chain is the network by which products flow from the factories of suppliers to the inventories of retailers so they can ultimately be purchased by consumers. Corporate supply chains have been under pressure since the pandemic began, but the stress intensified in the latter months of 2021, with demand for goods surging and the holiday season fast approaching.1

The California ports that receive about 40% of U.S. imports are now operating 24/7, but workers still can’t keep up with the rush of container ships arriving from overseas. In mid-November, there was a record backlog of vessels waiting offshore for more than two weeks to unload their cargo.2 Other U.S. ports are also congested, and severe shortages of truck drivers and warehouse workers have further slowed the distribution of goods throughout the nation. These bottlenecks held up finished merchandise, as well as the inputs and raw materials needed to manufacture products domestically.

Compounding supply-chain issues have been increasing freight and labor costs, delaying shipments, and leaving consumers with higher prices and fewer options since the spring of 2021. As summer turned to fall, logjams remained and time was running out, raising fears that U.S. retailers would not have sufficient inventories of goods to meet consumer demand during the holidays.

The good news is that many businesses responded nimbly to challenging conditions, and some consumers have been proactive, too. Here’s a glimpse into how these kinks in the supply chain might affect your holiday shopping in 2021.

Are Retailers Ready?

Many of the nation’s largest retailers anticipated problems and went to great lengths to ensure that shelves would be well-stocked with a robust variety of goods in time for the holiday shopping season. In many cases, this required paying much higher freight costs to charter their own smaller ships or cargo planes so they could bypass clogged ports and make up for production delays.3

Such costly measures are usually not an option for smaller retailers, which could put them at a disadvantage. In a November survey, 48% of small businesses reported that supply-chain disruptions are having a significant negative impact on their holiday sales.4

Expecting enthusiastic consumer demand, the National Retail Federation forecast record holiday spending of 8.5% to 10.5% above 2020 levels. But retailers have also warned consumers that sporadic product shortages and shipping delays would continue and perhaps worsen later in the season.5

Poised to Spend

U.S. retail sales rose 1.7% in October, a surprisingly strong showing and the third monthly increase in a row.6 The potential for a more limited selection of some types of products has been widely reported, and it seems that consumers are paying attention. According to an annual NRF survey, a record share of consumers (49%) started their holiday shopping before November, and 36% did so to avoid missing the chance to buy key holiday items.7

U.S. households have extra money to spend this year after amassing about $2 trillion in excess savings during the pandemic. This was largely due to historic levels of economic relief provided by the federal government, along with fewer spending opportunities due to lockdowns.8 The recent rise in consumer spending bodes well for retailers and economic growth, but heavy demand also weighs on the supply chain and pushes up prices.

A Season of Inflation

Unfortunately, escalating prices for holiday gifts and basic needs could prompt the loudest “bah humbug” of the 2021 holiday season. With businesses paying more for the raw materials, packaging, labor, transportation, and fuel needed to produce and distribute products, a portion of the additional costs are being passed on to consumers.

Measured by the Consumer Price Index (CPI), prices across the U.S. economy increased 6.2% during the 12 months ending in October 2021 — the highest inflation rate in nearly 31 years. Grocery prices (food at home) rose 5.4% year over year, while prices for the category that includes meats, poultry, fish, and eggs spiked 11.9%.9

Energy prices overall have climbed 30% since October 2020, and the natural gas that keeps many homes warm and cozy increased 28.1% year over year. Gasoline prices rose nearly 50% over the prior 12 months, slamming the budgets of households who plan to drive to family gatherings over the holidays.10

Because supply-and-demand shocks have driven these sharp price increases, some economists still believe they are temporary and that inflation will moderate in 2022 as supply constraints ease.11 Of course, even short bursts of inflation can be especially painful for consumers with lower incomes and little or no savings, and no one knows for certain how long prices might stay elevated.

Shop Early or Be Flexible

On top of being more expensive, some in-demand products could be hard to find, and transportation bottlenecks aren’t the only issue impacting supplies. A global shortage of semiconductors, or computer chips, is limiting the production of all kinds of electronic devices, including cars, home appliances, laptops, smartphones, TVs, and gaming consoles. The availability of some brands of sportswear, shoes, and accessories could be affected by a COVID outbreak that shut down factories in Vietnam. Other reported shortages include jewelry, some popular toys and books, frozen turkeys, cardboard boxes needed for shipping, and Christmas trees, both real and artificial.12

If you need certain items for entertaining or have family members with specific gifts on their wish lists, it could be risky to wait until the last minute to buy them. Otherwise, shopping locally, being open to alternatives, and giving cash or gift cards to be spent later might end up being your best options.

Projections are based on current conditions, are subject to change, and may not come to pass.
1) Consumer Reports, October 20, 2021
2) Bloomberg, November 13, 2021
3) The Wall Street Journal, October 10, 2021
4) National Federation of Independent Business, November 3, 2021
5, 7) National Retail Federation, November 16, 2021
6) U.S. Census Bureau, 2021
8) Bloomberg, November 16, 2021
9-10) U.S. Bureau of Labor Statistics, 2021
11) Moody’s Analytics, November 18, 2021
12) CBS News, November 18, 2021
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Budgeting, Debt, Money Management, Saving

Ask Chuck: Time to Get Out of Debt?

By: Chuck Bentley

Dear Chuck,

I have been steadily paying down debt, and the end is within sight. I’m due a sum of money for the sale of some real estate and wonder if I should pay off the remaining debt or save it. Seems like a good time to be debt-free. What would you do?

Almost Debt-Free

Dear Almost Debt-Free,

I can think of only a few reasons why you would not go ahead and become debt-free if you are able. Of course, I don’t have your full financial picture, so I will try to give you a few things to consider as you come to your own conclusion.

Shifting Sands

There is a lot of uncertainty in the world right now. Covid-19 has created stress in many areas of our lives. A Pew Research Center survey reports that half of the non-retired adults say the economic impact of Covid-19 will make it harder to achieve their long-term goals. There are medical and financial pressures along with rising mental health issues. Add to that inflation, the instability in Afghanistan, forest fires, flooding, the possibility of a stock market, and real estate bubble… Need I go on?

A major benefit to being debt-free is that you will be in a much stronger position to weather the economic storms we may face. If your overall picture is good, then pay off all the debt. But, there is more to consider first.

A Safety Net

It is great to be debt-free, but uncertain times also require that you have savings available for emergencies. You want to avoid ending up in the same position six months from now. Therefore, I suggest you give a portion, fund an emergency account, and then apply the rest to debt.

Have you ever done the limbo? The object is to get under a bar without touching it. Budgeting is very similar. Your income represents the bar. Your spending must fall below the bar every month, or you lose.

In limbo, you must take carefully-measured steps to keep as far away from the bar as you can. The gap between your body and the bar is what I call “financial margin,” which we all need. This is the space that grants peace and financial protection in the unexpected storms of life.

It is possible to increase your monthly margin quickly by adjusting your lifestyle. Consider the benefits of choosing to live on far less than you make. Manage the common budget busters—food, entertainment, and transportation—to further reduce expenses.

Other Tips

Paying down the highest interest-bearing note first will save you money in the long run. Paying down multiple small notes can provide a psychological advantage. Repay any late mortgage or rent, utilities, HOA fees, taxes, and car payments so there is no threat of losing your home or car.

Do you owe family members any money? Do not ignore this responsibility. Be honest, and treat them as you would want to be treated so that relationships are not harmed.

Be Intentional 

Even if you do pay off all your debt, it is important to manage your finances well as you go forward. Just because you become debt-free does not guarantee that you will stay that way unless you manage what you have well. Here are my three tips:

  1. Plan ahead: Commit your work to the Lord, and your plans will be established. (Proverbs 16:3 ESV)
    • Budget wisely. This will keep you from creating more debt and will allow you to build an emergency savings fund. If needed, a crisis budget can get you to a position of financial strength. Here are instructions, an online fillable form, and a spending plan.
  2. Seek counsel: Without counsel, plans fail, but with many advisers, they succeed. (Proverbs 15:22 ESV)
    • Please consider my advice as only one source of those you will turn to for help.
  3. Make wise decisions: If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given him. (James 1:5 ESV)
    • God is the source of all wisdom. When we learn His Word and commit to live by it, everything in our lives will begin to take on new excitement and joy. Using money to fulfill God’s purposes for your life will be the best financial decision you can make.

Thank you for the question. I don’t think you can go wrong if you pay off the debt and commit to following the steps above.

For more guidance, especially if your debt is related to credit cards, please consider contacting Christian Credit Counselors. They are a trusted source of help.

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