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7 Better Ways To Use Your Tax Refund

Are you expecting a tax refund soon? If you’re like most Americans, you’re probably expecting somewhere around $3,000 to show up in your mailbox over the next months. Receiving a refund check has become a strangely normal piece of financial planning for Americans – we count on receiving that extra cash and plan to spend it.

But your refund check is just your own money going back into your pocket. I recommend you adjust your withholdings for the next tax year so you can have more money in your hands every month instead of lending it to the government interest-free all year. And if you are planning to receive a refund this year, here are 7 better ways to use it!

1. Save.

Did you know that 70% of Americans don’t have $1,000 saved? In fact, six out of 10 Americans couldn’t even access $500 in an emergency. And 34% of Americans said they don’t have any savings…at all.

Saving is not only critical to getting out of debt and building a stable financial future, but it’s also an essential part of stewardship. Saving does not represent a lack of faith, it reflects the heart of a faithful steward. Planning to care for your family, disciplining yourself to create financial margin, and balancing your savings are all opportunities to honor God and experience His blessings.

We recommend you make your first savings goal $1,000; then work your way to 3 months’ worth of your living expenses; then 6 months’, and finally 12 (you can track all these goals on Crown’s Money Map). If you’re working to reach any of these savings goals, commit to depositing your refund check directly into your savings account. According to a survey, 43% of Americans are planning to do so!

2. Pay Off Debt.

Barely second, 42% of Americans are planning to use their refund to pay off debt. As Proverbs says, the borrower is slave to the lender, so using your refund to pay off debt can help you break the chains of financial bondage and debt.

If you’re specifically dealing with credit card debt too large to be paid off by your refund check, I want you to get in touch with our partners at Christian Credit Counselors. They specialize in helping people pay off their overwhelming credit card debt and can walk you through the process of becoming debt-free.

We also have debt-help resources available for you to create an efficient payoff plan. Go through the 5 Steps to Debt-Free Living video course (it’s free) to get access.

3. Give.

Giving is a material expression of our spiritual obedience to Christ. It’s our way of acknowledging that God is the owner and provider of all we have and that we are His stewards. It’s described in the Bible as a practice that will bring overwhelming blessings and gifts to our lives. Yet we are out of practice and undisciplined when it comes to obeying the Scripture.

Jesus said, “It’s more blessed to give than to receive.” (Acts 20:35)

He also said, “Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you.” (Luke 6:38)

Giving requires an emotional sacrifice of forfeiting ownership. It propels us into a freedom found in exercising faith, by believing God will use our gift and supply our need. Be sacrificial and commit your refund check to your church or a reputable ministry that has impacted your life.

4. Build a Nest Egg.

Not saving enough for retirement soon enough is the number one regret of older Americans. As more and more people realize that their dreams of a Floridian retirement are decades of saving short, remember that you are saving to be used by God, not to live a life of leisure.

A detailed, disciplined retirement savings plan is important to have financial freedom. Research what kind of retirement account and investing strategy best suits your age, family, career, and future needs and then be disciplined to save. Adding your entire refund check to your nest egg will help ensure a stable financial future for you and your family so you will be free to be used by God.

5. Invest.

If you have at least 3-6 months of your living expenses saved, no debt, a habit of disciplined and generous giving, and a growing retirement account, then consider using your refund check to invest.

The Bible does not condemn investing and Christians should see it as an opportunity to increase their impact for the Kingdom. The stock market’s volatility this year has been in recent headlines, so be cautious and patient to do your research and seek wise counsel. With the right strategy and patient timing, a $3,000 refund check could yield you much greater returns later.

6. Prepay Your Mortgage.

Avoid wasting money on interest on your home’s principal by using your tax refund to prepay your mortgage. Throw a portion of or your entire refund check directly towards your principal balance on your house and shave months off of your loan! (Be sure to specify that you want to pay towards your principal when you make the deposit. Otherwise, a large portion could still go to interest payments.)

7. Spend to Save.

There are some things that you should spend money on to save money. For example, my wife and I are diligent about keeping our cars well-maintained and routinely spend money to rotate our tires, change our oil on time, and care for our vehicles.

Take care of your home, your vehicles, and your appliances by using your refund check to pay for updates and maintenance. It may not be an exciting use of your money, but it will pay off in the long run.

By Chuck Bentley, Crown Financial Ministries

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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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    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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              Christian Credit Counseling
              Christian Credit Counselors

              Credit Counseling – Financial Habits for the Future

              Managing Money Management

              Some behaviors predict poor money management down the road, but you can take positive steps for a positive future with the help of Christian credit counseling. According to a piece by cheatsheet.com, there are 5 main behaviors that foreshadow financial difficulties in the future. When you receive Christian credit counseling, you open up yourself to positive solutions instead of negative patterns. People who succeed in the area of personal finances establish good saving and spending habits early in life. Even if you are older, it’s not too late to learn how to keep a budget, save and plan.

              Budgeting not to Overspend

              When you get in the habit of keeping a budget, you curb the urge to overspend. People who spend more than they earn often use credit cards. By agreeing to a debt management plan, you set aside money every month to pay back your credits. With the help of trained credit counselors, you end up paying less interest on the credit cards as part of the debt management plan.

              Avoiding Poor Financial Habits

              One habit that frugal people have is to buy used items or accept clothing for items from loved ones and relatives instead of always having to buy new. Buying everything new is a poor financial habit that also affects credit card behavior. Most people don’t use credit cards when they barter or trade with friends or family, but they do use credit cards when buying overpriced new items. New merchandise simply costs more.

              Money and Your Spending Habits

              Whether you earn all your income or receive money from relatives or stock dividends, it is important to know exactly how much money is coming in and how much is going out. If you consistently spend more money than you have, you likely rely on credit cards. People spending more money than they make often feel stress and anxiety, experts say.

              Money and Retirement Planning

              Another good financial habit to adopt is saving. If you save just 10 percent of your income for retirement, you will likely have enough to supplement social security when you are older. By having a debt management plan and budget, you can put aside a certain amount to pay back debts, a percentage for retirement savings and the rest of daily expenses and bills.

              Avoiding Financial Troubles

              Experts say people who fail to save for emergencies have financial trouble in the future. With Christian credit counseling, you receive the education and tools to improve your financial habits. Because of the Christian mindset, you don’t experience any judgment.

               

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                At Christian Credit Counselors, we want people to experience financial peace. For more information about how to adopt better money management behavior and to get out of debt, please contact us.

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                Debt Counseling
                Credit Counseling, Debt

                Debt Counseling – When Financial Problems Sneak up On You

                Signs of Financial Trouble

                Past due statements, accounts closed without you and payments that reflect the minimum due are of few of the red flags that you need debt counseling. If financial problems are sneaking up on you, the best solution is to confront your reality and take positive steps to remedy the situation. According to a piece by cheatsheet.com, there is nothing to feel ashamed about if you have credit card debt that is higher than you realized.

                Relying on your credit card too often is an innocent habit that turns into a larger problem if left unchecked. Instead of remaining in denial, consider the signs of financial trouble. By enrolling in a debt management plan through a Christian credit counseling agency, you turn a negative into a positive situation. When you are completely debt free, every purchase you make will feel sweeter because you can afford the item.

                Borrowing money from others

                If you borrow money from family and friends, it can either be a positive or negative sign. Some people borrow money or take financial gifts from relatives so they can avoid running up credit cards. If you have to pay back a friend or relative, it can strain the relationship. Also, if you turn to friends or family because you have already maxed out your other sources of loans and credit, it is a major financial mistake.

                Dealing with bill collectors

                Another warning sign you your financial problems are interfering with your life is when you receive calls from bill collectors. With the help of a trained and accredited credit counseling agency, you don’t need to worry about bill collectors. A credit counselor talks to your creditors for you to come up with an agreed upon plan for debt repayment. For you, it’s all about making one monthly payment. For your creditors, it is about making right on money owed to them.

                Credit Cards and Debt

                If you rely on credit cards to pay for the basic necessities such as food and gasoline, it is likely you have too much debt. With debt counseling, you learn how to budget so you spend your paycheck on necessities first. Discretionary purchases include cigarettes, alcohol, entertainment, clothing other than work clothes and luxury items.

                Feeling paycheck dependent

                If you need your paycheck to make your monthly rent or mortgage, it means you don’t have enough in savings to cover one or two months of expenses. With debt counseling, you learn how to save up for emergencies as well as for fun vacations and holidays.

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                  Debt Consolidation
                  Debt Consolidation

                  Debt Consolidation – Forgiving Yourself of Credit Sins

                  Credit Cards and Financial Health

                  Misusing credit cards affects your financial health, security and future. You can easily forgive yourself of so-called credit sins by seeking assistance from a Christian credit counseling program. One of the most positive ways to get back on track is with debt consolidation. According to an article by cheatsheet.com, 30 percent of your FICO score relates to how much you owe on credit cards. If your balance gets too high and you can’t pay off the total balance, debt consolidation can help. The key is to stay calm and avoid several credit blunders.

                  A Five Step Debt Management Plan

                  Creditors and Debt Collectors

                  One of the challenges you often have to deal with when you have a high credit card balance is debt collectors and representatives from your credit card companies. By working with a credit counselor, you put the problem in someone’s capable hands. Calls stop after you sign up for a debt management plan because your creditors agree to a specific monthly repayment plan. To get to that positive place, put aside anger.

                  Your Personal Finances

                  Another credit blunder is refusing to seek personal finance help because of pride. A lot of people seek Christian credit counseling because they don’t want to feel shamed or ridiculed for mistakes. A certified credit counselor with a Christian mindset will give you advice on debt consolidation without judgment.

                  Embracing Frugal Finances

                  No matter what your situation, you can find new and creative ways to practice frugality. Another credit “sin” is to pay only the minimum balance on a credit card. When you resist the temptation to overspend, you fix the problem instead of exasperating it.

                  Credit Cards and Debt Management

                  When you agree to a debt management plan to pay off debt, you stop using your old credit cards. It is also important to stop opening up new credit lines. A credit counselor helps you budget, plan and save so you can avoid repeating the same financial mistakes.

                  Overcoming Credit Problems with Contentment

                  When you find happiness with the things you already own instead of constantly wanting something bigger or better, many of your credit problems disappear. After getting on board with a debt consolidation plan, give yourself some space to feel happy. Instead of soothing your stress and troubles by spending money, find other ways to relax such as a free walk in nature or time with friends and family.

                  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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