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 a 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 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 fill with air. The sailor takes action and strategically directs the boat to a 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 cancelled 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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Credit Cards, Credit Counseling, Debt, Debt Consolidation, Debt Settlement, Finance, Loans, Money Management, Mortgage, Student Loans

Protect Yourself Financially from the Impact of COVID-19

By: Consumer Financial Protection Bureau (CFPB)

Steps to take if you have trouble paying your bills or meeting other financial obligations

If you have trouble paying your bills/loans or paying on time, there may be a number of options to help, especially if you reach out early to your lenders or creditors.

Contact your lenders, loan servicers, and other creditors

If you’re not able to pay your bills on time check their websites, to see if they have information that can help you.

The CFPB and other financial regulators have encouraged financial institutions to work with their customers to meet their community needs.

If you can’t make a payment now, need more time, or want to discuss payment options, contact your lenders and servicers to let them know about your situation. Being behind on your payments can have a lasting impact on your credit.

Credit card companies and lenders may be able to offer you a number of options to help you. This could include waiving certain fees like ATM, overdrafts, and late fees, as well as allowing you to delay, adjust, or skip some payments.

When contacting your lenders, be prepared to explain:

  • Your financial and employment situation
  • How much you can afford to pay
  • When you’re likely to be able to restart regular payments
  • Be prepared to discuss your income, expenses, and assets

Work with housing and credit counselors to understand your options

These trained professionals provide advice for little or no cost, and they will work with you to discuss your situation, evaluate options, and even help you negotiate with your lenders and servicers.

Warning: If you’re considering working with a debt settlement company to address your debts, be skeptical of any company that promises to do it for an upfront fee.

Trouble paying your mortgage?

If you can’t pay your mortgage, or can only pay a portion, contact your mortgage servicer.

It may take a while to get a loan servicer on the phone. Loan servicers are experiencing a high call volume and may also be impacted by the pandemic.

Visit our blog on mortgage relief options for in-depth content to help you understand your forbearance options and avoid foreclosure in light of the coronavirus and the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act.

If you are renting from an owner who has a federally backed mortgage, the CARES Act provides for a suspension or moratorium on evictions. Read more in our renter section of the mortgage relief blog.

Trouble paying your student loans?

If you have student loans, you have options.

If your loan is held by the federal government, your loan payments are postponed with no interest until September 30, 2020.

For other kinds of student loans (such as a federal student loan held by a commercial lender or the institution you attend, or a private student loan held by a bank, credit union, school, or other private entity) contact your student loan servicer to find out more about your options.

Read our FAQs to learn more about what you can do.

Trouble paying your credit cards?

If you’re unable to pay your credit cards, talk with your credit card company and let them know that you cannot make a payment. You may get relief.

You may also want to work with a credit counselor. Reputable credit counseling organizations are generally non-profit organizations that can advise you on your money and debts, and help you with a budget. Some may also help you negotiate with creditors. There are specific questions to ask to help you find a credit counseling organization to work with.

Trouble paying your auto loan?

Your lender may have options that will help. Our tips include changing the date of your payment, requesting a payment plan, and asking for a payment extension

How to work with your bank or credit union

With many of us staying home to help flatten the coronavirus curve, online banking allows you to handle your finances from the comfort of home. Here are some tips for people who are new to online or mobile banking.

Generally, all bank deposits up to $250,000 are insured by the Federal Deposit Insurance Corporation. Deposits at all federal credit unions, and the vast majority of state-chartered credit unions, are also insured up to $250,000 by the National Credit Union Share Insurance Fund (NCUSIF).

How to work with debt collectors

If you currently have a debt in collections, you can work with collectors to identify a realistic repayment plan.

The Bureau offers a number of resources for contacting and negotiating with debt collection companies, especially as we deal with the impact of the coronavirus.

What to do if you lose your income

State and local governments vary in the programs and offerings to help those financially impacted by the coronavirus.

You can look to your state’s unemployment policies to identify current options for benefits. The recently passed CARES Act allows states to extend benefits to self-employed and gig workers, and to provide an extra $600 per week as well as an additional 13 weeks of benefits. Your state’s public health office may also have information.

Older adults may be impacted by the coronavirus and quarantine procedures in different ways than the general public. There may be government benefits available to older adults who need financial help. Visit benefitscheckup.org for more information and to see if you qualify for any state or local assistance.

Be aware of potential scam attempts

Scammers look for opportunities to take advantage of the vulnerable, especially during times of emergencies or natural disasters. Be cautious of emails, texts, or social media posts that may be selling fake products or information about emerging coronavirus cases.

Click here for more information on scams specific to the coronavirus.

The Federal Trade Commission has tips to protect yourself from possible coronavirus-related scams. The FTC and the Food and Drug Administration have also cautioned consumers to be on the look-out for sellers of unapproved and misbranded products, claiming they can treat or prevent coronavirus.

Learn more about how to prevent, recognize, and report fraud and scams.

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Debt, Money Management, National Debt

Ask Chuck: The Bible, Money, and Love

By Chuck Bentley, Crown Financial Ministries

Dear Chuck,

I’m growing weary of our society’s overuse (and misuse) of the word love. I hear and see it in advertising, on social media, and in conversations. If the first and greatest commandment is to love the Lord our God, it appears we’ve confused our priorities. It appears we love money more than Him or His word.  

Love is in the Air 

Dear Love is in the Air, 

Thank you for the great question. I chose to answer your question so I could talk about love and money on Valentine’s Day. Did you know, Americans will spend an estimated $50 billion dollars on Valentine’s Day gifts and activities to show their love to a special loved one. My wife prefers that I save the money for chocolate or flowers on this day and show love throughout the year. 

Love and Money

You have identified a significant problem. When love becomes misunderstood or misdirected, we all suffer. Staggering debt levels, lack of savings, and rising stress suggest we have a spending problem and a heart problem. Even recently, experts have declared that when consumption turns into consumerism, it becomes a social disease

The enemy has convinced people that things will bring happiness. Yet, throughout Scripture, God warns us not to be led astray. He tells us:

  • Love God and others
  • Pursue love
  • Guard ourselves
  • Don’t love the world
  • Don’t love money
  • Life does not consist in the abundance of possessions

Just this week, the Wall Street Journal released information that hints at Americans’ disobedience and confused priorities. Credit card debt rose to record highs during the last quarter of 2019. Spurred by a seemingly strong economy and job market, spending increased dramatically. Unfortunately, the number of delinquent payments rose too. Consider this statistic cited in the article:

“Total credit card balances increased by $46 billion to $930 billion, well above the previous peak seen before the 2008 financial crisis, according to data released by the Federal Reserve Bank of New York on Tuesday.”

Debt brings stress and bondage. People are unable to live as God designed when they are strapped with debt. In today’s world that includes credit card debt, student loan debt, car loans, mortgages, personal and payday loans. It prevents many from saving money to be used as God directs. Bankrate’s recent poll shows only 41% of Americans could cover a $1,000 emergency with savings. 

The Apostle Paul wrote: “You will be enriched in every way to be generous in every way, which through us will produce thanksgiving to God.” (2 Corinthians 9:11 ESV)

There’s only one reason God supplies a surplus of wealth to a Christian: so that he or she will have enough to provide for the needs of others. True wealth comes with the responsibility of giving. God promises blessings to all who freely give and His curse on those who hoard, steal, covet, or idolize.

Giving is the foundation of a life lived in selfless devotion to others. It fulfills the second greatest commandment, to love our neighbor as ourselves. Preoccupation with things of this world gets us sidetracked. We lose sight of our final destination and the purpose for which God has us here. 

Billions of dollars dedicated to credit card spending confirms that we have confused our wants and needs. We have forgotten our neighbor and the Lord’s statement: “It is more blessed to give than to receive” (Acts 20:35 ESV)

When asked about the greatest commandment, Jesus answered: “..you shall love the Lord your God with all your heart and with all your soul and with all your mind and with all your strength.” (Mark 12: 30 ESV)

Divided hearts have divided priorities and those are evident in the way we handle money. That is why He teaches us in Hebrews 13:5 “Keep your lives free from the love of money and be content with what you have because God has said, ‘Never will I leave you; never will I forsake you.’” (NIV) Here is a simple test to know if you love God or money. How do you react when you lose money? Are you in a panic, upset or even angry? Remember, our hope is in God, not the money that he provides. Money will leave us; He will not.

Save Your Way Out of Debt

One way to reduce stress is through automatic saving. The Eli app is a tool that can improve your financial health so you can experience greater levels of freedom in your life. Check out the new Eli app to begin an automatic savings program to reduce your stress and increase your freedom to love God and others as you faithfully pay off your debt. 

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Credit Score, Debt, Finance, Money Management

How Credit Score Can Affect Relationships

By NACCC

Personal finances are rarely discussed but often the biggest strain on a couple. Even in early courtships, a newly dating couple may fret over who will pay for dinner, or have different tastes in entertainment based on affordability. Topics such as careers, hobbies, and interests can easily spill into money talk. Money is just as important as other relationship issues such as family and personal interests.

Whether you’re spending your Valentine’s Day with a long-term partner or having a first date, a conversation about credit scores can provide valuable insight to be considered for relationship planning. Credit scores are always assigned to an individual, never a couple. But joint accounts can have an effect on those individual credit scores.

Credit Score Disparities Can Predict Future Relationship Problems

According to a report by the Federal Reserve, couples with similar credit scores are more likely to stay together, while those with a larger disparity are more likely to separate. Differing spending habits, opposing views on debt and other financial problems can cause stress on the relationship that those with similar credit scores are less likely to experience.

Examples of difficulties these couples may face could include:

  • Lingering debt from the past
  • Poor spending habits
  • Disparities in household financial contributions
  • Difficulty obtaining a mortgage or other important loan together
  • Hiding or avoiding spending, debt or other financial issues
  • Bills and expenses
  • General financial stress

Of course, we aren’t suggesting to dump your partner at the slightest score difference. But it’s important to communicate with each other about personal finance and plan appropriately. If a partner has a low credit score (or no credit), what steps can be taken to improve the score for the long-term? Relationships are about working together, and a partner with a higher score may be able to provide advice and suggestions to a partner with a lower score.

It Takes Trust, but a Low Score isn’t the End

If there is a large disparity in credit scores, both partners should evaluate whether they are prepared and willing to provide the support, communication, and shared responsibility required to fix the credit problem.

Committed couples can move forward with confidence by working together to build both of their credit scores. Two quick strategies for building credit include:

  • Having the partner with the higher credit score add the partner with the lower credit score as an authorized user on a credit card (this method requires a lot of trust!)
    • Remember, married couples do not share a credit score, but behavior in joint accounts can affect both partners’ scores.
  • Using a secured credit card to build credit

If one or both partners have debt, they should work together to develop a spending plan that leaves additional income to pay off the debt. For those in debt, paying off the debt is the best way to improve a credit score.

If one or both partners are struggling in their career, they can come up with a plan to support each other while working towards more prosperous career goals. Couples can turn a weak credit score into a strength by using it to incorporate accountability, good habits, and stronger trust in their relationship.

Conversation is Key

Overall, couples need to communicate about money to maintain a successful relationship. Just like with personal finance issues, avoiding the matter doesn’t solve problems or build wealth. Couples should discuss:

  • Existing debt
  • Joint accounts
  • Credit accounts
  • Spending habits (both good and bad)
  • Major purchases
  • Bills and household expenses

This leads couples towards better financial planning and spending habits as they move forward.

Couples can start with small discussions in the early stages, and then move on to larger discussions later. For example, a couple in the beginning stages of a relationship could discuss the cost of dinner, or compare the costs of phone, cable or utility bills. They may talk about debt or salary, but not go into the specifics or the numbers. Couples in more committed stages can begin more difficult conversations about existing debt, bank accounts, and long-term planning.

If a partner is unwilling to discuss finances or is quiet on the subject, the other partner can start small by mentioning their own personal finances and ask for thoughts and opinions.

At times, there will be misunderstandings and frustrations. Remember that no two people share the same financial education. Financial knowledge that may seem simple and obvious to one partner may be an entirely new concept to the other. Use money talk as a learning opportunity and a habit to build on stronger communication skills.

Everyone has different financial paths. When two paths join, they decide where to go next, together.

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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 wellbeing 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 are 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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Economy, Finance, Money Management, Personal Goals

Ask Chuck: The Secret to a Secure Future

By: Chuck Bentley, Crown Financial Ministries

Dear Chuck, 

I am burdened with the terrible things I hear in the news. I’ve become anxious and wake up worried in the middle of the night. I’m especially struggling with the fear of not having enough money in the future. I grew up in poverty and have worked hard to avoid that for my family. How can I feel more secure about the future in times like these? 

Fearful

Dear Fearful,

Thank you for your honest confession. Many live in fear of their financial future but deny it and continue to silently struggle. My father grew up in poverty as well. Like you, he worked hard to provide for his family. We lived in a government housing project early in my life. But Dad worked long hours, went to college in the evenings, became a CPA, and made many sacrifices in an attempt to give us a secure future.

Statistics are grim and that breeds fear. Since nearly 40 million households have no retirement savings, The Employee Benefit Research Institute estimates a nationwide retirement savings deficit of $4.3 trillion. Society has instilled in us the idea that we need to make a financial plan before it’s “too late.”

People worry about job security and whether they can pay the bills. As Larry Burkett used to say, “the ‘what if’s’ will rob us of all joy.” What if I can’t afford the cost of medical services, assisted living, or help my children with a college education? What if negative interest rates happen and hurt my portfolios? What if the stock market crashes? These types of negative scenarios are endless.

Refocus your Security

Many Christians literally rob God and sometimes their families as they live in the cycle of fear and worry. The growing mania for buffering ourselves against any possible future event is straight from the deceiver. Jesus told us to build our house on rock (Himself) and not sand (the world).  

Everyone then who hears these words of mine and does them will be like a wise man who built his house on the rock.  And the rain fell, and the floods came, and the winds blew and beat on that house, but it did not fall, because it had been founded on the rock.  And everyone who hears these words of mine and does not do them will be like a foolish man who built his house on the sand. And the rain fell, and the floods came, and the winds blew and beat against that house, and it fell, and great was the fall of it. (Matthew 7:24-27 ESV)

This parable points out the futility of placing our confidence in money. When our sandcastle of affluence comes tumbling down – and it will – our faith had better be founded in the person of Jesus Christ – not in material security. 

Symptoms of Fear of the Future

  • Self-preoccupation
  • Anxiety and sleep issues
  • Unhealthy frugality
  • Financial infidelity
  • Hoarding
  • Marital stress
  • Bitterness
  • Separation from God
  • Lack of Contentment 

 If you suffer any of these symptoms, I must ask a simple question: Do you really trust God? Circumstances are uncertain for all of us. God designed it this way so we would learn to become dependent upon Him. 

Breaking the Fear and Worry Cycle

Our thoughts impact emotions. We must choose to surrender our fear of the future each day. Otherwise, unrealistic expectations or “what-if” scenarios will cause you (or me) chronic anxiety. God is trustworthy and loves us beyond comprehension. He promises to work all things together for good for those who love Him and are called according to His purposes. (Romans 8:28)

  • List every resource you have and transfer ownership to God, recognizing you are simply a steward.
  • Align your mind and heart with God, the owner of everything.
  • Embrace God’s counsel from His Word for each decision.
  • Use His instead of my to bring Christ’s Lordship into the details of your life.

In Hebrews, we read of those who surrendered their will and acted on faith in God. They were rewarded by Him – but not the world. 

  • Now faith is the assurance of things hoped for, the conviction of things not seen. For by it the people of old received their commendation.  (Hebrews 11:1-2 ESV)
  • And without faith it is impossible to please him, for whoever would draw near to God must believe that he exists and that he rewards those who seek him.  (Hebrews 11:6 ESV)
  •  And all these, though commended through their faith, did not receive what was promised, since God had provided something better for us, that apart from us they should not be made perfect. (Hebrews 11:39-40 ESV)

So, regardless of how well you’ve planned for the future, you must trust God with it all one day at a time.  

How to Trust God

  • Seek God’s direction for your life – not someone else’s.
  • Make a conscious act of trusting God. Make a material commitment to express your faith by becoming more generous.
  • Be patient and develop an eternal perspective.
  • Pray diligently for faith to trust Him more.

Practical Steps

  • Set realistic goals
  • Release the past
  • Give to God first and increase your generosity
  • Save more, spend less
  • Establish an emergency fund – but cap it to avoid hoarding
  • Pay off debt
  • Write a will
  • Plug into a church
  • Seek Godly mentors

I pray that these simple steps are helpful to you and that they help to put your worries at ease. But most of all, I pray that as you grow to trust God more and more every day, you become deeply assured of the security that you have in Him. Trust Him to be your provider and protector through life’s uncertainties.  God is faithful even if all the money is lost. Ultimately, your faith (confident trust in Him) will prove of greater worth than silver or gold.

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Credit, Credit Score, Money Management

A No-Cost Way to Prepare Your Credit for a Big Purchase

By: CFPB

Thinking about buying a house, car, or other big-ticket items, and know you’ll be using credit? Before making a big purchase, your first step should be to take a look at all of your finances. Check out these five steps to prepare your finances that won’t cost you a penny!

1. Take advantage of your free annual credit reports.

You can visit AnnualCreditReport.com to get a copy of your credit reports for free. The three nationwide credit reporting companies – Experian, TransUnion, and Equifax — each have to provide your free credit reports every 12 months – but only if you request them. You can check the three reports periodically throughout the year or all at once. If you decide to request one report every four months, you can monitor your credit reports more frequently throughout the year.

2. Review your credit reports for inaccurate information.

Take a close look at your credit reports to make sure all the information on your report is correct. According to an FTC study, one in five people have errors on their credit report. Not sure what to look for? Here’s a list of common credit report errors to help you through the process. 

3. Dispute credit report errors with the credit reporting company that sent you the report.

Incorrect information on your credit report may hurt your ability to get new lines of credit or may make the terms of credit more expensive. You can dispute inaccurate information with the credit reporting company. You can use these instructions and template letter as a guide.

4. Dispute credit report errors to the company that provided the information.

The company that provided or “furnished” the information to the credit reporting company is known as the “furnisher.” Furnishers could be your bank, your landlord, or your credit card company. You can dispute inaccurate information directly with the furnisher. Use this template to send a letter to the company that provided the information you’re disputing.

5. Make a plan.

Even if you don’t have errors on your credit report, reviewing your report can help you make a plan for how to improve your credit. For more help putting your plan together, download this guide to Rebuilding Your Credit.

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