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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Uncategorized

6 Tips for Spring Cleaning Your Finances

By: American Bankers Association (ABA)

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

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

Here are six tips to help you organize your finances:

  • Review your budget.

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

  • Evaluate and pay down debt.

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

  • Set up automatic bill pay.

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payments to ensure your checking account has an adequate amount of funds when the payments are scheduled to be withdrawn.

  • Save for emergencies.

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

  • Go digital.

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

  • Check your credit report.

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

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

Corey Carlisle, ABA Foundation
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Uncategorized

Ways to Improve Your Financial Capability Now

By: America Saves

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

1. Have a Disaster Plan for Your Finances.

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

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

2. Check Your Financial Well-Being.

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

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

3. Make Sure You’re Properly Insured.

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

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

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Debt Counseling
Budgeting, Debt

Finances, Debt Counseling, and Marriage

Money and Marital Bliss

According to the Huffington Post, marriage is not just an emotional commitment but a financial one as well. When you enter into a marriage, you often share wealth as well as debt. Money problems are the top reasons cited for marital conflicts. When you seek debt counseling with your spouse, you are more likely to build financial intimacy.

Money tips for Marriage

  • Set Financial Goals
  • Seek Credit Counseling
  • Discuss Financial Habits
  • Talk about Money Decisions
  • Be honest
  • Talk at least once a month
  • Set benchmarks for your finances (Saving for retirement)
  • Set a budget

Setting a Debt Management Plan

After receiving debt counseling, you will know more about debt consolidation to handle credit card debt. If you have credit cards with high interest rates, you can often pay less in interest with debts under the umbrella of a debt management plan.

Couples can celebrate small financial victories such as sticking to a budget or saving money when grocery shopping for the week. After paying off credit card debt with a debt management plan, you can find low-cost ways to celebrate. Many couples take the money they used to spend for their monthly debt payment and use the money to fund a vacation, IRA or emergency fund.

Other financial questions to discuss with a credit counselor and your spouse include how to pay bills together, plan for the future and improve credit scores. A trained credit counselor doesn’t judge, but helps facilitate hard conversations about money.

 

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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    Credit Counseling
    Credit Cards, Credit Counseling, Debt, National Debt

    Credit Counseling and Rising Debt

    Debt and Credit Counseling

    Household debt is reaching unsustainable levels, according to a report by NerdWallet. Another article in The New York Post states the average household debt in the U.S. is about $16,000. By arranging credit counseling or yourself and your family, it is possible to deal with staggering credit card debt. Most Americans pay a lot of money to cover interest charges over the years.

    Though, those statistics only take into account families carrying debt. Experts point out many Americans defaulted on their credit card debt in 2008 during the Great Recession. Instead of declaring bankruptcy, a positive solution is debt consolidation. A trained and certified credit counselor helps you avoid debt settlement scams and bankruptcy.

    Credit Card Debt and Your Roth IRA

    According to some reports, many Americans pay as much as 20 percent every month in interest. The best way to deal with staggering debt is to consolidate your payments through a debt settlement plan. Your creditors typically agree to lower the interest rate while you pay back the money you owe. The plan is simple because you only make one payment every month to satisfy all your credit card creditors. With an automated payment plan, the process becomes simple and stress-free.

    According to the report, American households pay more than $6,000 a year in interest. With an extra $6,000 each year, you can easily max out a Roth IRA or other retirement account as well as save for the future.

    Revolving Credit Card Debt

    According to an article in Mainstreet, paying down credit card debt is a top priority for Americans. But it could take up to 40 years for some families to pay down their credit cards, if they only pay their minimum payments every month. With the New Year on the horizon, make paying off debt a resolution.

    With credit counseling, you learn how to stop the revolving credit card debt trap. A debt consolidation plan stops the bad cycle because you stop using credit cards as you pay off a debt management plan.

     

    Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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      Debt Counseling
      Budgeting, Credit Counseling, Credit Score, Debt, Finance, Holiday Tips

      Debt Counseling and Holiday Credit Card Debt

      Debt Counseling and Christmas

      Most people love spending money on their family and friends, wrapping presents with shiny bows and watching their expressions as they open gifts. However, Christmas is a bittersweet holiday for people with excessive credit card debt. By seeking debt counseling before or after the holidays, you take control of your holiday credit card debt.

      According to an article in the Huffington Post, many shoppers experience the shopping hangover after major shopping days such as Black Friday. Even if you shop on major sale days, you don’t get ahead by using credit cards if you can’t pay them back. Revolving credit card debt is at the highest level it has been in several years, according to the Federal Reserve. Debt counseling gives you an edge so you start the New Year on the right path.

      Credit Card Debt Repayment

      If you can only afford to pay the suggested amount due or minimum due, you will benefit from debt consolidation. By receiving debt counseling, you find out how to budget to pay back all of your credit debt as well as monthly bills and expenses. With a debt repayment plan, you figure out how to get out of credit card debt for good.

      By consolidating debt you pay off credit card debt and satisfy your creditors. If you take a different approach such as using a balance transfer credit card, you could end up running up even more credit card debt. Debt counseling helps many consumers overcome the temptation to keep putting items on credit instead of setting the credit cards aside.

      Credit Counseling and your Finances

      If you just want a short-term fix, pay your minimum balance or transfer credit card balances to a new credit card. However, experts say most credit cards charge a 3 percent transfer fee. Also, paying the minimum amount doesn’t lower your interest rate. A credit counselor helps you actually lower the interest you pay on your credit card debt so you pay it all off in less time. A long-term fix is about examining your spending habits, learning how to boost a credit score and budgeting. Many consumers fall into traps. You can change your spending and savings habits with a few simple personal finance tricks.

      Although the holidays are all about giving, it is a good time to treat yourself to debt counseling. With a proper budget, you can buy loved ones holiday gifts and avoid lingering debt.

       

      Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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        Christian Credit Counselors
        Christian Credit Counselors

        Credit Counseling – Five Steps to Crush Debt

        Crushing Credit Card Debt

        People who struggle with a crushing amount of credit card debt often feel motivated and positive after receiving Christian credit counseling. Trained and qualified credit counselors work with consumers overwhelmed by debt without passing judgment. According to a recent article by wisebread.com, there are 5 action steps you get a grip on personal finances. Christian credit counseling helps with all of the steps. Debt statistics by NerdWallet shows the average family in the U.S. owes more than $16,000 in credit card debt. Although some consumers feel helpless and frustrated by debt, having a realistic debt management plan helps you turn around the situation.

        Stop using Credit Cards

        One action step to take to crush debt is to stop adding to your existing debt. When you agree to a debt management plan, you agree to stop using the credit cards. A debt consolidation program often lowers your monthly expenses so you can save more. Most people find it easier to pay bills and live below their means when they money put aside in savings.

        Lowering Your Credit Card Interest Rate

        With Christian credit counseling, you receive the help you need to lower the interest rate on your credit cards. A credit counselor negotiates for lower interest rates. Experts say some credit card companies will not lower interest rates for consumers even when you ask nicely. However, the expert credit counselors know how to negotiate and help you meet your financial objectives.

        Agreeing To Down Debt

        Instead of agreeing to a payment plan with each credit card on your own, you will likely find more success by consolidating debt. It is a lot easier to make one debt payment each month, especially when you can enroll in an automatic repayment plan through a bank. In some cases, people who consolidate debt through a Christian credit counseling agency get out of debt 80 percent faster than those who take the DIY approach to debt repayment.

        Spending Less Money

        Although it is important to pay your utility bills, try to limit mindless spending. Also called discretionary spending, some of the items skip include clothing, entertainment, cable and vacations. Once you are debt free, you can resume the spending. Some people continue to treat themselves with free rewards such as a hot bath or walk.

        Earn More Money

        A final action step to take is to increase your income so you pay off your debt. The secret is to funnel any extra money you have into your debt management plan payment first. The second priority is savings.

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            Credit Counseling

            Credit Counseling – Paying Down Debt

            Debt Management Programs

            A lot of people who receive credit counseling wonder if they qualify for a debt management program to pay off debt. Debt management programs are so appealing because a trained and certified credit counselor negotiates a lower interest rate so you can make a monthly debt payment. Many consumers dream of living a debt-free life. Credit counseling makes it simple and easy. To qualify for an intensive plan to pay off debt quickly, it is important to look at where you are and where you want to go. According to a piece by the Great Fall Tribune, credit counseling gives consumers a chance to take control of their situation. However, not everyone qualifies for a more intensive plan to pay off debt.

            Credit Cards and High Interest Rates

            If the interest rate on your credit cards are 24 percent or higher, you are likely a good candidate for an intensive plan to pay off debt. Struggling consumers often deal with high interest rate credit cards that put them on a never-ending debt cycle. Credit counseling provides a positive solution to the financial dilemma.

            Earning Extra Money

            If you aren’t making a lot of money, consider getting a second job or better position so you can afford the agreed-upon monthly debt management program payments. With credit counseling, you learn how to set income and savings goals.

            Your Credit Score and Credit Counseling

            People with low credit scores inevitably benefit from good credit counseling. Whether you decide to consolidate debt or pay off your debt on your own, you will grow wealth more easily by knowing the secrets of a good credit score. Having a good score often means lower interest rates on car loans and mortgages and better job opportunities.

            Life Beyond Credit Cards

            When you enroll in a debt management program you agree not to open up any new credit cards. You can still benefit from the sage financial advice of credit counselors even if you don’t enroll in a program. However, most consumers do well when forced to live within their means by relying on debit cards and cash.

            Other benefits of credit counseling include advice on reducing spending, paying off debt and changing poor financial habits that led to excessive debt. At Christian Credit Counselors, we help consumers struggling with substantial debt. For more information on credit counseling and tips for paying off debt quickly, please contact us.

             

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              Debt Consolidation
              Debt Consolidation

              Debt Consolidation Instead of Dipping into Your Savings

              Saving Money for your Savings Account

              When it comes to credit card debt, some experts recommend dipping into your non-retirement savings to pay off your debt. However, people without adequate emergency savings rarely stop the cycle of credit card dependence.

              With a debt consolidation plan, you are more likely to get out of credit card debt for good. A trained credit counselor works to lower your interest rate, giving you a solid debt management plan with a target payoff date so there is light at the end of the tunnel.

              Tapping cash reserves is often risky because your credit card company could choose to close your account or lower your credit limit. If you are dealing with an unexpected financial emergency, it pays to have at least three to six months of living expenses set aside in a liquid account. Some consumers choose debt consolidation as a way to get rid of debt, but aren’t sure how to handle their savings goals and habits.

              Finances for the Future

              According to a Journal of Family and Economic issues study, people with household debt often feel depressed. By lowering debt and boosting savings, you improve your mood and outlook on life. Debt consolidation helps you get out of debt, which is especially important for people who are single, ages 51 to 64 and without a college degree, the study found.

              Saving More Money

              In addition to saving more money now by lowering your interest rate on credit cards, debt consolidation helps you lay a better financial foundation for the future. After you complete your debt management plan, you can shuffle the money used to pay off credit cards to beef up your emergency fund. It is also a good idea to set at least 10 percent of your income aside for retirement savings.

              With help from a Christian credit counseling agency, you repay your debt to meet obligations and set yourself free from negative guilt and remorse. Many people who complete a debt management plan feel motivated to advance in a career or save more for the future because of the fresh start and feeling of gratification and completion. In some cases, you pay off credit card debt 80 percent faster with debt consolidation compared to other financial strategies.

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                Debt Counseling
                Debt

                Debt Counseling for First-Time Credit Card Holders

                Credit Cards and Financial Predicaments

                If you are a first-time credit card holder, you likely viewed the card as a vehicle for getting you where you needed to go in life. Whether you used your credit card to pay for a new computer, clothes or vacation, the idea of maxing out a credit card scares many new card users. By receiving debt counseling you can prevent a financial predicament as well as solve the problem of runaway debt. A recent article by cnbc.com suggests using the card to build up a good and solid credit card history. By talking to a trained and certified credit counselor, you learn what makes up a good credit report as well as ways to budget and plan for financial emergencies.

                Mounting Debt

                Experts say one of the reasons young credit card holders face a mountain of debt is because they associate a lot of fun and pleasure with credit card use. It is fun to swipe a credit card as opposed to parting with cash. To overcome the challenge, seek debt counseling. Budgeting, saving and planning is often fun when you get creative about your goals. For example, reward yourself with a special reward for staying on budget or meeting savings targets. Plan a major reward for yourself after completing a debt management plan to pay off all your credit card debt.

                Lowering Credit Card Interest Rates

                Many first-time credit card holders feel duped into credit cards with high interest rates. Instead of feeling helpless, rely on a Christian credit counseling agency to negotiate lower interest rates with your creditors. High interest rates of 18 percent or higher are not uncommon, but you can realistically achieve a lower rate by consolidating your debt.

                Monitoring Your Credit Report

                With debt counseling, you also learn how to monitor your credit report. When you become aware of what makes up a good credit score and report, you take the action steps to improve your situation. A good credit score affects your ability to buy a home, take out a car loan as well as get a job in some cases. Misusing credit cards is a common predicament but a credit counselor provides non-judgmental guidance.

                 

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