Budgeting, Credit Cards, Debt, Money Management

Ask Chuck: My Spouse is an Impulsive Spender

By: Chuck Bentley, Crown Financial Ministries

Dear Chuck,

Do you have any advice for someone married to an impulsive spender?

Cautious Budgeter 

Dear Cautious Budgeter, 

Sounds like you may be married to an opposite financial personality; my wife and I can relate! 

Most of us have made an impulsive purchase at some point in time. Others struggle with it more frequently. Or they are married to one who does. I was the impulse spender in our marriage for many years. To be clear, impulse spenders buy what they want without considering the consequences. Their behavior negatively impacts others, and the financial stress can be terrible. 

It can be difficult to determine if someone is impulsive, compulsive, or materialistic. Some definitions will help here: 

Materialistic describes one who is excessively concerned with physical comforts or the acquisition of wealth and material possessions. This is an issue of the heart that drives the behavior. Often, people live ignorant of or in denial of this spiritual deception. 

Impulse buying is often related to anxiety or depression. Those who struggle with their self-image desire acceptance, respect, or attention. They shop whether they can afford to or not, in an attempt to meet those needs or boost their mood. Some call this “retail therapy.”   

Compulsive spending, on the other hand, is an uncontrollable desire to shop. It results in spending large amounts of time and money and tends to escalate over time. Mental Health America gives 4 stages of compulsive spending: anticipation, preparation, shopping, then spending. If impulse buying impacts budgets, compulsive spending can destroy them! 

Symptoms of Compulsive Spending:

  • Spending a significant portion of income on discretionary purchases
  • Accumulating a large amount of consumer debt
  • Spending continually, despite resolutions to stop
  • Hiding purchases from loved ones 
  • Experiencing more excitement in purchasing than owning 
  • Feeling let down or shame after buying something
  • Buying things not needed, not using what’s bought
  • Suffering relationship problems due to spending
  • Feeling ashamed of the spending problem
  • Getting agitated or excited when shopping
  • Feeling that the next big purchase will improve life 
  • Shopping is the primary or only means to cope with stress

A Change of Heart 

To help your spouse identify if he/she is struggling with materialism, consider doing an online Crown study together. Typically, the behavior will not change until the heart is transformed. In my own experience, I had to repent of the control money had over my life. I surrendered my life to the Lord’s control in order to escape my double-mindedness. 

Practical Tips 

Ask your spouse to consider some of the steps that will bring impulsive buying or compulsive spending under control. 

Pick a stress-free time and environment to set goals. Write them down, and post them in a visible place. Then, create a budget. Honor God and one another by staying within the spending limits for each expense category. Learn to give first, and then, pay your bills; use automatic transfers to specific savings accounts. Discover what the Bible says about money, and ask the Lord to work in your situation. 

Track shopping sprees. Discover the triggers, and note what is purchased.

Avoid shopping—period. Find a healthier activity to substitute for the rush. If you must make a purchase, determine your needs, make a list, use cash, then exit immediately. Take a spouse or trustworthy friend with you. 

Stop using credit cards. Put them in a very, very inconvenient location. Unsubscribe from store emails, and avoid online shopping. Professional counseling may be necessary. Just remember, “No temptation has overtaken you that is not common to man. God is faithful, and he will not let you be tempted beyond your ability, but with the temptation, he will also provide the way of escape, that you may be able to endure it.” (1 Corinthians 10: 13 ESV) 

Aim to be humble and transparent, committing to honesty in all transactions. This removes distrust in relationships. Seek accountability with your spouse and the wisdom of an older couple. Learn good communication skills. (Check out the numerous resources available at RightNowMedia.org.) 

Learn to appreciate things money can’t buy—like nature, health, and relationships. Ask God to remove the impulses so that you can fulfill His purposes in your life. He is “able to do immeasurably more than all we ask or imagine, according to his power that is at work within us….” (Ephesians 3:20 ESV) 

Pray for an eternal perspective—that the things of this world would lose their luster. “Do not lay up for yourselves treasures on earth, where moths and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.” (Matthew 6:19-20 ESV)

Christian Credit Counselors may be able to provide more guidance, as they are a trusted source of help to free individuals and families from the burden of credit card debt. 

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Budgeting, Credit, Credit Score, Debit & Your Credit Score, Money Management, Personal Goals

Financial Spring Cleaning Tips

BY DANIEL RODRIGUEZ | DR. BUDGETS

Spring Cleaning can mean more than buckets, mops, and brooms! There are many reasons why this time of year is great for cleaning up your finances:

  • We’re 4.5 months into the year, so you are starting to get an idea of how the year is shaping up, including earnings, spending, and debt repayment.
  • You’ve just done your taxes (or filed an extension) and can start getting organized NOW for next year’s taxes.
  • There’s something invigorating about the time between winter and summer – birds are chirping, flowers are blooming, and you might feel motivated to do some spring cleaning!

Here are some things to consider when you do your financial spring cleaning:

Review Budget (Spending Plan)

We are about a third of the way through the year, so now is a good time to check in with your spending thus far. How are you doing with your spending this year? Have you spent more than anticipated in some areas? If so, consider spending less in those areas during the next few months to balance your spending in those categories. Have you spent less than anticipated in some areas? If so, consider setting that excess money aside in case you end up needing to spend in those categories later this year. Remember to stick to your spending plan even when you seem to have the extra money in your bank account…that “extra” money will come in handy when those semi-annual or annual payments are due (or over the holidays!).

Declutter Paper

Even with all our technology and cloud storage solutions, we are still overrun by paper! Paper clutter can be stressful, and it is probably costing you money (and time!). Consider using this time of the year to declutter your paper. Some examples of things you may find include bills, bank statements, notifications for membership renewals, and payments for Flexible Spending Account (FSA) expenses. You can scan, then shred items that you need (be sure to back up the files!) and toss or shred items you don’t need anymore. For more info on what to toss and what to keep, check out these articles from Forbes and USA Today.

Return, Sell or Donate

Do you have unwanted stuff lying around the house? Are there things you haven’t used in over a year? Those items can sometimes be returned (if you purchased them recently), sold, or donated. If you can return the item, that will be your best option since you will be able to get back what you paid for it. If you have nice clothes, here are 13 of the best places to sell used clothes for money. For other items or electronics, consider using Craigslist or eBay. And if you have unwanted gift cards, try a website like CardCash to get cash for those.

Improve Credit

This is a great time of the year to review your credit. First, check your credit reports for accuracy at annualcreditreport.com. If you want to check your credit reports for free throughout the year, check one of the three credit reports every four months (for example, Experian in April, Equifax in August, and TransUnion in December). To help increase your credit score, try to bring your debt utilization rate under 30%. Here are 5 tips for winning the credit utilization game. Finally, pay your bills on time every time! According to Investopedia, paying your bills on time is the most important component of your credit score. With that said…

Automate Bill Payment

If you can pay most or all your bills automatically, that can streamline your finances, reduce stress, and improve your credit. You can also avoid those dreaded late fees! If you are concerned with having enough in your checking account when your credit card payments come due each month, consider setting up your automatic payment for the minimum payment, and then paying extra toward your cards manually when you have the additional funds to pay down your debt. A bonus tip: save automatically! If you can automatically save money, it has been proven to increase your overall level of savings. Just be sure to pay off that high-interest debt first!

These are my 5 tips for financial spring cleaning. Happy Spring!

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Budgeting, Finance, Goals, Money Management, Personal Goals

Ask Chuck: 5 Steps to Improve Your Finances This New Year

By: Crown Financial Ministries

Dear Chuck,

Covid set me back financially this year. As a result, we’re having a very frugal Christmas. Can you offer any tips on setting financial goals for next year? I want to be better prepared for what may lie ahead!

Getting Ready for 2021

Dear Getting Ready, 

I am so sorry for the setbacks you have suffered during this pandemic. Millions of people just like you are looking forward to the new year with great anticipation and are hoping to make improvements in our finances. 

New Year, New You

January is typically a time of renewal. For many of us, that includes diets, health and fitness goals, relationships, or financial plans. However, after what we have experienced in 2020, our highest need will be for renewed hope. Watching the news, scrolling through social media, and listening to certain friends or family members will not fulfill that need. Hope gets us through the tough seasons and gives us direction in times of uncertainty. Thankfully, we have the ultimate source of hope: Jesus. We need to learn to rely on Him in order to cultivate that hope. Here is a quick outline of the steps for 2021.

Step One: Make a Vow. Dedicate this year to the Lord and seek his guidance in all decision-making.  

“Commit your work to the Lord, and your plans will be established.” (Proverbs 16:3 ESV)

Step Two: Make a Plan. Plan and encourage one another daily. 

Two are better than one because they have a good reward for their toil.” (Ecclesiastes 4:9 ESV)

Pray for self-control and the willingness to stay focused throughout the coming year. 

But the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, self-control; against such things, there is no law.” (Galatians 5:22-23 ESV)

Step Three: Make a Target. Defining your financial goals gives you something to aim for. 

  • Write them out and place them where you are reminded daily. 
  • Determine to spend less than you earn. 
  • Have monthly money dates to analyze your progress. 
  • Assign roles to each other for defense and offense. Be “guard dogs” to protect your earnings so that you can steward wisely. I guarantee you that the “thief” is on the prowl. He comes ONLY to steal, kill, and destroy (John 10:10a ESV). He will rob you of progress unless you are very intentional in implementing your plan.

Step Four: Make a Budget. Gather your financial records, track your expenses, and create a budget. Make giving your first priority. Establish an emergency account. This will enable you to cover unexpected expenses so that you can avoid debt. Start with $1,000 and then aim for an amount that covers 3-6 months of your overhead expenses. Analyze lifestyle decisions. Some short-term ones to consider include replacing a vehicle, repairs, maintenance, vacation, gifts, etc. Long-term decisions may include a downpayment for a home, education, retirement, etc. Keep your tax liability in mind and plan accordingly.

Step Five: Review Your Insurance. This is a good time to review your insurance coverage: Homeowners or Renters/Auto/Liability, Disability, Life, and Long-Term Care. Not only should you determine if you have coverage but also if you are getting the right price for what you have in place.

Don’t Overlook These 

Update your will. Today this includes creating a Living Will or Trust, Health Declarations, Power of Attorney documents, and password files. 

Pick a debt management plan and pay off all credit cards! Christian Credit Counselors are trusted partners of Crown and have helped hundreds of thousands of families eliminate their credit card debt. Once free of consumer debt, you can begin investing

Depending on your age, put a reminder on your calendar to enroll in Medicare before your 65th birthday. Determine when you should begin to draw social security. 

Check your credit reports from Equifax, TransUnion, and Experian. This is important with the number of security breaches. Check to make sure information is correct and report any inaccuracies. Contact them to freeze your credit if necessary. This will prevent thieves from applying and obtaining credit in your name. You can unfreeze as needed. 

Know your credit score. A free report is available at www.annualcreditreport.com. Some credit cards update your FICO score for free each month. 

Calculate your net worth (assets minus liabilities). Aim for a positive number! 

Get Wisdom! 

There has never been an easier time to attain a Biblical financial education. Books, online studies, and insights from places like Sound Mind Investing, Generous Giving, and Crown’s online library of courses make it convenient and practical to learn year-round.

Most importantly, read the Word of God. You will gain wisdom, discernment, and hope that is more advantageous than anything the world offers. 

God has called us to himself that we might shine light into the darkness and bring Him glory. At Crown, we provide resources that will renew your hope through Biblical truths about the Father and the gifts He has entrusted to you.  

Merry Frugal Christmas 

It has been our experience that a frugal Christmas is often the best Christmas. The focus shifts away from the number of boxes under the tree or the expense of the season to the awe and wonder of celebrating the incarnation of Christ; Emmanuel, God with us. 

I wish you and yours a very Merry Christmas and a blessed New Year. We are here to help you on your journey in 2021.

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Budgeting, Economy, Finance, Money Management, National Debt, Saving

Ask Chuck: Practical Advice During the COVID-19 Crisis

By: Crown Financial Ministries

Dear Chuck,

Many of the young people in my Bible Study are frightened of the Coronavirus and the threat to their families. I understand their fear. But, as an older American, I’m also concerned about their economic well-being in the aftermath of this crisis. What kind of financial advice can I offer them?

Sheltered in The Storm

Dear Sheltered in the Storm, 

We have two crises happening now and you have properly identified the third one. First, the virus has created a very real health crisis. Second, the shutdown of the economy has created a very present economic crisis and third, the government bailout will put us at risk of a future debt crisis and threat to the global economy. 

As Thomas Sowell said about our current challenges, “We do not have good choices, we simply have trade-offs.” 

Living on the Edge

The Coronavirus has revealed the financial unpreparedness of millions of citizens. Aaron Zitner, at the Wall Street Journal, reports: “Some 15% of Americans have used, or plan to use, either short-term loans or credit cards that they don’t know they can repay in order to buy emergency goods to deal with the outbreak, a survey by NORC at the University of Chicago found.” He says others rely on savings or plan to divert money set aside for other things.

It is my hope that many Americans have been better prepared for this event after making financial adjustments following the Great Recession, which started in 2008, by paying off debt, increasing savings, and living within their means. Either way, here are some practical and spiritual insights for the young people in your Bible study. 

Establish Essentials as Priority

Everyone’s situation is different. Let’s help the young people understand how to deal with the current economic crisis, and we will deal with the long-term consequences of the bailout later. Here’s how I would attempt to help those in your Bible study when meeting one-on-one. 

Regardless of what’s happening in the world, everyone needs food and shelter. Pay the bills that provide food, home, and necessary utilities. This is a time to sacrifice wants to provide for needs.

Most middle-income families will receive some sort of government assistance money. Establish or grow your emergency savings account. Always keep it resupplied as you are able. 

With job cuts right now, childcare and transportation costs may drop significantly. If possible, save that money in an emergency fund for future needs. Even a small amount in a savings account will reduce financial stress and grant margin in your life. Exercising self-control (a fruit of the Spirit) will boost your confidence and grant hope.

Face your bills with courage and hope. Pray over them and ask God to work in miraculous ways knowing He is able to do far more than you can imagine. Avoid fear and anxiety with this verse:

“Rejoice in hope, be patient in tribulation, be constant in prayer.” (Romans 12:12 ESV)

Practical Steps 

  • Limit social media to avoid online shopping. Don’t give in to your (or your children’s) wants right now. Lead by example in love.
  • Student loans: this may be the time to refinance.
  • Debt: negotiate with lenders to reduce your interest rate or balance. Seek to eliminate penalties. Demonstrate your intent to pay. Avoid maxing out credit cards. Consider balance transfers but read all the fine print. Set a goal to eliminate the debt and the method to get there (I recommend the snowball or avalanche methods). Contact Christian Credit Counselors if you are falling behind. 
  • Insurance: assess coverage and negotiate the cost. Some coverages may not be a necessity or deductibles may need to be raised to lower premium costs. 
  • Make a will. Don’t procrastinate.
  • Save: deposit something weekly, or every other week, to develop the habit. Get a fireproof, waterproof safe to keep some cash at home at all times. I recommend one month of living expenses. 
  • Wisely use your government check if you have an emergency savings account: give a portion, pay current bills, and pay down debt.
  • Income tax filing has been postponed until July 15th. If you owe money, set that money aside in a separate account.
  • Ask for help. Trade skills: haircuts for food, tutoring for computer help, etc.
  • Sell what you don’t need. Facebook Marketplace and Craigslist make it easy. Do it safely by meeting buyers in a grocery or government parking lot during daylight hours.
  • Look for opportunities. This may be the best time to start a business or take on greater responsibility at your current place of employment. Learn new skills. Take advantage of online classes. Educate yourself by reading, listening to books, watching Ted Talks, and documentaries.
  • Be generous. There are many suffering at this time. Be exceptionally generous while also being wise and discerning.

Hope for Troubling Times 

Those who are frightened, worried, angry, or frustrated must remember they are not alone. God has not left us on our own. In fact, idols are being revealed and priorities analyzed. It’s time to reorient our lives.

We all know we should live one day at a time. That requires taking one step at a time. But, what if fear overwhelms you and you don’t know what steps to take?

Imagine a sailboat drifting in the center of a large lake with no apparent destination in sight. It rocks back and forth, back and forth, unable to move forward. Suddenly, the wind begins to blow. The sails of the boat filled with air. The sailor takes action and strategically directs the boat to the desired destination. The boat glides effortlessly while the sailor works with the wind to safely arrive to shore.

The Holy Spirit is the wind. He fills our sails enabling us to know when and how to move forward. Filled with hope, we develop perspective and work toward our destination.

“May the God of hope fill you with all joy and peace in believing, so that by the power of the Holy Spirit you may abound in hope.” (Romans 15:13 ESV) 

Not Our First Rodeo

Like you, I have lived long enough to have experienced a number of crises in my life. As my friend said, “this is not my first rodeo, but this is the first time I have ever ridden this horse!” We are living through something the world has never experienced. It’s an opportunity to trust God with all our heart. May He fill you and me with all hope so we can proclaim His goodness. 

 “…we rejoice in our sufferings, knowing that suffering produces endurance, and endurance produces character, and character produces hope, and hope does not put us to shame, because God’s love has been poured into our hearts through the Holy Spirit who has been given to us.” (Romans 5:3-5 ESV)

For anyone struggling with credit card debt, get in touch with our partners at Christian Credit Counselors. They can advocate for you, helping lower payments, and organize your debt. Start your free debt analysis today.

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Budgeting, Debt, Money Management, Saving

4 Steps to Spend Your Stimulus Check and Tax Refund Wisely

By: America Saves

Most Americans don’t have an emergency fund. While we’re all experiencing this pandemic very differently — some having only minor inconveniences and others finding themselves without a job or having to close their business — those without a savings cushion are vulnerable to feeling the ramifications of COVID-19 for a very long time.

With stimulus checks and tax refunds on the way, there will be tough financial decisions to make once received. Here are active steps you can take, along with things to consider to help you develop a solid spending plan.

  1. Make a list of all expenses

Write out every single expense that you have, including essentials like food and utilities. Be sure to go through your checking and savings account history to make sure you don’t have any “vampire” expenses, like monthly subscriptions that you may have forgotten about and no longer need.

  1. Talk to all creditors and lenders

The CARES Act puts into effect two mortgage relief provisions: protection from foreclosure, and a right to forbearance (pausing or making partial payments) for those experiencing loss of income due to COVID-19. However, the provisions are not automatic and are only for federal loans, so you MUST talk to your lender.

If a creditor/lender offers you a payment plan or other relief, make sure you get it in writing and take note of the names and dates of the customer service representatives with whom you speak.

Thankfully, some utility companies have announced they won’t cut off services if they aren’t being paid. Be sure you know all of your utility and service providers’ stance on this, so there are no surprises. You don’t want to make any assumptions.

If you cannot afford your DMP payments, contact your creditors directly to request for deferment on your credit cards. This will prevent your account from falling (further) past due and help to maintain your credit score. Creditors are making payment exceptions on a case by case basis. If you are granted a deferment from your creditors, please contact your CCC representative so that they can adjust your DMP payments.

  1. Prioritize expenses

Expenses relating to food, shelter, and medicine should come first. This would include mortgage, rent, utilities, groceries, diapers, and medications. It also includes medical insurance premiums and homeowners/renter’s insurance.

If you need childcare to work, that is another essential expense. Next in line are auto-related expenses, including transportation, gas, insurance premiums, and car payments.

Loans that are secured by collateral (for example, mortgages and auto loans) are generally considered more important than those without collateral, like consumer credit card debt. For example, if you don’t pay your mortgage, a bank can foreclose on your property; if you don’t pay your car loan, the bank can seize your car. While not paying your credit card bills will negatively affect your credit score, credit card companies will not come into your house and take your personal possessions.

Federal student loans are currently not accruing interest until September 30, 2020, and can be put into forbearance so that no payments are due. If you have a private or institutional loan, you will have to contact the lender for other options.

If you struggle to make the minimum payment on your credit card, call CCC at 800-557-1985 option 5 to add the account to the program for a total consolidation of your outstanding debts.

Expenses for “elective” items, like gym memberships, streaming services, and other subscriptions, come last. Before simply canceling a contract, make sure to contact the vendor – canceling may come with a hefty penalty, but you may be able to temporarily “pause” the service.

  1. Pay your debts in the order of priority.

Now that you know all your expenses, have prioritized them, and know your payment options with creditors and lenders, it’s time to make the payments in order of priority.

It’s important to note that many are still or will be receiving their tax refunds, too. If you receive a refund, you can apply the same process to that extra income.

Remember, there is no prepayment penalty on your Debt Management Program! Contact your CCC representative to apply your stimulus check and/or tax refund toward your balances and pay off your debts.

If you are still unsure or are overwhelmed with where to start, use our decision tree for guidance on what to do with your stimulus check and/or tax refund.

 
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Budgeting, Money Management, Saving

Money-Saving Tips for the COVID-19 Pandemic

By: Crown Financial Ministries

The Crown team makes it a priority to “practice what we preach”. During this pandemic, as we recommend to cut back your living expenses by 25% for the next 90 days, we’ve made a list for you of the ways we’re doing that ourselves. There are some natural savings that happen when you follow social distancing rules, like spending less on gas, eating out, and entertainment. Below are some additional recommendations from the Crown team for cutting expenses and increasing your savings!

Cut back on any unnecessary or luxury subscriptions

Maybe Spotify free is the way to go for now. Here’s a video with easy ways to do this. Courtney said, “My husband and I both went through the last few statements of our bank accounts looking for subscriptions that we could cancel or downgrade. I didn’t realize I was paying for a few app subscriptions! That has saved us a few extra dollars a month.” Calvin and his wife have cut their gym memberships and are working out at home. They are also saving all discretionary dollars in their budget for a few months.

Negotiate cable and internet rates

You may be able to negotiate a better rate for your cable and/or internet. Businesses are wanting to keep their clients right now, so call to check if there are any special promotions you can take advantage of. “We contacted our internet provider and found that we could save 30% on monthly payment because they could move us to a new promotion package,” Alet said. Another one of our staff members canceled their cable TV altogether. Many streaming services are offering free promotions over the next few months, so be sure to look on Google for coupons before signing up for anything new.

Turn off the lights

Be mindful of your energy usage while you’re home. Do you have a habit of leaving the lights or ceiling fans on? Get up from your home office desk and make sure you’re not paying extra for that electricity!

Defer medical bills

If you need to, call your medical provider and set up a payment or deferment plan. Most will let you do this if you ask and work with them.

Slow down loan payments or stop paying ahead – for now

Several staff members have been paying ahead on their mortgage or student loans. For the next few months, their plan is to pay the required monthly balance as billed and use the extra to increase their savings.

Save on your phone bill

Handre called his mobile provider and moved to a less expensive package saving him each month on his family plan.

Activate the “pantry challenge”

Melinda and her family have challenged themselves to eat out of only their pantry and freezer before going out to eat. Once a week, someone grocery shops for a few fresh essentials for their meals. Other than that, they save money by depleting their stocked food and complying with social distancing rules.

Go meatless

Hannah said her family has moved to 3 meatless dinners a week. It has helped them to mix up their recipes and helped them cut back on their grocery bill!

Save on insurance

One member of the Crown staff said, “I contacted our home insurance company and asked if there were any discounts we could qualify for because of recent improvements we did to our home. A miracle happened – they lowered our yearly insurance amount by $400 and gave me $500 towards this year’s installment because we fixed the roof recently. We had already decided to give to people who were losing their jobs, and now our gifts have been doubled!”

Trusting God’s Promise

We know it’s not fun to take these steps, but we’re trusting in God’s promise that discipline now will pay off later. “For the moment all discipline seems painful rather than pleasant, but later it yields the peaceful fruit of righteousness to those who have been trained by it.” Hebrews 12:11 (ESV) Here are a few other financial steps you can take to find peace and freedom.

Pay off debt

Now is a good time to work on decreasing or eliminating debt. If you need help making a plan, contact our partners Christian Credit Counselors. They’ll help you consolidate your payments so you can be debt-free sooner!

Increase your savings

If you’re not in the habit of saving, now would be a good time to start. To make it easy, check out the Eli Savings App. It automates your savings for you and only saves what you’re able to afford.

Give generously

It may seem uncomfortable right now to think about giving, but it is in these times where we are able to truly show our faith and trust in the Lord. Share the resources you have with your neighbors and friends. Are you able to give more to your church when others might be holding back? Do you know someone furloughed or out of work that can use some help? Find a way to share.

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Budgeting, Credit Cards, Finance, Money Management

Ask Chuck: Breaking the Cycle of Overspending

By: Chuck Bentley, Crown Financial Ministries

Dear Chuck,

My husband is tired of my overspending. I struggle living on the budget he’s made because I make quick purchases rather than planning ahead. Then I feel guilty defending my decisions when the bills arrive. How can I get out of this cycle?

Spontaneous Spender

Dear Spontaneous, 

First, be thankful you have a husband who cares enough to make a budget. If only more people would do so! Next, let’s deal with the cause for the spontaneous spending so you can escape the cycle you are in.

Money and Emotions 

Money affects our emotions and our emotions affect our use of money. Experts understand this and market to your emotions – merchants from grocery stores, furniture marts, car dealerships, and online advertisers. They all target your feelings toward shopping. Learning to separate your identity from the things you buy will keep you from spending money to feel good. The term “retail therapy” implies that some people spend money to bolster their mood. It is a very real urge. I have experienced it myself and watched others do it as well. 

I had a friend who was competing for a big promotion in his company. Over multiple interviews and several months of consideration of all candidates, management selected someone else over my friend. The very day that he learned he was not selected, he went out and purchased a brand new, expensive car. The problem was he could not afford the car without the promotion but he had been dreaming of it for so long that he bought it anyway. In his own words, he told me that it was “retail therapy”.  

God’s Word makes it clear that we enter the world naked and we leave naked…and naked has no pockets. Since we can’t take any purchases with us when we die, we should become emotionally neutral towards our spending choices.

Avoid Spending Triggers

Certain emotional triggers can cause people to spend money. A few of the most common include:

  • Alcohol or hunger: lower inhibitions cause people to buy and regret later.
  • Anger or sorrow: spend to gain control, feel happy, find short-term gratification.
  • Loneliness: spending medicates briefly. But, materialism and loneliness are a self-reinforcing cycle.
  • Insecurity: try to keep up with the Joneses.
  • Self-focused: raises or tax refunds justify splurges or rewards.
  • Overwhelmed: spend on fast food, maid services, laundry, yard work.
  • Fear: causes hoarding or poor investments.
  • Guilt: spending to alleviate the pain inflicted on others.

Can you relate to any of these?

People justify spending when they are emotional because spending momentarily feels good. But, decisions based on feelings often create financial problems that further complicate life.

We cannot buy happiness. Spending and accumulating more money may not increase our well-being and can actually have a negative effect. But, wisely managing money, as a steward of God, is fulfilling.

Solutions to Your Urges and Splurges 

  • Create a budget and set goals.
  • Don’t go where you know you might spend money.
  • Resolve to make no impulsive purchases. Wait 24 hours if tempted.
  • Limit exposure to advertising and social media.
  • Delete or unsubscribe from sites where you waste time and face temptation.
  • Replace unnecessary time on the computer or cell phone with productive use of time.
  • Exercise or spend time with friends for lasting comfort.
  • Be accountable to your spouse or mentor.
  • Learn basic financial principles.
  • Avoid making big decisions when extremely emotional.

If you have true needs, take them before the Lord. The Apostle Paul teaches:

do not be anxious about anything, but in everything by prayer and supplication with thanksgiving let your requests be made known to God. And the peace of God, which surpasses all understanding, will guard your hearts and your minds in Christ Jesus. (Philippians 4:6-7 ESV)

Check Your Emotions

When did you last thank God for who He is and what He has done for you? Are you seeking satisfaction from people or things rather than the only One who can truly satisfy?

Thankfulness delays our need for instant gratification. Meditating on what God has provided can calm our emotions and prevent budget-wrecking purchases. Couple that with generosity and a heart of compassion, and our contentment can soar, bringing positive thoughts to light. 

Set your mind on things above, not on things that are on the earth. (Colossians 3:2 ESV)

In so doing, you will find that your heart becomes satisfied with the riches of Christ that is of much greater value than the things of this world.

A Final Tip

Consider some of Crown’s resources to help you and your husband get on the same page. My wife and I wrote a book together on this very topic. You can find it here and access numerous free resources on the Crown website. Thanks again for writing.

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Budgeting, Credit Cards, Holiday Tips, Money Management, Saving

A Saver’s Guide to Holiday Shopping

By: America Saves

Ready or not, the holiday shopping season is here. With the multiple sale days between now and the end of the year, you can avoid being served a heaping side of seasonal debt along with your plate of honey-baked ham if you keep a few smart-saver tips in mind.

Set Reasonable Expectations

In 2012, it was reported that the average American expected to spend $854 on gifts during the holiday season. While many won’t spend that much on shopping, any spending that strains your finances or saddles you with post-holiday debt is bad for your financial future —period. Take the time to talk with family and friends about realistic holiday spending limits before you go shopping. Consider less expensive gift options like homemade gifts. If you have a large extended family, maybe it’s time to start a new tradition of picking one name out of a hat to buy a gift for, rather than everybody buying a gift for every person in the family.

Plan, Budget, and Save

One of the best approaches you can take to holiday shopping is figuring out who’s on your gift list, creating a holiday budget, and gradually setting money aside to help you avoid overspending, unwanted debt, and financial stress. You can find helpful budgeting tools on mymoney.gov. If you didn’t budget and save for this year, it’s never too early to start saving for next year. Check with your bank or credit union to see if they offer holiday savings accounts that you can use to save for next year’s holiday goals. If you set up a plan now and leave that money alone, you’ll have a nice gift fund in a year.

Keep the Big Picture in Mind

It can be easy to forget that we spend money on other things besides gifts during the holidays. Big holiday dinners, travel to see family and friends and even increased electricity costs to run massive holiday light displays can drain your bank account. Make sure you plan for the cost of all of your extra holiday activities.

Watch Out for Costly Surprises

If you’re using gift cards or layaway plans, make sure you fully understand the terms and conditions. Expiration dates, inactivity rules, and hidden fees on gift cards can eat away at their value if you’re not careful. Take the same cautious approach with store credit cards that you’re offered at checkout. They might save you a few bucks at the register today but stick you with very high-interest rates later.

Avoid Holiday Debt Traps

Doing things like catching early sales, comparison shopping, ordering from sites or stores that offer free shipping, shopping at discount stores, and buying items that offer rebates can help save you money on holiday purchases. However, don’t let the excitement of holiday deals go to your head! If you rush to a store sale because you can get a $3,000 television for $2,000, you’ve still spent $2,000. Was that really something you had planned to do? Also, don’t be enticed by payday lenders who want to “help” you get holiday cash. Proper planning and saving long before the holiday can help you avoid a cycle of high-interest debt that can last for weeks or even months after the holidays are over.

Keep in mind that holiday spending is short-term spending. Once the unwrapping frenzy is over, how long will the excitement last? Saving your money for long-term goals like homeownership, college or a comfortable retirement may be the very best gift you can give yourself and your loved ones.

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Budgeting, Coupons, Holiday Tips, Saving

How to Save During the Holidays

By: America Saves

Holidays are often an exciting time of the year. Spending time with family, enjoying time off work, and celebrating with family traditions are enjoyable activities. However, the holidays can also represent added stress due to the crunch on your wallet.

It is hard to look forward to a holiday if you are worried about how to pay for it. Have you stressed about how to provide a fun experience for your family without breaking the bank? Decorations, gifts, and food expenses add up quickly.

To avoid this financial strain, it is important to plan for holiday expenses throughout the year. America Saves has compiled some tips to help you plan for a fulfilling holiday season while not drowning in expenses.

Develop a Holiday Budget

One way to reduce impulsive spending is to develop a budget that includes clear expectations for travel, food, entertainment, and gift-giving expenses.

  • Set your spending limit before you start budgeting. And stick to your limit. That might mean making some compromises. Decide what you will spend on each person before going shopping. If possible, talk with family members and friends to set a spending limit that everyone can spend on each gift.
  • Be as comprehensive as you can when you create your budget. Make a list of everyone who will receive a gift as well as all items that will cost money during the holiday season. Some items often forgotten include gasoline, babysitter fees, eating at restaurants more often, and so on.
  • Reduce your spending. Add up the total of your holiday list, and don’t be shy about reducing it some more. Challenge yourself to spend a little less each year. Consider writing handwritten notes expressing thanks or appreciation rather than buying gifts when possible to reduce your spending costs.
  • Divide the list into necessary items (needs) and extra opportunities (wants). For example, gasoline is a needed expense for traveling while eating out at restaurants while on the road is an extra expense that can be avoided if needed. Dividing your list will help you save for all necessary expenses and provide a list of ideas in case extra money is leftover.
  • As part of your budget, determine how you will pay for each item. Paying with cash will help avoid unexpected spending. Paying with a credit card without keeping track of spending may cause you to forget purchases for which you’ll have to pay later. If paying with layaway, look out for hidden fees and be sure to budget for any interest added.
  • Carry a copy of your budget with you, and be sure to follow it while in stores. Once a budget is made, it can still be hard to follow. In-store sales are tempting, but making impulsive purchases, no matter how small, can add up quickly.
  • Plan your shopping trips ahead of time by reviewing store ads for upcoming sales. This step will lower costs while also helping to reduce impulsive decisions while in the store.
  • Remember to save. Continue saving over the holidays so you don’t shortchange your retirement, education, small business, or other goals. Stick to more long-term savings goals and avoid the accumulation of new debt.

Download our Free Holiday Budget Printable for easy budget construction, and check out additional budgeting tips here.

Consider the following tips for the upcoming holidays:

  • Cooking an entire holiday meal on your own can be expensive. Consider having a potluck with friends and family to avoid cooking or paying for the entire meal yourself.
  • Keep the menu simple. Dinner can be special without two different types of meat, four vegetable dishes, and three different desserts. If you plan to serve mashed potatoes and gravy, you can skip the macaroni and cheese casserole. If you plan to make candied carrots, no need to serve candied yams also.
  • Plan for meals ahead of time to take advantage of coupons and grocery deals. Advertisements about upcoming sales can be found online and in local newspapers. Using in-season produce for recipes can often reduce food costs.
  • Reduce travel expenses by visiting out-of-town families for one holiday during the winter season (such as just Thanksgiving or only Christmas, rather than both holidays).
  • Consider setting up new holiday traditions that cost less. For example, some families or friend groups use “Secret Santa,” where each person draws a name randomly so that each person receives a gift and each person only buys a gift for one person.
  • Consider spending time together rather than gift-giving. Other ideas include a nice dinner out or playing games as a group.

When it comes to holiday spending, the important thing is to stick to your budget. We all want holidays to be special, but if you create debt in the process, it will end up being more of a headache than a holiday.

Spending less is just the first part of a successful financial plan. Put away the money you save during the holidays into a savings account for future expenses, both anticipated and unexpected ones. Those with a savings plan are twice as likely to save successfully. Let America Saves help you reach your savings and debt reduction goals. It all starts when you make a commitment to yourself to save. That’s what our pledge is all about. Learn more about how to save money for the future here.

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Budgeting, Credit, Credit Cards, Credit Score, Debt, Money Management, Saving, Student Loans

Top 9 Money Mistakes People Make

By Jim Garnett, The Debt Doctor

After counseling average Americans about their financial problems for many years, I noticed early on that there is a common set of money mistakes people usually make.

Money Mistake #1: Being comfortable with debt.

Why would anyone choose to be a slave if he could choose to be free? One answer is because, over a period of time, one seems to develop a “slave mentality.” They have never known freedom and have gotten used to being slaves.

There is a very real sense that being in debt makes us slaves. The wise King Solomon wrote, “The rich rule over the poor, and the borrower is slave of the lender” (Proverbs 22:7 NRSV). Many in our society have been in debt so long, they have cultivated a “debt mentality.” Because they have never known financial freedom, they grow accustomed to being in debt and accept it as “the normal way of life.”

But just imagine what it would be like to be out of debt and not have a mortgage payment or car payment each month? Just think what you could do with all that money. Out of debt, you would not need as much money to live, and you would be free to use this money which was once tied up in debt payments for whatever you wanted.

Just think of being in your 30’s or early 40’s and being able to have discretionary monies of $2,000 to $3,000 a month. You could put a sizable amount away toward car replacement, house repair, or future education needs. And imagine what it would be like to be able to write checks to your church or charities that are sizable in amount.

Being debt-free would allow you the freedom to grow wealth quickly and give substantially.

It is high time we stop treating debt like an old family friend that has moved in to stay with us forever! We need to kick him out and send him on his way! There is no reason to remain enslaved to debt when we can be free.

Money Mistake #2: Not knowing what we spend each month.

The only part of the budget process that many people know is the “what I make” part. Most people are totally in the dark about the “what I spend” part. This money mistake is one of the main reasons why 40% of Americans spend more than they make each month. Sadly, most of that 40% are unaware that they do.

How can this be? Because by using credit cards each month, an illusion is created that makes us think we are doing fine financially. After all, the bills are getting paid on time. This may be true, but if the credit cards were put in a drawer and not used for two months, the bills would not, nor could not, be paid on time. Without the constant use of credit, we would see that we are running out of money before we run out of the month.

Being smart with our money, no matter what amount that might be, includes knowing how much we spend in relation to how much we make. Using credit hides that fact from our eyes. Once we determine what we are spending, we can bring our spending in line with our earnings by either spending less or making more.

To get to a destination, we must know where we presently are. That’s why the first step in money management is always to know what we spend.

Money Mistake #3: Behaving like credit cards are money.

Many people say they know that credit cards are not money, but their actions betray their words.

A college sophomore once told me, “No matter how broke I am, I always have money in my pocket with my two credit cards.” Like many, he was confusing the “buying power” of his cards with money.

But when we use a credit card, we are not spending money but borrowing money in as much the same manner as when we take out a loan at a bank. The buying power of our credit card originates from borrowing money from a creditor – we call that borrowed money “credit.” If that credit is not repaid within a certain amount of time, a high-interest rate is added to the debt.

I am convinced that if we actually viewed our credit cards as the ability to borrow money – money that must be repaid – we would greatly restrain ourselves in their use.

Money Mistake #4: Being satisfied with only making minimum monthly payments.

Interest.com calculates that paying off a $2,000 credit card balance with an 18% interest rate at a minimum payment of 2% would take 288 months or 24 years to pay off. So, if at age 30 you closed the card and just paid on it at monthly minimums, you would be 39 years old when you finally pay it off! But note, you would not have paid just $2,000 but $6,396.40 because of the added interest charges. I don’t know about you, but I work far too hard for my money to spend it like that.

Money Mistake #5: Borrowing to “pay off” debt. 

Borrowing to pay off debt normally backfires! It has similar results to digging a hole in our front yard so we can fill in the hole in our backyard.

This “money mistake” yields some pretty disastrous results:

  • Our borrowing does not actually “pay off” debt – it merely moves the debt to a different location. Now we have a second mortgage on our home or a loan against our 401(k).
  • The debt we pay off by borrowing usually reappears within 3 years. This occurs because our borrowing makes it unnecessary to change our spending habits.
  • Borrowing against our home equity turns an unsecured debt into a secured debt. That’s why the interest rate is now less – the bank would rather loan against our house than loan against our name because it is less risky.
  • Borrowing against our 401(k) often has a 10% penalty if we are not 59.5 years old, plus the monies we borrow are taxed as income. At times, 40% of the monies taken from a 401(k) loan will “disappear” in penalty and taxes.
  • If we move again, our house produces very little profit because we have increased the mortgage balance, plus there is little to put down for a down payment on our new home.
  • When we are old enough to retire, we often cannot because our home is not paid off. We still have house payments to make because we borrowed against it to “pay off” debt.

Borrowing to pay off debt does not decrease our debt, and often we are worse off than we were before.

Money Mistake #6: Co-signing a loan.

It’s great to help somebody get a loan, but it’s critical to understand the risks before doing so. There’s a reason the lender wants a cosigner: The lender isn’t confident that the primary borrower can repay in full and on time. If a professional lender isn’t comfortable with the borrower, you’d better have a good reason for taking the risk. Lenders have access to data and extensive experience working with borrowers.

The co-signer promises to repay the other person’s debt if, for any reason, he does not. The liability assumed is for 100% of the debt, thus, if $5,000 is the total amount borrowed, the co-signer is responsible for the entire $5,000 if the other person defaults.

Also, the co-signer’s credit score can be affected if the primary signer makes late payments or misses payments on the loan. Currently, 75% of student loan co-signers end up making payments on the student loan.

Money Mistake #7: Having no emergency savings.

A recent survey asked people if they could get $2,000 for an emergency. The results revealed that 55% of the respondents said they could get the money within 30 days, but 92% of those people said they would need to borrow the money from family, friends, bank loans, or credit cards.

Another survey revealed that 28% of the 1,000 people surveyed have absolutely nothing in savings. In other words, many people are simply not prepared for emergencies.

Money Mistake #8: Creating debt for tax benefits or to establish credit.

Debt for Tax Benefits. It is good to claim every deduction that you can on your taxes, but it is often not good to spend money in order to get a tax deduction. An example would be the deduction one is allowed to take for interest paid on a mortgage loan. If I paid $10,000 of interest and was in a 25% tax bracket, I would receive a tax deduction of $2,500. If I absolutely had to pay the interest, I would surely deduct it. But if I had the choice of paying my home off and having no interest to pay, that would be my choice by far. I would rather have the $10,000 non-spent money in my hand than receive a $2,500 tax deduction. I may pay more tax, but on the other hand, if I gave monies to charities, I would receive the same deduction. Remember, you often have to spend your money to receive tax deductions. If you are not careful, you can “tax deduct yourself into the poor house.”

Debt for Establishing Credit. One of my clients followed the advice of her financial counselor and bought a house in order to build up her credit score! In order to establish credit, you simply need to pay your bills on time. You do not need to maintain debt to do this. You can establish your credit just as well by paying your credit card balance in full each month.

Money Mistake #9: Thinking that good credit is the most important thing in life.

Good credit is important, but it is not the most important thing in life. The main benefit of having good credit is being able to go into debt with good terms. But what if we decide we are not going to go any further into debt and work out a plan to get out of debt and stay out of debt? Then the benefits of good credit are not nearly as important to us.

To me, the benefits of living debt-free are much more important than the benefits of having good credit. It is true that most people who live debt-free also have good credit, but it was not their good credit that allowed them to become debt-free. It was their living within their means and discontinuing the use of credit to create any further debt.

Mind you, I am certainly not advocating that one should have bad credit. I am simply stating that getting out of debt and staying out of debt is much more important than having good credit.

The benefit of observing and sharing these money mistakes is that they allow us to learn from the mistakes of others.

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