Today on MoneyLife with Chuck Bentley
Monday, January 11, 2010
Your Email Questions Answered
We're going to do an entire program soon on setting goals for the new year. One of the top resolutions for people each year is to get on a budget. *** Dear Chuck, My New Year's resolution is to get on a budget, but my husband doesn’t understand why we need one. How should I get started? – Daisy in Sewell, New Jersey Daisy, this has to be one of the most common questions we get about budgeting. If you budget, you know where your money is going. You can spend with purpose. If you don’t have a budget, you’ll spend a lot of time wondering where your money went. If you can explain the benefits of forward planning with a budget to your husband without attacking him, you can get on the same page. I know it’s difficult, don’t give up.
Dear Chuck, I’ve been married for 20 years. My husband is self-employed, and we have five children. I’ve always been in charge of our family’s finances, and they’ve been a stress for me, to the point it has taken a toll on my health. We’re fairly cash strapped, and budgeting, although I believe it’s the first step out of our dilemma, just seems to add to my stress and frustration. I've tried many times, but I never actually pull it off. I've cried and prayed for years about financial pressures, and I really think I'm just supposed to ask for help. - Anonymous Many people are in your dilemma. They feel like a failure trying to do anything requiring discipline.
There is hope.
Resolve to live faithfully one day at a time by a spending plan.
Don’t focus on weeks, months, or years.
Focus on being successful one day at a time.
Come up with a written spending plan.
Go over it with your husband.
Tell him it’s a plan to help you be successful and reduce stress.
Pick a way to celebrate if you’re successful after three months.
Dear Chuck, How do I adjust my current budget now that my husband has retired, and our health care premiums will now be over $1000 a month? – Sally in Grand Rapids, Michigan Sally, change your health coverage to a catastrophic plan. It will have high deductibles and only cover medical expenses when they reach that level. It's a good option if you don’t use your health insurance a lot. Another option is a medical sharing plan. Pool your resources with other people to share expenses. It's not insurance. Instead, it’s a group of people who commit to make regular monthly contributions to meet the medical expenses of the group. You make a request when you need help paying your medical bills. Members must be Christians and commit to living a healthy life and living by Biblical principles. There are lots of sharing plans, some are better than others, so research them thoroughly. Keep your current insurance coverage intact until you have switched to something else. See these links:
Dear Chuck, I am a 24-year-old who is currently pursuing an MBA in HR Management. Currently, I use my undergraduate degree in music education to teach private music lessons part-time while I am in grad school full-time. I am emailing to inquire about the best way to invest money now, when I have little extra, and on into the future when I hopefully have a steady, full-time job. I have heard your advice about diversification and other biblical principles, but I have a practical question. Is investing something I should keep up with myself or pay someone to do for me? – Allyson in Plano, Texas Do both, Allyson. Be informed about what you’re investing even if you pay someone to handle your investments for you. You must hold them accountable. Be a good steward of what God has given you. Best investment you can make is in your part-time business. Advertise, make sure you have the space and equipment you need to grow the business. Use your surplus income to build up your savings. Then, consider investing. Educate yourself about the risks and understand your investments. See these links: Dear Chuck, I’m a sophomore at Cedarville University, and I have made it my goal to graduate debt-free. Thus far, through savings, investments, scholarships, grants, working, and help from my parents, I have been able to avoid all student loans. However, I now have very little money left over for my final two years. My parents have five younger children to provide for, so I don't want ask them to keep helping me. Scholarships are hard to come by, and I’ve made a resolution to tithe a little more than 10% out of my salaries. I don't have a car or use credit cards. Do you have any suggestions for how I can stay debt-free? – Miriam in Cedarville, Ohio Miriam, your email should inspire every college student and parent that you don’t have to use debt to go to college. I appreciate your commitment to be debt-free and encourage you to stay with it. You’re doing the right things by working, saving money, looking for scholarships, and looking to the Lord. God will provide. Don’t give in to the pressure to borrow money. If He doesn’t provide, that’s an answer as well. God may be telling you to lower your cost, or wait until you have more money. You can take off a semester or year to work and save to pay for the next year of school. Cedarville is a great school and will help you as much as possible. See these helpful links:
C.G., your lender expects you to repay what you borrowed. God does too. Honor the Lord, walk with integrity, and pay off your debt.
Dear Chuck, I retired about three years ago and have money in a retirement fund that guarantees a minimum of 3% with a maximum of 7%. I am considering taking some of it out and investing it in an annuity. Is that a good idea? – Robert in Montgomery, Texas Robert, 3% is not a bad return right now. I'm not against annuities but you need to be careful. M make sure the company offering the annuity is strong financially, or your investment could be in jeopardy. An annuity is a complex investment. Don’t do it unless you have a peace about it.
Dear Chuck, We have $50,000 left to pay on our mortgage over the next nine years, but we have extra money right now. Would you recommend that we make extra payments toward the principal or not? - Lori in Normal, Illinois Absolutely, Lori. Pre-pay your mortgage whenever possible. You'll find a handy, free calculator to help you here. Paying off your mortage will give you the best rate of return you can get right now. I've never met anyone who regretted paying off their mortgage. It's important to pay off as much debt as possible in 2010. *** I want to thank everyone who responded to the Transformation Challenge. Early returns are very encouraging and we appreciate your support. I look forward to being on the journey with you this year. With your help, we will serve the Lord and equip His people. |
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10 Ways to Save MoneyWe need to make saving money and debt freedom top priorities in lives. |
The Need for Emergency SavingsThe common biblical attitude is to save on a regular basis, and it is important that Christians develop good habits to replace bad habits. |
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Develop a Saving LifestyleGod can change our attitudes towards material things and help us to learn to be contented with what we have. |
Ideas for Funding an Emergency AccountOne of the best ways to break out of the debt cycle is to have an emergency savings fund to cover unexpected expenses. |
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Other Resources: |
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My family likes to make new year resolutions.
They write them down and hold each other accountable.
